Buyers, brokers and investors in commercial paper mortgages and other cash flows find them to be high-yielding investments. Notes, also called cash flows, income streams, debt instruments or paper, are thought by many to be limited to bank notes or discounted seller carryback mortgages. Today, however, the terms mean much more. Not only are smart money managers investing in and brokering receivables and discounted paper like private seller carryback mortgages, trust deeds and contracts for deed, but almost any other debt that is paid over time, not necessarily secured by real estate, can be a marketable cashflow. In other words, today the term cash-flows can mean any marketable I.O.U. that represents a promise to pay over time.
Notes provide cash flows.
They are usually secured by something of value that can be foreclosed on or otherwise claimed by the note owner if the payments are not made. They are normally sold at a discount from their balance. In the same way, a note is discounted because the money is paid over time. A financial calculator is used to determine the value of a note, based on the investor's desired yield. You can buy them for investment at yields above bank CDs and money market funds.