figuring yield (help) - Posted by mark in OKC

Posted by mark In Okc on April 25, 2000 at 21:16:05:

Hi Lonnie,

Thanks for your help and your books. I have both.

We both put up $3000. I’m paying him 18% for 36 months 108.46/mo. I structured the note to the buyer for 48 months @ 13% 230.58/mo. I kept the $500 down payment. My total investment is $2500.

I hope this makes it more clear. By the way this is my 1st. one. Please show me the math.

Thanks again.

Mark in OKC

figuring yield (help) - Posted by mark in OKC

Posted by mark in OKC on April 25, 2000 at 17:49:14:

I just structured a Lonnie Deal with a partner and am trying to figure my yield. Heres the numbers,can someone please show me the math.

My investment is $3000. Partners is $3000. Repaying partner 18% for 36 months. $108.46/month. Sold for $8995 $500 down (mine) 13% 48 months. $230.58/month
Total return is $11,088. Partners return is $3924. My net is $7164. I use a HP calculator and know how to figure these when the pay back periods are the same. I’m a little confused due to the different pay back periods.

Thanks to all for any help.

Re: figuring yield (help) - Posted by Lonnie

Posted by Lonnie on April 26, 2000 at 07:49:00:

Hi Mark,

Your figures are a little different than what I get. If you took a note for $8495, 13%, 48 months, the payment will be $227.90, $2.68 less than you quote.

The payment to your partner is correct?$108.46. That leaves you getting $119.44 for the first 36 months, and then $227.90 for the last 12 months., for a total of $7,034. Without going into the key strokes, your yield is 54.97% if the note runs the entire term.

You’ve made a good start. Congratulations.

Hope this helps,


Check my math… - Posted by Andrea

Posted by Andrea on April 26, 2000 at 04:38:52:

Hi Mark,

It looks to me like you need to reduce their payment:

N 48 I 13% PMT $227.89 PV $8495.00

Your investor’s portion looks like this:

N 36 I 18% PMT $108.46 PV $3000.00

Your part would be (and here’s where I’m not sure there isn’t a better way):

36119.43 ($227.89-$108.46) is $4299.48
227.89 (remaining 12 pmts) is $2734.68

$4299.48 + $2734.68 = $7034.16 (total pmts to you)

Now we get to the part you were asking about… here’s how I did it and maybe I goofed:

You could divide the total by 48 (getting an average pmt)

$7034.16/48 = $146.55

Making your yield problem look like this:

N 48 I 64.68% PMT $146.55 PV $2500

Like I said, double check my math… and if anyone does this in a different way I sure would like to be shown too.

Hope this helps,

Re: figuring yield (help) - Posted by Lonnie

Posted by Lonnie on April 25, 2000 at 18:55:45:


Not sure I understand your deal. Did you each put up $3000, or was there a total of $3000 in the deal, put up by your partner. Was the sales price $8995, with you getting the $500,and your partner getting $108.46 for 36 months?