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| Why would you want to sell your lottery
winnings? Selling your lottery winnings allows you to receive
your cash now instead of waiting each year to receive a portion of
your winnings. By selling your lottery winnings to receive a
lump sum of cash, you can take advantage of winnings now, instead of a
little at a time.
As you already know, money is your
pocket today is always worth more than money which is promised to
you many years in the future. Its the same principle that
allowed you go to a movie thirty years ago for $2 when you pay over
$10 for the same thing today. Today's dollars simply buy more than tomorrow's
dollars.
What can you do with the cash lump sum
that you receive from your lottery payments? Anything you
want! You can take your dream vacation, buy a new home, pay
off bills, send your kids to college, invest the cash in a higher
yield venture, open your own business. You decide; it's your
money to spend as you will.
Who is allowed to sell lottery winnings?
Essentially, when you "sell" your lottery winnings, you are actually
assigning the payments to a third party in exchange for a lump sum
of cash paid immediately. Many states allow for the
voluntary assignment of your lottery prize. And under certain
circumstances, lottery payments can be assigned in the states that
don't have such procedures.
Contact us for more specific information about your lottery
payments.
Do you have to sell all of your winnings?
No, you can sell a specified number of payments and keep the rest,
or you can sell a percentage of each payment for immediate cash and
still receive the remainder of each payment.
If you won the lottery as part of a
group, you are still allowed to sell your individual winnings.
First Class Cash Flow Handlers will always keep sales and other
communications with you totally confidential. Please call us
at (401)-258-7158 or
contact us for more information.
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| Owner financing is becoming increasingly popular as
an alternative to traditional bank lending solutions. Currently, it is
estimated that approximately 20%, or one in five, of all real estate
transactions in the US involve owner financing. Because the
requirements for an owner financed loan are somewhat less rigid than
those necessary for a bank loan, more buyers are able to qualify for an
owner financed loan. Closing costs are much lower and closing can take
place much more quickly because there is no need to wait for bank
approval. Usually, there is more flexibility in negotiating the terms
of the sale and home sellers are typically able to achieve full market
value for their homes.
Owner financing, also called seller financing or
creative financing, results in a privately held mortgage or trust deed
being created. This mortgage or trust deed provides the home seller
with a solid investment secured by real property. Typically, this
mortgage or trust deed provides a monthly payment at an attractive
interest rate. There may also be tax benefits as capital gains can be
extended over a longer period of time. In addition, the mortgage or
trust deed is a liquid asset which can be sold for cash, potentially
allowing the home seller to receive all cash at closing and still
allowing the home buyer to extend payment over a longer term.
Owner financing can successfully be used to sell
single family homes, multi-family homes, commercial properties, mobile
homes, land and businesses. Often, properties which do not qualify for
more traditional lending situations can be sold when owner financing is
offered.
First Class Cash Flow Handlers buys and sells
privately held mortgages, trust deeds, and other cash flow notes. If
you are selling a home, you need to know
How To Sell Your Home Fast In Good Or Bad Markets.
For more information, visit us at our home site or call us at 401-258-7158.
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| What is a structured settlement? A
structured settlement is usually an insurance settlement and most
often the result of a court judgment or out of court settlement. It may
be the result of an
accident, illness, or some other type of cause. Most often,
the settlement and the resulting periodic payments seem like a
windfall at first and help ease the financial burden many people collecting a
settlement experience. However, as time passes, you may find
that your monthly payment is no longer adequate to cover your
financial obligations. You may find that you have an
unexpected need for cash for medical treatments or other needs that
were not anticipated at the time your case was settled.
Selling all or part of your structured settlement may be the
solution to your cash flow problems.
Most structured settlements can be sold
for cash. Unfortunately, work related claims are the exception
and generally cannot be sold.
In reality, when you sell a structured
settlement, you are not selling the settlement itself. You are
actually selling the right to receive the payments on the
settlement. In practicality, you are exchanging your monthly
payments for a lump sum of cash paid immediately, with the note
buyer purchasing the right to receive the future payments. If
your settlement is paid in quarterly or yearly
payments, you can still sell that note for cash.
First Class Cash Flow Handlers will be
happy to consult with you about your structured settlement and your
individual cash flow needs. We will find a solution for you
that will help you meet your financial responsibilities. If you
have cash flow needs that you didn't realize you would encounter
when you accepted the settlement, there is no reason you should not
be able to use your settlement to meet those needs. After all,
the money is supposed to belong to you, not to the insurance company
who is holding your funds.
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| When most people consider selling a note, they generally think about
selling the entire note. And, in some cases, that may be the best
solution to a cash flow problem. One of the advantages of selling
the entire note is that once you've sold the note, you no longer have to
worry about collecting the payments. You have your money and
collecting on the note is now someone else's problem. If the note
defaults, you aren't affected by the default.
But what about the situations where you may need a smaller amount of
money immediately and enjoy having the monthly payments as extra
spending money. Did you know that you have the option of selling
only part of your cash flow and continuing to collect the monthly
payments on the portion you do not sell?
Partial purchases can be structured in many ways. You can sell
the next 12 payments and have the note return to you when those 12
payments have been paid. Or you can sell 24 payments, or 36...you
get the picture.
Another option is selling a portion of each payment and continuing to
collect the unsold portion. For instance, you could sell 1/2 of
each payment and still collect 1/2 of each payment. In this way,
you get a lump sum of money and still continue to collect a monthly
payment as well.
On the down side, partial purchases mean you are still involved with
the note and if it defaults, you are likely to be affected by the
default. Make sure what happens in the event of a late payment or
default is clearly spelled out in your agreement with the investor
before you finalize the sale of the note.
That being said, many times a partial purchase will actually allow
you to collect a much larger total sum of money for the note than a full
purchase will allow. You may actually end up collecting more than
the face value of the note in some instances.
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| Simultaneous closings offer a means of selling your home while still
receiving all or part of the purchase price for your home in cash.
Basically, a simultaneous closing entails creating a seller carry-back
mortgage or trust deed, with the home seller providing the financing for
the buyer. The home seller then sells the resulting mortgage or
trust deed to another investor, receiving cash in return for the
mortgage. In this way, the needs of both the buyer and the seller
can be easily met. This technique works especially well for
non-conforming properties for which bank financing is not available, or
for buyers who have an adequate down-payment and good credit but do not
qualify for traditional bank loans. In theory, the mortgage or trust
deed is created when the sale is closed and it is sold to the investor
"simultaneously". In reality, the sale is not simultaneous.
The closing on the home takes place first, and then the note sale is
completed. However, there may be very little time elapsed between
the two events, sometimes only minutes to hours.
If you are considering selling your home and completing a
simultaneous closing, it is essential that all the details surrounding
both the home sale and the note sale are worked out prior to the actual
closing. We recommend including an escape clause in the home sale
agreement to protect you in the event that the note sale does not close
for whatever reason. Though it is quite unusual for this happen,
if the worst should happen and you are unable to sell the note, you have
the option to back out of the home sale.
Before undertaking a simultaneous close, you should discuss the
situation with an experienced cash flow expert. First Class Cash
Flow Handlers is available to counsel you in creating a cash flow note
which will allow the highest possible resale value of your note, and we
will also purchase that note from you at the conclusion of your home
sale.
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| Quite frequently, when a business is
sold, it is necessary to provide owner financing in order to
complete the sale. Often times, the business owner would
prefer to receive cash for the transaction, but finds it necessary
to finance at least part of the deal in order to facilitate the sale
of the business. What many people do not realize is that the
resulting note can be sold for cash.
Business notes need to be structured
very carefully in order to be able to sell the note for a
respectable amount of cash. Before completing the sale of the
business, it is important to completely catalog and document the
fair market value of all of the assets of the business. These
assets may or may not include real estate. You should also be
prepared to provide verification of the income and expenses incurred
by the business, both before and after the sale.
The buyer should be prepared to provide
a sizable down-payment. Ideally, the buyer should also have
some experience operating and managing a business similar to the
business being sold. It is also important to make sure the
note is personally guaranteed by the buyer and that the buyer is
credit worthy. You may even want to consider cross-collaterizing
the note by having the buyer offer his/her home as additional
security for the note.
Simultaneous closings on business notes
are rare and you should plan on holding the note for a time in order
to season the note and allow the buyer to gain more equity in the
business. Seasoning the note allows the investor to see that
the payments are made on time every month. The longer the note
is seasoned, the more valuable the note will be. Similarly,
the higher the buyer's equity in the business, the more valuable the
note.
Many investors consider cash flow notes
secured by businesses to be much riskier than those secured by a
home or commercial property. However, by doing your homework
before you sell your business and properly valuating your business,
documenting the value of all assets being sold and choosing the
right buyer, you can create a note that is solid and can be sold for
cash.
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| Another way of asking this question is "What type of discount will I have to take if I sell my note?"
All notes are purchased at less than the remaining balance if the note is sold. The amount of the discount will depend on many factors.
Each note has a time factor involved, because the money is paid out over a long period of time. Because of the influence of inflation on the value of money, a dollar in hand today is worth more than a dollar promised 10 years from now. This "time value of money" affects the value of the note. The longer the payment term of the note, the more the note will be discounted.
The other group of factors that influence the value of a cash flow note are the risk factors inherent in the note itself. No one can accurately determine whether all of the payments on a given cash flow note will be made on time. However, there are a number of situations that make it more likely that a note will default or pay off on time. Individual risk factors will vary depending on the type of note involved. Real estate notes, for instance, are influenced by risk factors that are much different than those influencing a structured settlement. However, in general, the riskier the note is, the higher the possibility of default, and the lower the value of the note if it is sold.
Is there a standard discount on a note? Unfortunately, no. Each note is different and has to be evaluated on its individual merits and risk factors. You can compare the value of a cash flow note to the value of a car. In order to know what price you would pay for a car, you need to know what kind of car it is, what make and model, what year, how many miles, etc. Pricing a cash flow note is no different. It is important to know all the specific information about a note before its value can be accurately determined.
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| One of the most common questions we hear is "What exactly is a cash flow
note?" By definition, a cash flow note is a written
document that states a promise to pay. Included in this
document are the terms of the agreement, which includes:
- the amount of the loan
- the interest rate
- the amount and frequency of the payments
- when the borrower must repay the principle (i.e. the due date), and
- the penalties imposed if the borrower defaults on the loan or pays the loan back early.
A
cash flow note may be secured by real property, such as a
home. In this case, there is a security instrument,
called a mortgage or trust deed, which pledges the property for payment
of the debt should the borrower default on the note.
Notes may
also be secured by other types of properties, such as a mobile home, a
boat, an airplane, or even an automobile. Business notes
are usually secured by the assets owned by the business.
Cash
flow notes can also be in the form of lottery winnings, structured
settlements, inheritance notes (usually through an estate settlement or
trust), and annuities. Accounts receivables are another commonly encountered cash flow note. This is money which is owed to a company by customers who purchased products or services on credit.
These are a few of the most commonly encountered types of cash flow notes. There are many others which are less commonly encountered (for example, sports contracts and royalty payments). All of these cash flow notes can be sold for cash.
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