Look at how much of your payment is going to principal every month Hard pass on option 2.

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.

What I've learned with this structure is to ensure the you are consistently paying down on principal, or you risk the bank eventually calling in the note, or asking you to restructure. 

My principal balance right now is about 187K.

I've not heard of Investor's Edge, but definitely look at the backgrounds (resumes/Linked In profiles) of the principals to see what they did in the past. 

Right, I'm trying to not refi since I'm knocking down principal 50-60k a year but I may need to increase cash flow in the near future.

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.

But she wanted to know if she can deduct the principal amount that she paid to the person off of her taxes since she has to report the interest as income. 

This includes principal, interest, taxes, homeowners insurance and mortgage insurance!

Working with a hand saw is a lot safer..I am financing 3 larger deals at 7.45% now with a 20 year amortization and a 3,2,1 pre-payment penalty, which is important, because we are going to pay down the principal a little faster and probably will refinance in a couple of years, depending on what rates we see.You have to look at interest rates in the context of inflation, rents and home price appreciation.