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Cash Flow Notes: Tap Into The Financial Power Of Buying And Selling Notes


Cash Flow Notes: Tap Into The Financial Power Of Buying And Selling Notes

Cash flow notes document financial transactions between sellers and buyers. At present, more than 60 different cash flow notes exist; allowing investors multiple opportunities to tap into a financial pipeline. The most common notes include real estate and land contracts, business notes, structured settlements and annuity payments, and seller carry back financing.

Real estate cash flow notes are used to secure most types of property including raw land, residential homes, and commercial real estate. The property is used as collateral to secure the note. Real estate notes are attached to trust deed or mortgage contracts. If a borrower defaults on their loan the lien holder can repossess the real estate through foreclosure proceedings.

Business cash flow notes are secured by business assets. Several types of business notes exist, but the most common are factoring and purchase order funding.

With factoring cash flow notes business owners sell their accounts receivables to a funding source referred to as the ‘Factor.’ Factors lend money using receivables as collateral. Rarely will Factors purchase more than 80-percent of the total notes receivable.

Purchase order funding is much like factoring. The primary difference is purchase orders are used as collateral. Factors can loan up to 100-percent of the value of purchase orders. However, this type of cash flow note funding is typically reserved for well-established businesses with credit-worthy customers.

Structured settlement cash flow notes can be somewhat tricky to work with, but they present a secure investment product. Structured settlements are often used to compensate individuals who were injured due to negligence of a person, company or organization. Structured settlements are also used to payout jackpot lottery winnings to winners who prefer to receive funds over an extended period of time.

The problem with structured settlement cash flow notes is once annuity payments are established, they cannot be altered. Some states prohibit the sale of annuities, while others require Annuitants to obtain court authorization in order to sell all or a portion of payments.

When approval to sell annuities is granted, Annuitants assign payment rights to the buyer in exchange for lump sum cash payment. On average, selling structured settlement cash flow notes takes three to four months to complete.

Seller carry back cash flow notes are used in both business and real estate contracts. Seller carry back is a financing option where the seller carries all or part of the financing. On average, note holders require a minimum 10-percent down payment and carry back 10- to 20-percent of the purchase price. The buyer obtains conventional financing for the remaining balance.

In most cases, buyers have two mortgages – one to the mortgage provider and one to the seller. Seller carry back contracts generally last between one and five years. Seller carry back cash flow notes can be sold to investors in whole or part.

California investor, Simon Volkov, specializes in buying and selling cash flow notes. Simon is currently interested in real estate notes for properties located in Orange County, California, Washington state, Nevada and Arizona. Individuals with cash flow notes for sale are invited to submit information via the “Forms” section at

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