., $1500 rent + $100 late fees - $1500 payment = $100 of rent NOT PAID (therefore rent is still late and accruing daily late fees of $10 more).

For example, a duplex would accrue a $200 water bill. 

infinite banking, at least in the US, is predicated on being able to take loans against your cash value without it being recognized as income, with the entire balance (or remainder of it) accruing dividends. 

The bank will provide a pay off to the title company, including accrued interest, fees, advanced funds, etc.  

The principal   never changes, it only accrues  interest.

 @Ali Brooks:Is the money accruing interest while waiting for the redemption period to expire?

I may be reading this wrong, but it seems like you are relying on apprecition and equity accrued.

He gets 80% of his money at closing= $800kHe would make 5% on his $200k instead of parking in in the bank accruing nothing.

while interest accrues is a problem, and if you only take funds on an as needed basis from that investor, they don't like waiting!

I'm not sure you'd really want to be on title though, because if Investor Joe stops paying the mortgage, you'd be responsible for the debt accrued.