Cash Flow Notes

What are cash flow notes, and how can they actually help you make money? These letters are actually contracts, and they exist to record a borrower’s promise (and obligation) to repay a lender a specific amount of money, or to give a certain amount of money to another person. Business letters, real estate notes, and structured settlement letters are all specific types of cash flow letters. Let’s take a look at each of these types, briefly.

Different types of cash flow notes

• Business notes

Business notes are cash notes that a particular business has secured using assets owned by bad business. There are several different types of business cash flow letters, such as factoring, purchase order funding, or seller carry back notes. These types of letters usually require that one uses assistance from professional setup, such as financial advisors.

• Real estate notes

Real estate notes are notes that have been secured by actual property, such as a mobile home, car, house, etc. When the collateral or security on real estate notes is actual property, a trust deed or mortgage is needed. If the borrower defaults on the loan, the lender can take that real property, sell it, and use the proceeds to help relieve the debt.

• Structured settlement notes

Structured settlement notes are given to individuals who have won a settlement from a corporation or individual in compensation for an injury caused by the negligence of the corporation or individual. With these types of letters, injured parties are generally given annuity payments by life insurance companies over a specific period of time, instead of in one lump sum. With these types of notes, individuals can sometimes sell part or all of their structured settlement to a private investor in exchange for a lump sum.

How cash flow notes can make YOU money

If you become a note investor, you can conceivably make money by buying and selling cash flow notes with your own money, or by brokering sales between buyers and sellers. This takes some expertise, so don’t just think you can jump in, become a cash flow investor or broker, and rake in the cash. However, learning the ropes and tapping into cash letters as a potentially lucrative way to make money is certainly possible. One of the ways you can make money with letters is by earning what are called “finders fees.” In other words, if the sale of a particular cash flow note is completed and you’re the one who arranged the sale, you get a finders fee.

Again, this is a relatively complex process, and you’ll want to make sure you know what you’re doing before you decide to try your hand at buying, selling, or brokering notes. Done right, though, handling these types of cash notes can be a tidy investment and source of income.

Brittney Herbert

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