Cash Flow Note Buyer Business Plan and SWOT Analysis

Cash Flow Note Buyer Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Cash Flow Note Buyer Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Cash Flow Note Buyer business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Cash flow note buyers can be highly lucrative businesses given that they are purchasing debts that are usually seasoned. Additionally, many cash flow notes are often backed by either real estate or other tangible assets that can be held as collateral in the event that the borrower does not make timely payments on their debentures.  As such, cash flow note buyers serve an important purpose within the capital markets. Foremost, they are able to purchase these debts from third-party companies that are not engaged in the business of providing loans or owning cash flow notes. Usually, many cash flow note buyers will target individual homeowners or property owners that have provided a loan to an individual to purchase a specific type of property. As such, these notes are usually purchased at a discount from the total face value of the loan. Of course, the value of these notes can vary wildly based on the amount owed, collateral, and credit worthiness of the borrower. Cash flow note buyers are able to generate significant sums of money by purchasing notes outright or by using a line of credit in order to acquire these income producing assets. Of course, there are some significant issues with the ongoing purchase and sale of cash flow notes. As such, it is important that any entrepreneur getting into this business have a proper procedures and protocols manual in place as it relates to what types of credit worthiness and collateral requirements will be needed before the purchase of any cash flow producing note is made.

Depending on the state and location, most lenders are willing to extend a line of credit that would be used to purchase cash flow notes. This type of lending instrument is often referred to as a warehouse line of credit. In some locations, the cash flow note buyer must be licensed as a mortgage bank in order to acquire already existing mortgages from a third-party. However, these laws vary from state to state and it’s important that a entrepreneur have a qualified attorney on retainer to ensure that the business is operating within the letter of the law at all times. Many seasoned investors are also willing to put up the necessary capital in order to provide an entrepreneur with the money they need to purchase the initial portfolio of income producing notes. Of course, a cash flow note buyer business plan is going to be required. This document should include a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. Within the business plan, special attention to should be paid to the interest rate spreads are going to affect how a portfolio is purchased. Although this business does not have customers – it is important to note demographics of the types of borrowers that will be accepted when a cash flow no is being purchased. Additionally, a thorough analysis of the economy should be included as well. While interest rate still remain low, and a spike in interest rates can have a substantial deleterious effect on the value of a cash flow note portfolio. However, a highly experienced cash flow note buyer can into enter into agreements known as swaps that can hedge against any rising interest rates. Declining interest rates typically have an opposite effect where as a cash flow note will actually increase in value. One of the things also should be noted within the business plan is how seasoned notes will be sold to third-party institutional investors. While many cash flow no buyers hold these debentures for income producing purposes – many buyers will also engage in selling notes once they have become seasoned and have produced enough profits.

A cash flow note buyer marketing plan should be developed as well. However, this marketing plan can be highly limited in its scope and its nature given that this business is going to target individuals and small businesses that are currently holding mortgages, car loans, or other related debts for their clients. As such, it is important that a cash flow note buyer maintain very strong relationships with real estate agents, real estate brokerages, and mortgage brokerages that have extensive ties to the real estate funding community. A presence on the Internet can be provided and it can be limited to people that are looking to sell or buy cash flow notes. A presence on social media is usually not required at all.

A cash flow note buyer SWOT analysis should be developed as well. As it relates the strengths, cash flow new buyers are generally able to remain profitable and most economic climates given that these debts are tied directly to real estate or other tangible assets. Additionally, the fees generated from holding these notes are highly recurring given their contractual nature. For weaknesses, this is a capital intense business and a significant amount of cash needs to be on hand at any given time. Typically, the startup costs for these types of businesses ranges anywhere from $250,000 to $1 million depending on the size of the initial portfolio to be started. Additionally, there are a number of laws that need to be adhered to on an ongoing basis especially as it relates to holding a mortgage note. For opportunities, many cash flow note buying businesses will source additional capital from private investors in order to increase the size of the portfolio. In fact, this is the only way that these businesses tend to grow. As it relates to threats, the real threat to any of these businesses is a volatility in interest rates. Rising and falling interest rates can have a significant impact on how the cash flow note portfolio is valued. As such, someone who is going to get into this business need to have a significant understanding of the overall economy and how interest rates operate.