Most note investors originate new notes or purchase existing notes (sometimes at a discount to principal)..  

We’d rather take low double digits passive with lower risk over 25-35% active with the risk of principal loss.

Hey Adam, you aren't missing anything besides the drawbacks of the Section 8 program in general.

You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

Question on the ARM, is there a negative to making extra payments to the principal?

Your goal is to build equity, which can be done through several ways (cash flow, appreciation, principal paydown, tax shielding, etc).

All that is due is your principal balance.

On principal, I am against "generational wealth".

In addition to the $75k "cash flow" you mention i assume you're making principal payments on the debt which also records in the profit column at the end of the year.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).