Installment Payments: The buyer makes regular payments to the seller, which include both principal and interest.

When we stopped finding good deals about 5 or 6 years ago, we just started throwing every penny into paying down the principal across our fleet (paying off higher interest rates first, obviously).Looking back, we probably should have invested that money in the stock market because our interest payments were about 4 or 5%, and we could have doubled that with fairly safe stocks, but that's water under the bridge I guess. 

Can I use rate and term refinance to pay off my hard money principal (including rehab portion) until the 12 month seasoning period until I can cash out?

This way, maintenance, repairs, and taxes are the responsibility of the new owner, while you continue to collect principal and interest, potentially as tax-free income.I'm not a CPA, just a heads-up 😄, but you could possibly avoid capital gains tax with this approach.

Long term buy and holds are typically more suited as a principal investment strategy and perhaps a Joint Venture. 

The seller will still be responsible for paying taxes on the interest income they receive, and when the principal is eventually paid, there may be tax implications for both parties, depending on how the deal is structured.

The main difference is that you can't deduct the principal portion of your mortgage payment (even though it affects cash) but you can deduct depreciation (even though it doesn't affect cash). 

The purpose of this test is to ensure that the property generates enough rental income to cover the property's mortgage payment, including principal, interest, taxes, insurance, and homeowners association dues (if applicable).Key Points of the FHA Self-Sufficiency Test:Applicable Properties: The self-sufficiency test applies only to 3- or 4-unit properties being purchased or refinanced with an FHA loan.

Maybe it's a way to build generational wealth by having a tenant pay down the principal every month? 

I have 2 offers from lenders:1. from private lender which allows me to buydown interest rate (I can do 1-1 buydown) and rest money will be used towards closing cost (19k - 13k). where closing cost is 13k.2. from chase bank which allows me to use seller's credit towards closing cost and rest can go towards principal reduction.