Is principle pay-down going to be tax deductible? 

If you choose not to accept Section 8 be consistent and across the board with it because even if it's not a protected class you still have a duty as a landlord to be ethical and consistent with the enforcing of your screening criteria. 

What the ethical wholesaler does is purchase the property.  

He is highly ethical.

The investor will not have any interest in the property, but will have a promised return of a specified percentage of the principle.

I got the $600 positive cashflow based on our monthly payment of $1600 (principle, interest and taxes) and being able to rent it out for $2200.

I can either get a 6 month extension (up to 2x) or I can convert it to a conventional 30yr principle and interest payment.The ARV I have is at a safe $108,000.  

He argued it'll be paid down quicker, but I argue that I can just make extra payments on the principle if I want that and I won't need to worry about a commercial loan eating my cash flow either because it's my option as to whether I want to pay extra or not.

Cash to go to school, paid for school (earned by you) and a wicked work ethic. 

These are professionals with additional training and a stricter code of ethics.