The fundamental difference between investing vs speculating is not about risk of losing principal.  

. :)  is HML  and I am thinking wow .. this is going to some heartache and sure enough some of the folks that posted have done like 10 loans and 7 are in default.. the foreclosure time in NJ and NY two states I personally would never be a lender in is 2 to 3 years.. and by the time you get the asset back its ouch time.. and that has played out for some folks and there is a high profile one in Atlanta that has been going on for years.. suppose to sell at 6.5 million and its listed under 3 now.. although I think they may get their principal back or most of it but its been 2 or 3 years.. and you know how investors get stressed.. and then the other issue I saw coming with crowd funding .. and remember my background is I have owned 2  Hml companies over the years one of them in Oakland CA with 250 clients and about 50 million under management.. these guys went about raising money from 5 to 10k investors and would literally have 20 or 30 investors in one loan..

Yes, on a $1 million property, he'd purchase by putting down $100K (10%), leaving a balance of $900K (called the principal).

You're strategy of highly accelerating principal pay down suggests this.

Will be well over a million even though the principal amount is less than a million.

When you take participant loan from your 401k all you pay is set interest rate with principals back to your 401k, there is no UBIT here. 

I get the principal paydownc.

Since this would be your principal residence I would look at the housing situation and determine the following:1.

But I would borrow 100K at 5% that I knew I could rent for enough that not only would it be paying the principal down on the mortgage a couple hundred bucks every month, but also cash flowing (after all expenses and vacancy, etc.) a couple hundred bucks every month.

If funds are tight you may also want to look into a 203(k) loan that will act similar to an FHA but will also loan out construction funds and then roll them into the long-term amortized principal loan.