| Many people have monthly payments coming in from | | | | In order to compensate and offset the risk, the note |
| a structured settlement, annuity, lottery winnings or | | | | buyer will offer less than what the value of the |
| from property in which they hold the mortgage. | | | | remaining balance of the note is in order to make the |
| Often these people find that they are in need of the | | | | risk within tolerable limits should any of the above |
| total amount rather than monthly payments over | | | | factors occur. Although the note seller will not receive |
| time. Usually these note holders are people that need | | | | full value of the cash flow note, the seller will receive |
| the money for increased investing ventures or for | | | | a lump sum of cash freeing up cash that would |
| reasons of financial stress. Whatever the reason may | | | | otherwise take years to receive in full. Some note |
| be, they need someone to purchase the note from | | | | holders need to liquidate to increase their portfolio |
| them for a lump sum of cash in return. | | | | and purchase other notes with a higher interest rate |
| A cash flow note is nothing more than selling a | | | | making more money than they would on the |
| monthly note, such as a structured settlement or | | | | previously held note. |
| mortgage note, for a lump sum of cash in return. | | | | This is referred to as the time value of money and |
| These transactions take place everyday in the United | | | | which means that the present value of your money |
| States and is booming business for people who | | | | is more than the future value of your money. Selling |
| actively pursue cash flow notes as a source of | | | | a low interest note and taking a lump sum payment |
| income. | | | | and investing in a higher paying note earning the |
| Usually, the process of selling a cash flow note starts | | | | difference in your new investment. Selling a note to a |
| with the seller locating a note buyer. A note buyer is | | | | note buyer can have a faster turn around time as |
| someone that buys notes for investment purposes | | | | well, rather than applying for a loan from a bank or |
| and income streams. The note buyer has certain | | | | lending institution. Cash flow note transactions can |
| criteria and standards the note must meet before | | | | take up to two weeks, maybe less, whereas a loan |
| the note buyer will purchase the note. The note | | | | could take a month or longer for approval. |
| buyers evaluation process typically consist of | | | | Cash flow note sales are a viable way for a note |
| different factors including the type of property, | | | | holder to free up cash for liquidation purposes, taking |
| interest rate, the balance remaining on the note and | | | | the money and investing it elsewhere for a better |
| the credit of the payor. The note buyer does these | | | | return. Or in some cases, a note holder may need |
| checks to estimate if the note is worth the risk he | | | | cash for emergency reasons or for health related |
| will assume if he purchases the note. The note buyer | | | | reasons and selling a note is a quick way to acquire |
| must consider many variables before agreeing to the | | | | much needed cash. Although selling note is quick, a |
| purchase the note including bankruptcy by the payor, | | | | note seller should always do their due diligence on a |
| declining interest rates or the payor defaulting on the | | | | potential note buyer before ever agreeing to sell the |
| note. | | | | note. |