I mean take the scenario where you buying as  a principal.. but the seller just won't come to a price that makes sense to you and you just wasted a lead you paid big money to get... instead you have a relationship and you list and sell it..

Let's pretend there is no appreciation in value of the property or in rents, but at some point you've paid down the principal enough that you now have 50% equity.  

You are also paying down over $1,150 of principal every year per house, for a total of at least $38,000.

Something else to consider is if you have a 401k, you can take loans out at a lower interest rate than your school loans, the principal and interest go back into your account, and the money comes out of your check before taxes(if you have it set up that way). i don't know if it's better as far as tax returns go, but it is your money, if you find yourself in a crunch. sometimes it's a matter of moving money as opposed to saving or spending it. that's a tough decision. good luck!

With that we were cash flowing about $900 a month not taking into consideration principal reduction. 

On item #6 - if it's not your principal residence, you might need to factor 25-30% down.

I plan to return the bulk of investor principal via cash out refinance after a 3 year period, paid out in order of agreement based upon the specific deal structure.

Would that make you think that buying RE or building a home or making a new business would be a better way to save your principal?

To clarify, these are rental properties, not his principal residence.

Since your HELOC payments are amortizing (going towards principal) you could just take your time to pay it off.