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

.### Calculate Remaining Loan BalanceThe formula for the remaining balance \( B \) of a loan after \( n \) payments is given by:\[ B = P \left(1 + r\right)^n - \frac{X \left(\left(1 + r\right)^n - 1\right)}{r} \]where:- \( P \) is the principal loan amount ($215,000),- \( r \) is the monthly interest rate (6.75% per annum / 12 months = 0.5625% per month),- \( X \) is the monthly payment amount ($1,394.49),- \( n \) is the number of payments made (60).Let's calculate the remaining balance after 60 payments.

You step in and offer them a creative finance solution that looks like this: (these are real numbers btw):Seller asking: $275,000 for 3/2 Single family split level, 1400 Sqft, with bonus room in basementYour Seller Finance terms as follows:Down payment: $20,000 cashSeller carry back financing amount: $255,000Terms: 5 or 7 year note with balloon @ 2.75% (or any negotiated terms here)Principal & interest: $867.61 per month (wow!) 

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 is typically due to a high principal and low median rent within the area or its remote and I believe it may be a struggle to find tenants.

If the alternative is wait 5 years for a down payment on something you don’t live in, you stand to likely gain substantially by moving on this decision now and collecting rent, principal pay down, appreciation, and tax benefits in those 5 years.  

@Carlos OlivaCash-out Refi:Pros:Fixed interest rate - providing stability in your paymentsLump sum payout - one-time lump sum, which can be beneficial if you have a specific investment or expense in mind.Lower interest rates - compared to HELOCs because they're first mortgagesCons:Closing costs - higher which can eat into your equityResets mortgage term - If you've already paid down a significant portion of principal.

By short I mean about 6 months to buy a DSCR backed house and then I pay off interest for those 6 months and the principal and then I become sole owner?

Please take time to read the Syndications thread here with the never-ending horror stories of paused distributions, capital calls, loss of principal, inability to redeem and so on. 

Since both scenarios pay off the principal (year one vs. year 22), how is the principal handled when calculating the total return comparison?