What Are Cash Flow Notes And How Can They Make You Money?

A Viable Business For Investors And Note Borkers

If you have seen the late night infomercials about creating an extra income from the
cash flow notes business, you are probably asking yourself what are cash flow notes and how can they make me money. Then you’ve found the right article. In this article we are going to learn what cash flow notes are an how people create a sustained and continually income form both buying and selling notes. Not only can you make money buying and selling them, you can also create a business by bringing buyer and seller together and reaping the benefit of nice fees associated with the transactions taking place between the two parties.

First, let’s discover what cash flow notes are and what forms they take. Transactions take place everyday all over the world and take on differing characteristics. When you go to the market and purchase an item, in exchange for the item you’ve purchased you most likely give the sales clerk cash. Basically the listed price is paid in full and you walk with the item with no more obligation since you have the item and a receipt proving you paid for the item. This is the simplest form of a business transaction. However, there is another type of transaction we familiar with which falls under the umbrella of cash flow notes.

The most notable and popular type of cash flow notes is the mortgage note. Residential and commercial real estate changes hands from one party to another everyday. In most cases, these transactions are not concluded with the total cost of the property being transferred to the seller. Usually the buyer will negotiate a installment contract with the seller where the buyer will pay for the property over a set period of time. In most cases these installments will be paid over months and years until the installment agreement is paid in full at which point the buyer owns the property outright.

Most people who own a home understand the basic concept of a mortgage. Commercial and residential mortgage notes are bought and sold by note investors to make money. Investors buy mortgage notes and create and income stream called cash flow by adding these notes to their portfolio. Sellers make money selling the notes by selling the note to investors for a discounted lump sum. Although the seller takes a loss on the total amount of the note he would have collected had the seller held the note until the contract was paid in full. He now has a lump sum of cash to invest elsewhere such as other properties.

Structured settlements are another form of cash flow notes in which buyers, sellers and note brokers create a full time income as well as growing their portfolio. A structured settlement could be a lawsuit award paid out to someone that was injured. Or a annuity paid out over time and even lottery winnings can fall under a structured settlement. Note brokers and note investors spend their time locating these structured settlements in order to turn them into investments that generate cash flow for the investor and fees for the note broker that facilitates the transaction between buyer and seller.

As you can imagine, there are hundreds of thousands of notes out there since the installment note is the way we do business as a culture for items that need to be paid for over time. Making cash flow notes an excellent way to build a business providing you are willing to work hard and build a note network. You asked what are cash flow notes now you know. Learn how you can make money brokering notes.