Notes Cash Flow Income Streams - Unraveling The Mystery

Understanding Notes Cash Flow Income Streams

If you pause and take a few seconds and consider the amount of monetary transactions which take place daily it will boggle the mind. Transactions take place everyday in various forms. A transaction is more than likely taking place at this very second down the street at the local market or gas station. Your next door neighbor may even be involved in a transaction purchasing an item over the Internet. The point being: Some type of transaction is taking place every second of everyday all around the world where goods or services are transferred in exchange for money or something of value to an individual or society as a whole.

This has taken place since the beginning of man and the introduction of the barter system. However, transactions serve different purposes. At the corner market, a transactions takes place between a customer buying an item and the merchant. The merchant receives the item or product from a vendor at which time the merchant marks up the item to make a profit. The difference between what he paid the vendor or supplier and what he sells the product to the customer for is the merchant’s profit, less any additional cost incurred by the merchant. Other cost could include the stock boy he had to pay to place the item on the shelf, electricity, the lease on the building, etc. All these additional cost are factored into each an every item in the merchant’s store to balance out and provide the merchant with a profit at the end of the sales cycle.

But, there are other types of transactions other than the point of sale transaction described above and what this website is all about. This type of transaction is the installment plan. An installment plan is an agreement between two parties, buyer and seller, where the buyer agrees to pay the seller in increments or installments over a set period of time. This time period can vary widely in length on the fulfillment of the agreement, in most cases years. However, the payment schedule is usually based around the thirty day or monthly cycle. The buyer agrees to pay the seller an agreed upon amount set in a contract every 30 days until which time the agreement or contract is fulfilled. This monthly payment is called a note.

New installment plan transactions take place everyday between various parties. Homebuyers and financial institutions. Car dealers and car buyers. Furniture stores and furniture buyers. Vendors and businesses. Even gyms and people buying gym memberships. What many people are not aware of is there is an entire underlying industry that exist where investors buy these installment plans at a discount and in return pay the original seller a lump sum of cash. The investor, in most cases, owns a number of these in his portfolio creating what is called notes cash flow income streams.

When the notes investors buys his first note, he has created an income stream. Each month when the original buyer pays on the installment plan, it now goes directly to the investor rather than the original seller. Notes are bought and sold between original sellers and investors or between note investors all the time. You may be asking yourself, “ Why would the original seller be willing to sell the note to someone else for less than the original value of the transaction?”

The value of the transaction is tied up within the contract between the original seller and the buyer. In effect, the original seller’s money is in many cases tied up for years. It could be decades before the seller sees all of his money. Sometimes the seller does not want to wait years for his money for various reasons which are too numerous to attempt to name. If he decides he doesn’t want wait for his money, he can approach a note broker or a note investor and offer up the transaction for sale.

The reason he must sale the note at a discount is the note investor will be assuming all the risk involved with carrying the note as well as tying up his money for years. The benefit for both parties, the original seller and the note investor, is the seller frees up a discounted amount of cash he had tied up in the contract and the note investor added another notes cash flow income stream to his portfolio. Successful notes investors can and have created monthly income streams of thousands of dollars. Passive income that comes in every month while he pursues other cash flow notes or whatever he chooses to do with his time.

The cash flow notes business is a lucrative business for note investors and can be for note brokers as well. For those willing to apply hard work, discipline, dedication and willing to spend about eighty percent of their time marketing for notes, success is almost a given for creating notes cash flow income streams.

Find Cash Flow Notes With Networking

Cash For Notes

One of the most difficult task within the cash flow notes market for those new to the industry is locating notes which are on the market. A working knowledge of the note business is necessary in order to succeed. A transaction between two parties is what allows all of this to happen first and foremost, in order to bring these two parties together, we must first find a note and match a buyer to the note we have found.

Although the cash flow notes industry is synonymous with the real estate industry, and rightly so since mortgage notes are by far the most popular form of transaction, there are many other types of cash flow notes that can be located and sold. Once you begin your search, you will find cash flow notes mostly within the real estate industry in both commercial and residential property. On the commercial side of the business, many small business owners struggle with financing for various reasons ranging from meeting payroll, funding jobs or buying equipment. In an effort to meet the business needs many times they will use their property as a means to meet these obligations.

On the residential side, to find cash flow notes, networking with people within the mortgage industry is an exceptional way to increase your chances of finding mortgage notes for sale. Once you begin rubbing elbows an networking with mortgage professionals, they will very often being to introduce you in mortgage note buyers and cash flow note investors who are always trying to find cash flow notes. This will be your greatest asset as a note broker and a tool you will utilize daily as your cash flow note business grows.

Ultimately however, to find cash flow notes, you have to locate a note holder who is in need of cash and is ready to liquidate their note and turn it into readily available cash for whatever reason. The reason is not important but you can be very important you them if you can provide them with the service they require to meet their need. If you stop and think about the amount of transactions made daily all over the world in just the real estate industry, it will boggle the mind. Notes of all types: mortgage notes, lottery winnings, annuities, insurance settlements, judgments or any type of structured settlement are ripe for a transaction facilitated by you - the note broker. All you need to do is being networking and using you imagination. This is the key to how successful brokers find cash flow notes.

Bringing a note seller and note buyer, with acting as the note broker is a wonderful feeling. Not only have you helped two different parties meet their needs, you have also collected a nice fee to deposit in your bank account. Remember, networking and building a database of mortgage professionals and investors takes time, but if you are willing and committed, you will have a ready source to always find cash flow notes.

Cash flow notes, as an industry, has seen exceptional growth over the past half decade as more people with drive and a determination to succeed have discovered. What is so mind boggling about the note business is the fact that the business has been around since man completed the first transaction between two parties. In it’s simplest terms, a cash flow note is nothing more than contract between two parties with one party agreeing to sell something at a set price with the other party agreeing to pay in monthly installments over a set period of time until the obligation of the contract is met, or paid in full.

However, there is another factor involved with the transaction. Since the seller has agreed to allow the buyer fulfill the contract over time, the seller is also compensated in the form of interest on the contract since the seller must wait the set period of time to collect his money. An this is where finding cash flow notes can be so rewarding for those willing to learn the cash flow notes business.

Many times note holders find after a brief period of time of holding the note that they need their money now rather than later. Fortunately for them, there is an entire industry devoted to cash for notes which allows them the option of selling the note for a discount to an investor in return for a lump sum of cash. This allows the note holder the luxury of receiving a large percentage of the original contract amount while relieving him of the obligation of holding the note until contract fulfillment. The party paying the monthly installment is not inconvenienced in any way other than changing whom they pay their monthly note. The investor which buys the note increases his net worth as well as his monthly income.

And you as the note broker collects you commission because you learned how to find cash flow notes and bring buyer and seller together. Cash for notes has been around for millenniums with only a select few being in the know. This however has changed, so get out there and beat the bushes and find cash flow notes!