Potential Debt Leveraging Idea

[Kayla Holbert]

I got this idea in my head, but I want to know if this is not only possible, but legal. So I was thinking of increasing my cash flow by allowing family/close associates to pay a portion of my mortgage, and in return give them 5%-10% more than that portion at the end of the year. Here's a very simple and exaggerated example:

I get 1000 in rent/month, but the mortgage on the house is 500/month. Instead of me paying the whole 500, I will allow someone to pay 20% of that, so 100, every month and give them 10% back at the end of the year.In total, they would have paid 1200 and I would have only paid 400 in mortgage every month, which means 4800 total instead of 6000. I would then give that person 10% more than what they paid, so 1320, which means I have to subtract it from my yearly cash flow of 7200, giving me only 5880. At first glance, this seems like I am losing money considering I could pay my full mortgage alone and pocket 6000 for the year rather that lose 120 dollars. But could this be considered a way to leverage debt? Technically, wouldn't I only be paying 120 dollars a year for a 1200 'loan'?. This may be a dumb question, but I had to ask anyway.

[Brant Richardson]

I am not sure how a small amount of cash flow is going to help you when you have to pay it all back with interest at the end of the year.  With your plan you will pay 5-10% per month on the last $100 payment of the year.