ROI vs Yield is one of the most misunderstood concepts in mortgage note investing. Many investors focus on ROI alone, but yield is what truly drives consistent cash flow and predictable income when investing in real estate notes.
Imagine you buy 10 monthly payments of $1,000 each—so you’ve invested 💸 $10,000.
In return, you receive 12 monthly payments of $1,000.
That’s $12,000 back in your pocket 💰. Boom. A $2,000 profit.
ROI = Profit ÷ Investment
ROI = $2,000 ÷ $10,000 = 20%
Sounds good, right? But hold your mortgage notes, friend—there’s more to this story… 🕵️♂️
You’re not waiting 12 months to get your investment back.
You’re getting $1,000 every month.
By month 10, you’ve got your entire $10K back 💥
Months 11 and 12? That’s gravy baby 🥳
But ROI acts like your money was locked in for the full 12 months. And that’s just not true. ❌
Understanding ROI vs Yield /how-does-mortgage-note-investing-work/ helps note investors evaluate risk, returns, and long-term income more effectively.
Let’s run the numbers like a true note ninja 🧠:
Wait, what?! That’s a huge difference from the 20% ROI you thought was decent.
✅ ROI is blind to time and ignores compounding.
✅ Yield gives you the real scoop in the note world.
✅ Forget your landlord math—this is a whole new ballgame 🧾/be-the-bank/
Understanding ROI vs Yield helps note investors evaluate risk, returns, and long-term income more effectively.
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