The Cash Flow Clarion

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.

Business Notes

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.


The Cash Flow Clarion
February 12, 2006
Simultaneous Closings 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. Business Notes 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.	In This Issue: Simultaneous Closings Business Notes Important Links: The Cash Flow Clarion Home First Class Cash Flow Handlers- Home page for First Class Cash Flow Handlers Note Submission Page- Submit your cash flow note on this page if you would like to sell your note FAQ's Page- Questions relating to First Class Cash Flow products and services Note Holders Page- Information and answers to questions frequently asked by note holders Realtors Page- Information for realtors explaining how owner financing can increase sales and commissions Real Estate Professionals Page- Dedicated to attorneys, CPA's, financial consultants, mortgage brokers, and any other professional whose clientele hold cash flow notes Products Offered- Information about specialized products such as "How To Sell Your Home Fast In Good Or Bad Markets" training course, the "Note Holders Manual", the "Cash For Paper" audio course, and the "Update On Real Estate Newsletter" In Next Issue: Full Purchase Vs Partial Purchase Structured Settlements Contact Information: First Class Cash Flow Handlers www.firstclasscashflow.com loriehuston@firstclasscashflow.com (401)-258-7158