Receiving Payments - Need Cash Up Front?
Cash Liquidity
FREE EVALUATION, NO OBLIGATION
American Funding would like to acquaint you with our unique service to Owner Financed Mortgage Note Holders & Settlement Receivers. American Funding and our Associates are in the Business of Buying existing Real Estate Contracts, Mortgage Notes and Deeds of Trust, in all States. We convert long term income into cash now. You get the cash in hand today that you wanted when you sold your property. We also work with Structured Settlements that dribble payments in monthly or have future payments pending; we can convert those payments into a lump sum today.
Ultimately, you are searching for a Safe Harbor with Security for your money or investments. Your immediate situation may not be fulfilling this for you. What service we would actually be doing for you, is giving you cash up front for the purchase of payments that may never materialize…
Discount Mortgage Fundamentals
Many people are not aware of the fact that a substantial number of Real Estate transactions are completed through seller carry backs. This is where the seller, rather than a bank or other institutional lender, provides the financing for the purchase. They do this through the carrying back of a Promissory Note, which is secured by the property. Often times the seller will take a first lien, or priority position with respect to the property, although in some cases the seller has been forced to take a second lien position in order to help complete the transaction. Many of the purchasers who require seller financing are well qualified but have been unable to obtain institutional financing for a variety of reasons. This is particularly true in today’s economy where financial institutions have become increasingly stringent in providing financing to individuals.
The majority of these transactions are secured by residential properties; however, seller carry back financing is becoming more and more prevalent with multi-family and commercial properties. This is because institutional lenders have virtually stopped providing purchase money financing for such properties, even when they are well secured and the purchasers are highly qualified.
Over the past years a secondary market has evolved for institutional investors who provide purchase money financing. Historically, these institutions were interested in holding the loan for the entire term, but as interest rates climbed in the late 70’s and early 80’s, these lenders suffered serious declines in the value of their loan portfolios because the yield on their loan was well below market. Accordingly, the financial industry has developed a secondary market for institutional lenders to resell their loans shortly after they are originated. This allowed them to avoid the financial risk of holding them on the long term basis, and it provided them with renewed funding for further lending.
Even with the evolution of a secondary market for the resale of purchase money loans made by institutional lenders, no organized secondary market has developed for seller carry back financing. In most cases, individuals holding paper would prefer to receive cash for their note, but they do not know how to accomplish this. Even those individuals who wanted to carry back the paper on a long term basis will have events that occur in their lives which might make it necessary, or desirable for them to sell their notes…
Simultaneous Closings
The phrase "Simultaneous Closing" is used to describe transactions that occur when the seller is carrying back a note, as payment for their property, with the specific intention of selling the note for cash. In other words, "Simultaneous Closing" just means, during an escrow closing, that there are two (2) separate closing transactions happening at the same time.
Documents are signed and:
Time Value of Money
This concept involves both the "cost" of money and "when" money flows in, or is paid out. Time value of money says that a dollar today does not have the same value as a dollar ten years from now.
Here are a couple good examples of the time value of money:
Future Value
The future value is the worth, at a specific point in the future, of an amount that is to be received or paid today. Through the process of compounding, a current investment will "grow" or increase in value over time. Consider this example.
A new $10,000 trust deed at 10% (per annum) interest with a one-year maturity will pay $11,000 at the end of one year. Thus, $11,000 is the future value of your $10,000 investment today…
Present Value
Present value is just the opposite of future value. It is the worth today, of an amount to be received (or paid) in the future. In the same example as above, the $10,000 beginning amount is the present value of the future $11,000 assuming that the investment is to earn 10% per annum.
Compounding
Assume that you deposit $1,000 in a savings account that earns 6 percent (use your imagination) each year. At the end of one year your investment would be worth $1,060. This is because you receive your original $1,000 plus an interest return of 6 percent, which is $60.
Therefore, the future value at the end of one year would be $1,060, but what if you decided to leave your investment in the savings account for two (2) years. What would be the future value of your investment? This involves compounding since you will be earning interest on your interest, as well as earning interest on your principal. So the second year you will earn an interest return of 6 percent on $1,060. Thus, the future value of your investment at the end of two (2) years is $1,123.60. You can see that the second year you earned $63.60 in interest as opposed to $60.00 for the first year.
To further demonstrate the significance of this theory, let’s assume you leave your investment in a savings account for five years. The future value of your $1,000 in five years will be $1,338. This is opposed to $1,300 which is what you would get if you just added $60.00 a year in interest. The interest compounds over time to make up the future value.
Discounting
The concept of discount rate and interest rate are very similar. Where the discount rate affects a future value to determine a present value, the interest rate affects a present value to determine a future value. Discounting is the opposite of annual compounding. Assume that you need $1,060 at the end of one year from now. If you can earn 6 percent interest (compounded annually) on your investment, how much would you have to invest now? In order to find this we must discount (bring back) the future value. In this example the present value of our investment would be $1,000.
For: PROFESSIONALS
Do you have Clients who are having Cash Flow Money problems? It just might be that some of your Clients are receiving payments from a Mortgage Note or some sort of Settlement. American Funding can convert their long term payments into cash; and you can get paid for your services too. We can help. Just contact us, and we can provide the prospective client with the needed cash. Many individuals do not know that they can sell their promissory note. You can now help them with their cash flow problem and earn a referral fee at the same time. An Agent can make more sales and earn more commission. When a second piece of property is involved, an Agent has a potential for second commission too… A Win / Win Relationship…
Cash Liquidity
FREE EVALUATION, NO OBLIGATION
American Funding would like to acquaint you with our unique service to Owner Financed Mortgage Note Holders & Settlement Receivers. American Funding and our Associates are in the Business of Buying existing Real Estate Contracts, Mortgage Notes and Deeds of Trust, in all States. We convert long term income into cash now. You get the cash in hand today that you wanted when you sold your property. We also work with Structured Settlements that dribble payments in monthly or have future payments pending; we can convert those payments into a lump sum today.
Ultimately, you are searching for a Safe Harbor with Security for your money or investments. Your immediate situation may not be fulfilling this for you. What service we would actually be doing for you, is giving you cash up front for the purchase of payments that may never materialize…
Discount Mortgage Fundamentals
Many people are not aware of the fact that a substantial number of Real Estate transactions are completed through seller carry backs. This is where the seller, rather than a bank or other institutional lender, provides the financing for the purchase. They do this through the carrying back of a Promissory Note, which is secured by the property. Often times the seller will take a first lien, or priority position with respect to the property, although in some cases the seller has been forced to take a second lien position in order to help complete the transaction. Many of the purchasers who require seller financing are well qualified but have been unable to obtain institutional financing for a variety of reasons. This is particularly true in today’s economy where financial institutions have become increasingly stringent in providing financing to individuals.
The majority of these transactions are secured by residential properties; however, seller carry back financing is becoming more and more prevalent with multi-family and commercial properties. This is because institutional lenders have virtually stopped providing purchase money financing for such properties, even when they are well secured and the purchasers are highly qualified.
Over the past years a secondary market has evolved for institutional investors who provide purchase money financing. Historically, these institutions were interested in holding the loan for the entire term, but as interest rates climbed in the late 70’s and early 80’s, these lenders suffered serious declines in the value of their loan portfolios because the yield on their loan was well below market. Accordingly, the financial industry has developed a secondary market for institutional lenders to resell their loans shortly after they are originated. This allowed them to avoid the financial risk of holding them on the long term basis, and it provided them with renewed funding for further lending.
Even with the evolution of a secondary market for the resale of purchase money loans made by institutional lenders, no organized secondary market has developed for seller carry back financing. In most cases, individuals holding paper would prefer to receive cash for their note, but they do not know how to accomplish this. Even those individuals who wanted to carry back the paper on a long term basis will have events that occur in their lives which might make it necessary, or desirable for them to sell their notes…
Simultaneous Closings
The phrase "Simultaneous Closing" is used to describe transactions that occur when the seller is carrying back a note, as payment for their property, with the specific intention of selling the note for cash. In other words, "Simultaneous Closing" just means, during an escrow closing, that there are two (2) separate closing transactions happening at the same time.
Documents are signed and:
- Buyer gets Title of Property & Seller Receives the Mortgage Payments
- A Investor buy’s the Mortgage Payments from Seller for Cash - Assignment
Time Value of Money
This concept involves both the "cost" of money and "when" money flows in, or is paid out. Time value of money says that a dollar today does not have the same value as a dollar ten years from now.
Here are a couple good examples of the time value of money:
- Thirty years ago, a Coca-Cola would have cost you a nickel. Today, you will probably have to pay closer to a couple of dollars for that same Coke.
- Twenty years ago, you could have gone to
see a movie for roughly one dollar. Today, you will pay around fifteen to twenty
dollars for that same movie.
Future Value
The future value is the worth, at a specific point in the future, of an amount that is to be received or paid today. Through the process of compounding, a current investment will "grow" or increase in value over time. Consider this example.
A new $10,000 trust deed at 10% (per annum) interest with a one-year maturity will pay $11,000 at the end of one year. Thus, $11,000 is the future value of your $10,000 investment today…
Present Value
Present value is just the opposite of future value. It is the worth today, of an amount to be received (or paid) in the future. In the same example as above, the $10,000 beginning amount is the present value of the future $11,000 assuming that the investment is to earn 10% per annum.
Compounding
Assume that you deposit $1,000 in a savings account that earns 6 percent (use your imagination) each year. At the end of one year your investment would be worth $1,060. This is because you receive your original $1,000 plus an interest return of 6 percent, which is $60.
Therefore, the future value at the end of one year would be $1,060, but what if you decided to leave your investment in the savings account for two (2) years. What would be the future value of your investment? This involves compounding since you will be earning interest on your interest, as well as earning interest on your principal. So the second year you will earn an interest return of 6 percent on $1,060. Thus, the future value of your investment at the end of two (2) years is $1,123.60. You can see that the second year you earned $63.60 in interest as opposed to $60.00 for the first year.
To further demonstrate the significance of this theory, let’s assume you leave your investment in a savings account for five years. The future value of your $1,000 in five years will be $1,338. This is opposed to $1,300 which is what you would get if you just added $60.00 a year in interest. The interest compounds over time to make up the future value.
Discounting
The concept of discount rate and interest rate are very similar. Where the discount rate affects a future value to determine a present value, the interest rate affects a present value to determine a future value. Discounting is the opposite of annual compounding. Assume that you need $1,060 at the end of one year from now. If you can earn 6 percent interest (compounded annually) on your investment, how much would you have to invest now? In order to find this we must discount (bring back) the future value. In this example the present value of our investment would be $1,000.
For: PROFESSIONALS
- Attorneys & Lawyers
- Certified Public Accountants
- Contractors & Developers
- Financial Planners & Services
- Loan Officers
- Mortgage Brokers
- Real Estate Agents
- Tax Prepares
- Any Related Professional
Do you have Clients who are having Cash Flow Money problems? It just might be that some of your Clients are receiving payments from a Mortgage Note or some sort of Settlement. American Funding can convert their long term payments into cash; and you can get paid for your services too. We can help. Just contact us, and we can provide the prospective client with the needed cash. Many individuals do not know that they can sell their promissory note. You can now help them with their cash flow problem and earn a referral fee at the same time. An Agent can make more sales and earn more commission. When a second piece of property is involved, an Agent has a potential for second commission too… A Win / Win Relationship…