I'm just about to start the coursework and have a greater interest in "law of contracts" as oppose to starting sith "principles of real estate."

@Seth Mosley Those loan I had with a 15 year balloon I paid extra principle each month to pay by year 15...

@Seth Mosley@Jake StenzianoHi Seth Some investors like to calculate pay down of principle or amortization of the loan as part of the return.  

When you are not a bank and do not have a large enough sample size to ensure your default risk premium is adequate to protect your principle, you should have the borrower post additional collateral raise the rate further, get a co-signer (always a good idea anyway) or all of the above.Andrew

Since most on this sight want an empire, quit worrying about reserves and get to buying properties.Dallas Cowboys to the Super Bowl!  

I run my business by the 12 Guiding Principles of KANKETA.

There is a good choice that you will still come out ahead.For example,House 1 rent 1000 mortgage 500House to morgtage 800 - so its $300 higher than house 1 but because you different is $500 you are making $200 plus the principle pay downs and you got your foot in the door. 

. $9600 was 12.5% over 10yrs, hence why I conclude I have to reread and understand the concept better.Hey Kelvin,Let me try to explain the piece I think you're missing...Any payment from the buyer to the seller will include two parts:- Interest- PrincipalIn the scenario that I presented, the buyer essentially wanted a zero-interest loan, so that every penny that he paid to me over the 10.5 years was to pay down the principle. 

It won't always work, but this is a principle that will absolutely serve investors well over the long term.

Hi Alvin,Feel free to check out a blog I wrote for Bigger Pockets a while back about investing from out of state or country.I hope your find it useful.http://www.biggerpockets.com/renewsblog/2014/07/26/sight-mind-real-estate-investing-afar/Thanks and have a great day.