Cash Flow Notes 101
by Russ Dalbey
Published on this site: April 8th, 2006 - See
more articles from this month
A new trend dubbed "peer-to-peer" financing is
emerging in the financing arena and it's already more common
than most
people think. Instead of borrowing money from a bank or other
financial institution to purchase real estate or small businesses,
private individuals become the lenders.
Surprisingly, this "new" trend isn't so new at
all. People have been lending money to their peers for hundreds
of years. Today, these transactions are formalized through
Cash Flow Notes, a written document that states a promise
to pay and the terms of the agreement.
The Untapped Peer-to-Peer Lending Market: Cash
Flow Notes
Financing through a cash flow note is an attractive option
for many transactions, particularly real estate. Now a $350
billion industry, peer-to-peer seller financing is a growing
global phenomenon. Already, the sale of most small businesses
incorporate peer-to-peer lending and one in 13 American homes
is purchased using these cash flow notes.
Currently, there are approximately $91 billion in privately
held single-family residences and another $200 billion in
commercial real estate notes. In fact, there are so many cash
flow notes in the U.S. alone that if you could find and purchase
$1 million worth of notes every day, it would take more than
240 years to find them all.
Two Ways to Make Money
Most people get started in cash flow notes by simply matching
a seller - someone who is holding a note - with a buyer and
then collecting a fee for putting the deal together with no
capital outlay required.
Additionally, many investors are looking to buy these notes.
It is not uncommon to receive returns of 20 percent or more
as well as immediate monthly cash flow and because these notes
are secured by real estate, they are extremely safe investments.
As the CEO and founder of The Dalbey Wealth Institute,
Russ Dalbey has authored dozens of best-selling books
and articles on the cash flow business. A highly sought-after
public speaker on the topics of wealth, success, and personal
motivation, he is a self made, self-educated multi-millionaire.
The Dalbey Wealth Institute: http://www.notenetwork.com/
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