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. 

Example: purchase price $100kSell price 240kTaxed 140k minus expenses. your cash out refinance is not a consideration for taxes and neither your loan amount as far as taxes go

I know bare minimum I could turn around after the redemption period and just sell it for a higher amount.

Has anyone closed these new 40 year DSCR cash out loans I see advertised as fixed rate options? 

I can think of several reasons - but the bottom line is that since a HELOC is going to have a higher, variable interest rate, and a DSCR or conventional loan is going to have a lower, fixed rate... it wouldn't make any sense to have the BRRRR sit on the HELOC. 

My First BRRR Deal in Milwaukee

Purchase price: $95,000

Cash invested: $33,785

This property was acquired by a hard money loan with an interest rate of 12.99 percent. We rehabbed the property and ...

With this in mind, I am wondering if I should fix it and sell it, rather than rent it again.

30 yr fixed Vacation/2nd home loan with 10% down.

In my real estate business, I have been fix n flipping houses or using the BRRRR method.

One lesson learned it the amount of garbage a house can hold!