Yield question

[lefecious]

So based off the recommendation of others on this forum I bought the Deals on Wheels ebook. Just started reading it and already I have a question. I'm very much a REI newbie so I apologize in advance if it's a stupid question.

Below is a deal from Lonnie's book. I don't quite understand how he arrived at that 75% yield figure. What is the equation? Also, what is the advantage to measuring in yields instead of say, cash on cash returns?

from Deals on Wheels:
MH bought for $4000
The buyers paid $1,000 down and signed a
note for $6,000 payable over 30 months, 9% interest with
monthly payments of $224.09. According to my calculator
that’s a 75 % yield! Can that be right--did I make a mistake?
Is it really possible to make that kind of yields?

[Jim Johnson]

So based off the recommendation of others on this forum I bought the Deals on Wheels ebook. Just started reading it and already I have a question. I'm very much a REI newbie so I apologize in advance if it's a stupid question.

Below is a deal from Lonnie's book. I don't quite understand how he arrived at that 75% yield figure. What is the equation? Also, what is the advantage to measuring in yields instead of say, cash on cash returns?

from Deals on Wheels:
MH bought for $4000
The buyers paid $1,000 down and signed a
note for $6,000 payable over 30 months, 9% interest with
monthly payments of $224.09. According to my calculator
that’s a 75 % yield! Can that be right--did I make a mistake?
Is it really possible to make that kind of yields?

ok... lets look at this...
Total of $4000 out of pocket-
The note is for $6,000 but the total return on the note is $6,722.70
And you get $1,000 down... So the total return is $7,722.70

Without interest the numbers are 7000 / 4000 = 1.75 or 175%
Actually... with interest it is 7722 / 4000 = 1.93 or 193%
So you almost double your money over 30 months

Your cash on cash question is good but only is only part of the equation. The numbers from the days when this book was written are somewhat outdated. A deal for me might look more like this...
I pay $4000 for a 3 bed 2 bath older single wide. It sells for $12,500 plus $500 down on payments of $305 per month for 63 months. My interest is 15% and I charge a $15 per month service fee for managing the loan.

I make my investment back in 11 months. ($500 down then $320/month)
The loan pays me back $19,001.50 (interest + principal)
The service fee is another $945.00
That is a 511% return...
Cash on cash the first year is $4,340 on $4,000 or 108%
Then it is just 96% every other year...
Remember there are tax issues with these sales so these yields are before tax!