The Truth About the Cash Flow Business
“Just find a cash flow note and make a bazillion dollars!”
Sound familiar? Ok, maybe not the “bazillion dollars” part, but some people make it seem as if it’s as easy as walking down to your local supermarket and posting a “want ad” on the community board.
Although the cash flow business is far from rocket science, it is still just that…a business.
Like any business, there are proven systems and some things that just don’t work. There are shortcuts that help cash flow brokers make money sooner, but it is far from the “get rich quick” business some people would have you believe.
Interested in building a winning cash flow business? Here are a few tips to help you along the way.
1. Get Good Training From People IN the Business!
Too many people make money just teaching others – even though they don’t really do the business themselves. Find someone that actually purchases notes with their own money, heck, make sure you even get a referral (from someone else that is actually making money).
2. What else do I need to buy?
Here is the deal. Plenty of so-called cash flow “professionals” actually earn money selling you “private coaching,” “websites,” and “leads.” That is why they sell you (very little) information up front for $20-$50. They have something, way bigger, to sell you later.
3. Get Direct with Cash Flow Investors
There are dozens of legitimate note buyers out there. There are even more people that say they buy notes that in reality are just “flipping” those notes on to the real funding companies. Read the rest of this entry »
Make Money with Cash Flow Notes!
Whether a seller, investor, or note broker, there are many opportunities to make money with owner financed or seller carry back notes. There is a lucrative secondary market for seller financed notes also known as the paper business. Here are a few of the most common ways people make money in the note business.
Maximize Selling Profits
A seller often takes back financing for a buyer to appeal to a larger group of buyers and maximize the sale price. A property seller may also elect to take back a portion of the sale price for long term interest income. Why should the banks make all the money?
Did you realize that a bank earns back almost 2.5 times the loan amount on an average $100,000 loan at 7.5% that runs for a full term of 30 years? The payment would be $699.21 based on a 360 month amortization which means the buyer will pay back over $251,715.60 after 30 years on the $100,000 loan. All due to the power of interest! Read the rest of this entry »
What is Seller Financing?
When a seller allows a buyer to make payments over time for the purchase of property, it is known as owner financing or seller financing. This private financing by the seller can take the place of a bank loan or be in addition to a conventional mortgage.
The payment amount, interest rate, and other terms are agreed upon between the buyer and seller. The amount financed by the seller will depend upon the buyer’s down payment and whether there are any bank loans.
Here’s an example of how it works.An owner advertises his or her house for sale, either on their own or through an agent. A buyer makes an offer, and they agree upon a sales price of $175,000 with a 10 percent down payment of $17,500.
Rather than requiring the buyer to obtain a bank loan, the seller carries back the balance of $157,500 in the form of a note and mortgage. It could also be a note and deed of trust or a real estate contract, depending on the customary documents for that state. A title company or real estate attorney is often used for the closing. Read the rest of this entry »
Making Money in Factoring
Before we talk about how a consultant can make money, let just go over Factoring in general.
When a business needs cash but doesn’t want to borrow money they often turn to Accounts Receivable Funding, also known as Factoring. Rather than a bank loan, the business sells the right to receive payment on outstanding invoices to an investor or factoring company.
When the business delivers goods or services to a customer an invoice is created. The average customer or debtor may wait 20, 30, or even more days, before paying the invoice. Rather than wait for payment, the business can receive an immediate advance on the face amount of the invoice from the factoring company.
The factoring company issues the advance to the business and keeps back a portion in reserve. When the invoice is paid the reserve is released to the business, less the factoring fee. There is no interest or loan fee charged as the process involves the assignment of an invoice rather than the creation of debt.
Here is an example of how accounts receivable funding works: Read the rest of this entry »
Making Money with Life Settlements!
Looking for one of the hottest trends in the cash flow industry? Consultants are earning lucrative fees in the Life Settlement market by helping seniors receive cash today for life insurance policies.
Life insurance provides financial solutions to meet the needs of businesses and families. But over time those needs change.
Many would prefer to receive cash they can spend today rather than a future payout. Investors are willing to buy the policies and pay a referral fee to a cash flow consultant.
An astonishing 88% of all universal life policies never result in a death claim (according to Milliman and Robertson, a leading actuarial consulting firm).
In other words, the policies are surrendered or permitted to lapse. A surrender or lapse is, essentially, a sale of the policy back to the insurance company for the cash value. However, if the insured’s health has declined, the insured is no longer insurable in the same rate class; in that case, the policy may be worth considerably more than the surrender value. Read the rest of this entry »
Making Money with Real Estate Notes
Make Money in Real Estate without holding Real Estate! You bet!
Who wants to wait for the monthly note payments to trickle in over the next 5, 15, or 30 years? It makes sense that more sellers would be willing to carry back owner financing for the buyer if they knew how to sell all or part of their note for cash shortly after closing.
When a property is sold with owner financing and the newly created note assigned to a note investor at closing, it is often called a simultaneous closing. The property is sold, the note created, and then the note sold, all at the same time or simultaneously. A simultaneous closing is a relatively safe route for the seller as they can be certain of their note’s value with the cash proceeds from the note sale deposited by the investor at closing.
However, the majority of investors prefer a bit of seasoning. Seasoning allows for some time to pass between the creation of the note and the subsequent assignment or note purchase. Rather than purchasing a note simultaneously with its creation, they want the seller to temporarily finance the transaction.
The amount of time or seasoning required can vary from 72 hours to 60 days or more depending on the investor. The upside to the seller holding the note and collecting payments is that the number of potential investors and the note purchase price will generally increase. The downside is the seller has to wait for the cash and does not have a 100% guarantee of how much a note buyer will invest during this waiting period.
Here is where the Cash Flow Consultant comes in…
Cash Flow consultants typically put the whole deal together; pairing a note holder with a funder. At the end of the day, the seller gets to sell the note, the funder purchases the note, and the consultant makes a nice referral fee for setting the whole thing up!
To learn the most about buying or selling notes, check out Personal Profit Series: Notes – Your Complete Money Making System to Buying, Referring, Creating and Holding Real Estate Notes!
