You can't deduct money set aside in a reserve to pay for future expenses - - - Regarding the mortgage, your monthly statement and escrow statements should itemize exactly how much is going to interest, principal, MIP, etc. so that you can classify those correctly - - - For the renovations made with an FHA 203k loan, those would be considered capital improvements and not repairs so they should be added to the cost basis of the property and depreciated over time.

The properties are now manged by a full-time property manager and I am paying down over $70,000 in principal each year.

.$85,000 down payment (20%).30 year fixed at 3.675% vs 15 year at 3.15%.Difference in cash flow / monthly payment would be $809/month on a 30 year, which I could put right back into the property to pay off the principal faster.

People sometimes bring in high network partners as key principals and their main contribution is just to qualify for the loan.

For example, if you were to get a 0% interest-for-the-first-year type of credit card, if you failed to pay off that balance in full at the end of that year they could come back and nab you for an extremely high interest rate (15-25%) on all of the initial principal you owed on the card and continue to charge you that high fee as time goes on.

He has an option to purchase by the Spring of 2022 for $59,000 minus the $3500 downpayment and the principal paid throughout the span payments.

Cap rate and return are unrelated (even if buying with cash).Return comes from cash flow, principal reduction, and appreciation (and tax benefits).Prices are inflated by artificially low interest rates.

Just a thought.....I dont sell my own properties because my e&o insurance will not cover transactions where you are a principal.

That payment goes toward the principal balance of the loan.

The principal of our property management company has a significant amount of leverage in the local banking community which resulted in six (6) very competitive bids.