Refinancing out principal-pay-down and equity appreciation is also a common tax free way to generate lumpy income for further investment or consumption.

If you have a job and get put on an income-based repayment plan, pay more than the minimum, as most of that will go towards interest, not the principal. 

Refinance with local portfolio lender at balloon payment and pay back the seller the principal amount.Not sure if it is wise to be going 5 years interest only and building no equity in the property besides how much it appreciates and my down payment.

You'll record the interest as an expense and the principal as a liability (see a CPA or bookkeeper for more details).If you are concerned about making interest payments during the flip, you can modify the terms of the loan with your father-in-law to accommodate.

The rent is about $40 shy of the Mortgage (principal/interest/tax) payment, so I make up the difference out of pocket.

Your initial balance sheet should look something like thisAssetNote receivable - $10,000EquityDavid Hite - $10,000When you get the payments from the debtor - you will record a portion of the payment as payback of principal and a portion as interestCash - $100     Interest income - $10     Note Receivable - $90There can be an additional layer of complexity if you factor in the account "discount on note receivable" but the above is a good starting point.

However, you still would want to keep track of the total amount that you’ve contributed to the account in case you wanted to withdraw your principal before 59 1/2 without penalty.

What real return (including all recurring costs and not including unrealized gain like principal pay down, etc.) can you expect with 25% down, 30 year fixed?

If you use the personal car, make sure to keep detail record so that CPA can prorate the expenses between personal and business.19) Any equipment you rent for the rental business.20) Mortgage interest and property taxes21) There are many others and depends on specific situations.22) Home office deduction:Also, If your home qualify for a principal place of business for RE activity, any mileage to any rental property is deductible.

The 15-year note is nice because every month about $1000 goes directly to principal with the downside being the high cost.