Cash Notes for Sale
Cash notes for sale offer both buyers and sellers the opportunity to yield strong profits. At present more than sixty types of cash flow notes exist. The most common include seller carry back, land, business, structured settlements, and real estate.
Cash notes for sale are usually a safe investment practice because they are secured by tangible property. However, before buying any type of note, investors must engage in due diligence to ensure the deal is sound.
Seller carry back notes are one of the most popular cash notes investments. Seller carry back financing is used to fund real estate or business transactions. With the current economic recession many property owners and business owners are turning to owner financing in order to attract buyers.
Seller carry back is also referred to as "owner financing" and "owner will carry". When this type of financing is offered the owner carries all or part of the financing. Some will finance 20-percent of the sale price, while others finance 100-percent.
Seller carry back cash notes can be sold to private investors or investment groups. For example, John Doe owns a business valued at $2 million. He sells the business to Sam Smith and provides seller carry back financing for all or part of the note.
John Doe can sell the business note to an investor by assigning payment rights in whole or part. John probably won't receive 100-percent of the note value. However, he can obtain a lump sum of cash instead of waiting years for repayment.
Investors might offer John $1.5 million towards his $2 million business cash note. Investors now carry the financial risk and must collect payments. They must wait for repayment of the note unless they sell it. Over time, investors will earn a profit of $500,000, plus interest.
Business notes are a popular cash note investment. There are three primary business notes including: Factoring, Purchase Order Funding and Seller Carry Back Financing. Each uses business assets as collateral for funding.
Factoring involves using account receivables to secure the note. Receivables are sold to a funding source known as the Factor. Factors can be a bank, credit union, private investor or investment group. Purchase order funding uses the same principals as Factoring. The only difference is purchase orders are used as collateral.
Structured settlements are used to provide compensation to people that have been injured due to negligence or those who win lottery jackpots. Structured settlements are paid over a specific amount of time with annuity payments which are backed by life insurance companies. Annuitants (recipients of annuity payments) can sell all or part of structured settlements to investors.
Annuitants must obtain court authorization prior to selling annuity payments. Structured settlements are arranged to provide Annuitants with consistent cash flow to cover expenses related to their injuries. Therefore, a true need to sell structured settlements must be provided to the court. Judges generally do not approve the sale of annuities if they believe it will cause financial harm.
Real estate notes are secured by real property. Nearly any type of real estate can be used as collateral. Common types of properties include single family dwellings, multi-family properties, condominiums, manufactured and mobile homes.
Careful consideration should be given when investing in real estate notes. Experts suggest consulting with a real estate lawyer to ensure proper documents are executed to transfer property holdings.
Investing in cash notes for sale can be beneficial to both parties. However, it is crucial to work with trustworthy professionals and obtain appropriate legal documentation. Doing so helps to ensure profitable investment opportunities.
Simon Volkov is a private investor who specializes in cash flow notes for sale. Simon offers a variety of investment opportunities via his Investor's Club. Investors are encouraged to subscribe to his investment list to receive current listings. Simon also provides articles and resources on cash notes and the investing industry. Discover exceptional investments or learn more about investing by browsing our cash notes article library.