You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

This happens when the loan is fairly new on the house so the principal hasn't been paid down much.  

You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

The parties can pay off the note for principal balance, late fees, penalties, back interest and legal fees any time before the actual foreclosure.  

Same as @John Underwood, @Diaz Principe Nicolas.I would love to get more off season bookings but there ins't much call for a iced in lake house with a foot of snow on the ground and the lake being frozen over.It is fun to see how many turkeys end up on the deck and to watch if wolves use the frozen lake to move around.

The reason it is legal, with some assumptions, is that the person engaging in it is a principal acting on their own behalf.

It depends on where you are on the investing phase, everyone will be in a different part and have differing opinions.I was in the growth phase a couple years so I looked to take on more debt to build my portfolio.I accumulated a lot of wealth after all the appreciation over the past 5 years.I am now looking to decrease my debt.Once the debt is paid down, I will be able to get an increase in monthly cash-flow that would have went to interest / principal paydown.Remember the goal is a comfortable living situation and not to acquire more rentals(or another job).

The current discussion is that we'll agree on a payment and then "x" amount of each payment (same every month) will go to principal (instead of following an amortization schedule). 

Equity gained from principal paydown is also free, if the source of the funds comes from the rent (tenant). 

The appreciation and principal paydown gained over the years was well worth the shell game I played by under rehabbing the houses for rent to keep under that 70% ltv mark and still offering enough to take them down.