subject: What Are Cash Flow Notes? [print this page] Have you seen Russ Dalbey on TV talking about the cash flow business and wondered,
"Just what are cash flow notes?"
They are private debt and provide a way for the average Joe to buy or sell property without financing from banks. As banks tighten lending requirements more people are turning to seller-financing.
The seller agrees to "Be the Bank" by letting the buyer make payments over time. This IOU usually takes the form of a Promissory Note. You'll also hear them called:
Real estate notes
Seller Carry-back
Private mortgages
Owner Financing
Installment Sale
Real Estate Contract
All Inclusive Trust Deed
If a seller gets tired of receiving payments they can sell them to an investor for cash today. This selling and buying of mortgages is known as the paper business. An investor typically pays less than the amount owed resulting in the phrase discounted notes. A transaction usually involves the:
Seller - person receiving payments from sale of property
Payer - the property buyer making payments
Finder - the financial matchmaker between the Note Seller and the Note Buyer
Note Buyer - the investor that pays cash to receive future payments
Advisor - an attorney, CPA, title company, or real estate agent are just a few of the real estate professionals that might be involved in creating or selling contracts.
Note buyers and investors will pay a referral fee to note finders that bring them the deal. While it's a real business, it is not easy overnight riches. It takes strong marketing skills and persistence to find cash flow notes for a steady source of part-time or full-time income.
What Are Cash Flow Notes?
By: Tracy Z. Rewey
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