Cash Flow Notes for Sale: Three Investment Opportunities

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Cash flow notes for sale can provide multiple benefits to both buyers and sellers. With more than 60 variations of cash flow notes, investors have numerous opportunities to invest in real estate, land contracts, business notes, seller carry back financing, and structured settlements. Let's take a look at what each has to offer.

The most common cash flow notes for sale are real estate notes secured by tangible property. Nearly any type of real estate can be used to secure the notes. However, the most common real estate notes include single-family dwellings, condominiums and manufactured homes.

Property owners engage in the sale of real estate cash flow notes when they require a lump sum of cash and do not want to obtain traditional lending. While real estate cash flow notes have been popular in the past, today's housing crisis has made them considerably more risky. Investors able to wait out the housing slump could potentially earn a substantial return on investment. However, considerable scrutiny should be taken before purchasing this type of cash flow note.

The second most common cash flow notes for sale are structured settlements. Used to compensate individuals who have been injured due to negligence, structured settlements are backed by life insurance annuities. Additionally, structured settlements are used to compensate lottery jackpot winners.

In lieu of receiving one large payment, structured settlements provide recipients with annuity payments over an extended period of time. Purchasing structured settlement cash flow notes is generally a safe investment. Annuitants can assign all or part of their structured settlement payments to investors in exchange for cash.

Business notes are a popular cash flow note investment. While there are several types of business notes, the most common include Factoring, Seller Carry Back Financing and Purchase Order Funding.

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