Any buyer of an owner carry back note is in the “cash flow business.” He is buying the monthly payment due under the note. He is not buying the property. He is not buying brick and mortar. He is buying paper. The “debt” – the note – is secured by a Trust Deed, so that if the buyer stops performing and does not make the monthly payment, the note buyer can take back the property. This is the basics of our business.
So, what is an Odd Cash Flow?
Here are some examples:
1. Personal Injury Settlement
2. Medical Malpractice Settlement
3. Wrongful Death Lawsuit
4. Sexual Harassment Lawsuit
5. Wrongful Termination Lawsuit
6. State Lottery Winnings
7. Disability Income Payments
What do these situations have in common? A person has been wronged or won a lot of money. The “payor” of these monies is an insurance company, large corporation or a public entity. They are usually stable and have hundreds of millions or billions in assets. So, the recipient has a large degree of certainty that the money awarded will in fact be paid.
Sometimes these settlements involve large sums of money. Many times the final arrangement may involve periodic payments received over time rather than a lump sum. As time passes, the recipient may become unhappy with the pay schedule or may develop a pressing need for cash, for whatever reason.
What to do?
Sometimes, the company making the payments will allow their structured pay out schedule to be interrupted with a lump sum or series of lump sum payments. And, in the the note business, there are a few folks who have carved out a niche by specializing in this very thing – working with settlement payors, buying a stream of these payments, and providing the cash the recipient seeks.
I bring this up simply for you to become aware that such a thing exists. If you, a family member, or a friend ever have to deal with this type of event, you know that an option exists.
