Cash Flow Notes for Sale
Investing in cash flow notes for sale can provide investors with a relatively secure investment opportunity. There are numerous types of cash flow notes including business notes, real estate notes, land contracts, owner will carry financing, and structured settlements.
All types of real estate can be backed with cash flow notes for sale. In fact, realestate notes are the most common type of cash flow note investment. Property owners can sell their real estate holdings in whole or part, using the property as collateral with promissory notes.
Not so long ago, real estate cash flow notes were one of the more popular investment strategies. With today's housing crisis, real estate investments require a bit more scrutiny. Real estate investors must engage in due diligence in order to receive a decent return on investment.
Structured settlements are a relatively safe investment. These types of cash flow notes are used to compensate people who were injured due to negligence. This could be from medical malpractice, automobile injury, or a fall on someone's property. Structured settlements are also arranged for lottery winners who elect to receive annual payments instead of one lump sum payment.
Structured settlements are secured by life insurance annuities and can be sold in whole or part. When investors provide a lump sum of cash in exchange for annuity payments, the recipient assigns payment benefits to the investor for the number of payments sold. Structured settlement cash flow notes are generally a safe investment.
Business cash flow notes are oftentimes sold when companies cannot or choose not to obtain traditional financing. The three most common types of business notes include: factoring, purchase order funding, and owner will carry financing.
Factoring involves obtaining funds from a funding source by using account receivables owed to the business.
Purchase order funding is similar to funding; however, purchase orders are used as collateral instead of receivables. Investing in purchase order cash flow notes can be somewhat risky. Investors should use caution and verify the business has creditworthy customers who consistently place orders.
Owner will carry involves the owner carrying all or part of the financing on either real estate or business transactions. Also known as seller carry back, this type of financing is beneficial for individuals who cannot obtain loans from traditional sources.
Published on December 01, 2008 at 04:10 AM