So you defer most of the principal payment to the future and let inflation take care of it.

In KS depending on how long someone has lived in the house and how much they have paid off of the original principal determines how long a redemption period the present mortgagee would get by statute. 

@Derek Morrison for a rental property your principal payments are non deductible but you get to take depreciation expense over the life of the building and other capex.

I understand the principal here.

Here’s the back story:I have $16,000 principal in my Roth IRA and $9,000 cash that I can use to start my real estate portfolio.

But with the recent appreciation and principal paydown, I now have some equity in the property.

But with the recent appreciation and principal paydown, I now have some equity in the property.How did you finance this deal?

I hashing out this creative strategy I’m piecing together and i wanted to know if it’s already a thing or even a good idea at all 😂Here goes:I want to use the “purchase agreement” element from wholesaling and combine it with the creative financing lease options provide but without tenantsFor example:Bob = BuyerTim = Wholesaler with private lenders- Bobs trying to sell his house for $30k- House has an ARV of $200k- House requires $50k in repairs- Tim has access to $100k in private lender money So in short...ARV = $200kAsking = $30kRepairs = $50kMOTIVATION:The seller is motivated because he can’t afford the rehab and is tired of holding on to the place and he’s not budging from $30k because that’s just breaking even for him and every wholesaler wants to offer $12k so they can include their finders fee hypothetically Tim offers Bob a creative deal where he can get him the price he wants but it’ll be after they rehab and sell it 6 months later at mostBob is interested in hearing the terms since he’s desperate, he also owns the house free and clearTim offers a 10% deposit towards the asking price ($30k) which is $3,000 plus $300 a month as cashflow to the owner while rehabbing the property (6 months max) which will cost $50,000The deposit and cashflow go towards the overall principal So far Tims costs are...Deposit - $3,000Cashflow - $1800Rehab costs - $50,000Reserves - $15,000Closing - $10,000Total - $79,800 Tim gets a private lender to finance the $79,800 with a 10% return in 6 months and it would be paid back all at once so about $7,980 in interest when it’s all said and doneTim sells the house for $200,000 $200,000 - Gross$25,200 - Goes to buyer $87,780 - Goes to the private lender $10,000 - Goes to closing costs$77,020 PROFIT So the play here is that you only pay for the rehab and deposit/cashflow up front and don’t pay the actual purchase price until the house is sold and it comes out of the grossConstructive criticism is appreciated lolPlease no keyboard overlords who get off on sounding righteous and right 😂

The structure was a $10k principal payment, and I would receive a fee of $1,000 after completion.

We had previously bought them on owner financing with principal only payments.