Interest only payments vs. principal and interest payments

[Danren Jones]

 Hey BP family, I was wondering which was better. Interest only payments or  principal and interest payments For a private loan on a multi family property. Assuming that the interest rate was the same for both loans and the end game was refinance the property with a traditional mortgage. Feedback is greatly appreciated thanks!

[Andrew Beauchemin]

@Danren Jones IO in most cases is used to lower the mortgage payment during times of lower cash flow.  i.e. renovations, new construction, lease-up.  If your property is stabilized and cash flowing at full capacity, you should be paying down the principal.  Keep in mind that principal payments are essentially you paying yourself in the form of equity.