Cash flows are everywhere...from credit card bills to auto loans. A cash flow is an instrument setup between two parties to pay and collect a debt over a period of time. Cash flows have actually become the payment option of choice for many of us. Charge it now, and pay more later.
Today let's talk about cash flow notes that are secured by real estate. What's nice about cash flows secured by property is the value that those types of cash flows hold.
As said in previous articles, a note has to be written correctly to hold maximum value, but usually all real estate notes hold value in one way or another. If you are curious as to how to correctly write a real estate note for maximum value, please consult with a qualified note finder.
Using a qualified note finder will save you precious time and effort when you decide to sell or create a real estate note. A qualified finder already knows the criteria note buyers are looking for in the current market. One of the best options you have in the real estate note market is to start a good relationship with a qualified note finder.
Now, let's move on... Here are some of the most common cash flow note types and definitions:
Real Estate Note - This one is easy. It's simply a note or cash flow secured by real estate. The property acts as collateral if the payer were to become delinquent on the loan, or the payer forfeits on the loan. Once the payer becomes delinquent the payee also has the right to foreclose on the property.
Mortgage Note - A mortgage note is a promissory note that is attached to the mortgage on a property. It is a written promise to pay back a loan on a piece of real estate usually with interest within a given amount of time. While the mortgage holds the title of the property, the mortgage note is the signed agreement that holds the payer responsible for paying back the loan.
Trust Deed or Deed of Trust - There are certain states that do not record mortgages. Instead, a deed of trust is recorded, which is essentially the same thing. So, the trust deed is an instrument created by two parties, a trustor, and a beneficiary, which is secured by the property. The lender or beneficiary grants the trustor a means which to pay back the lent money through the deed of trust.
Land Contract - A land contract is another type of note that usually carries a shorter term than a traditional mortgage note, and sometimes has a balloon payment at the end of the term.
Promissory Note - A promissory note is written contract with the means to pay back a given amount to the owner of the note over a specified period of time. In the cash flow note business, buyers of note only buy promissory notes that are secured by real estate.
When dealing with real estate notes of any kind, it is important to know the details of the note completely. Whether you are creating a note, selling a note, or buying a note, make sure you know what you are getting into before you make any serious decisions. It is always helpful to contact an expert in the field, especially if you are new to the game. Contacting a qualified note finder can be a helpful resource when making an important decision concerning real estate notes. I suggest you find one that suits your needs.
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