Now, if you could get him to sell you the house, after which you could sell as a principal—that is legal.

Lastly, it can vary by lender, but some may only require you to pay interest during the draw period and then it will switch to principal and interest for the repayment period.

I would be the liaison between the principal and the GC's (principal is an equity group out of Europe). 

You can also factor in the cost of the principal payments in your cash-flow analysis.

I was helping my cousin purchase a property and his lender informed me that because I had written on the purchase contract that we were related that the investor fInancIng the loan wouldn’t lend to my cousin because it was a rule they had that there could not be any relationship between agent and principal.

Plus, on a HE Loan you will be paying principal and interest, while with a HELOC you'd probably only be making interest payments during the draw period. 

House appraised for $125,000 and I put about 20K into repairs, upgrades, appliances, etc. 18 months later I have been paying $300.00 extra a month towards principal and I now own $56,000 on the loan.

I am looking at the strategy of taking out the HELOC and then putting everything into it using it as a checking / savings account, and using it to help pay down the principal faster.

So, if the IRA were to invest in real estate, there would be a solid asset held as the principal of the account, and that asset can spin off positive cash flow. 

If I cash out about $40k, I'll save about $187 monthly that I can pay down the principal or keep stacking for future needs.