Search  "economic benefits" for a better view of RE.Your taxes are more in depth than simple questions, we can't answer those unless you are specific as to the tax code.Yes, paying down principle is shown in the value of your assets, interest is an expense as you pay it. on a cash basis.

Expenses are repairs (not improvements), tax, insurance, interest, etc. you cannot just subtract your mortgage as principle is an income.So quick and dirtyRent- repairs (not improvements) - improvement on depreciation schedule- insurance- tax- interest-depreciation (house only/27.5) it is common if your rent does not have a much greater margin.

You could offer them 8% interest, paid monthly with their principle re-paid at the end of 3 or 5 years.

There is a bias against sharing profits among the small investors here on BP but to me that is short sighted.  

Put too many irons in the fire and stray from core principles and that's when problems can happen.Have to stay objective and stay the course regardless of it you have 100,000, 1 million, or 100 million.

The city is transforming itself right before our very eyes, an incredible sight.  

I can definitely answer any general accounting principle questions, but you should consult also with a CPA that specializes in Real Estate.Have a good week everyone!

For the first few years of the mortgage most of the payment goes to interest, and escrows and little goes toward the principle, especially with 30 year or more mortgages.2. 

Once I was building a spec house and forgot the cost for Drywall for the whole entire house, it was a silly over sight on my end.Being that my family owned a drywall company, It didn't even cross my mind to see this line item on the spread sheet.

I am investing for priority in the following order:  Autopaying down principle, cashflow, appreciation.This is because I'm in it for the duration.