Your ROI likely depends a lot on how much appreciation you expect to get.Equity pay down is the principal portion of your monthly mortgage payment. 

At the end of the day, you are investing to make a profit, and you will be taxed on that profit regardless of whether or not the profit comes as normal interest or return of discounted portion of principal balance.  

I am tempted to put that extra $200 back in directly toward the principal for the time being(I don't really want to extend my loan and slow how quickly I am paying it off).

I assume that this would then be taxable with the interest portion as ordinary income and the principal payments would be taxed on 25% of that payment (the same as the ratio at sale time of property #1)? 

And since refinancing involves a return of principal, that along isn't technically a taxable event, although when you finally surrender the property, it would be at that point. 

Chris is the principal.

You might want to check those numbers to make sure that's what you're looking forJust a back of the napkin calc shows that your month net operating income might be almost zero  Asking price $135000 Monthly payment  ~$1600 Monthly income  $1800 Water  $80 Repairs  $100   Total expenses  $1780 Total monthly NOI  $20   Keep in mind that $100 for repairs a month is probably a low estimate and the monthly payment of $1600 includes taxes, insurance, principal and interest.

Robert Principal, interest, taxes, insurance.

There are three more: loan principal paydown, tax benefit (depreciation & 1031), appreciation (rents increase over time and so does NOI which in turn pushes property value).

Hey guys, so im currently reading Set For Life and am wanting to implement phase 1 where you save 50% of your income or $25k over the year. How is that going for anyone working on this as well? what are the struggles...