Hi all, I gave my parents a large gift that they used to make a principal payment on their mortgage.

Advance principal payments on a mortgage don't lower the payment; they shorten the term, which is meaningless if you do another refinance before the term ends.Also, a refinance changes the interest rate on all of your existing debt.

In other words- do we take a 40-50k profit now, or wait fifteen years to sell with a stable rental property, principal pay down, and natural appreciation? 

Unless the elderly couple in OP's example is in the 'trade or business' of mortgage lending, they are not required to issue a 1098 and it is not necessary to complete OP's tax return.An amortization schedule should be included in the owner financing agreement which specifies what portion of each payment is interest and what portion is principal. 

Interest only payments or  principal and interest payments For a private loan on a multi family property.

Specs:Condo- top floor, 2 bed, 1 bath, exclusive back deck and roof deck, laundry in unit, modest updatesPurchased- Oct 2014 for $415K (5% down)Current valuation- $625-650KMortgage- principal $370K ( conventional 30yr,  4% fixed)HELOC (for primary residence purchase)- $23,000Additional investments- $27,000 Rent (beg Aug 2017)- $3000 /monthNet (condo fee, taxes, ins, HELOC)- $300/monthThank you in advance for your help!

Right now between principal pay down, cash flow (after all expenses) I clear 30K a year.

But not trips back home.If you have a home office which is your principal place of business, you have more flexibility.

Yes you will pay a little in pmi but if the deal is good the savings from alternative of renting will be worth it in the principal you will gain.

In execution of a certain Deed of Trust dated … 2007, in the original principal amount of $274,000.00 recorded in the Clerk’s Office, Circuit Court.