The distributions are nowhere near high enough to tying up principal in perpetuity. 

Usually income will have to work at the fully amortized (principal + interest) rate. - Lower down payment programs. 

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

I have a monthly payment of $2,157 that includes Interest, Principal, Taxes and Insurance! 

I assume no principal paydown to simplify the example.75% is the refinanced amount.The calculations for the net proceeds are as follows:Year 1: Net Proceeds = $400,000 x (1 + 8%)^1 x 75% - 300,000 ≈ $24,000Year 2: Net Proceeds = $400,000 x (1 + 8%)^2 x 75% - 300,000 ≈ $49,920Year 3: Net Proceeds = $400,000 x (1 + 8%)^3 x 75% - 300,000 ≈ $77,914Year 4: Net Proceeds = $400,000 x (1 + 8%)^4 x 75% - 300,000 ≈ $108,147So, after four years, you have the downpayment for your next property.

With an assumed loan providing a lower interest rate and accelerated amortization, the income generated from house hacking can be leveraged to pay down the mortgage principal even faster, or the extra cash could be saved to be used towards your next down payment!

Snowball -     Where if I were to payoff a single home with this "extra" money it would increase my cashflow by 8500/yr (but I also lose bank principle pay of 2000/year) so the effective added cash flow is ~6500yr.By the time I add Principal paydown and "slight" appreciation the add homes method seems to be the clear choice.        *** I would love to hear your comments on a debate in favor of the snowball.**** At some point, future, I think I will want most all properties paid off so I can have great flow with minimal stress and maintenance numbers but kinda feel growth phase is still smartest as of now. 

The first ten years are interest only (borrowers can still add principal payments) and at the end of the term the mortgage converts to a twenty year fixed mortgage at the same rate. 

Before getting your salesperson license, I would interview a brokerage first who offers real estate school for principal and licensing with reimbursement?

And like Will said, you now have equitable interest and are thus a principal in the transaction.