This choice changes the situation for the lender into an equity partnership which increases their risk, which deserves a higher reward, in equity, cashflow and sale.In any case the lender should be on title (like a bank would) to secure some or any colateral.I am a multifamily real estate business owner and not a legal expert, therefore any agreement should be drawn up and executed by an attorney specialized in your field.

In fact, this does increase their tax bill because of the interest on the loan. 

@Matt Smith Hey Matt, A few items here: You can always offer the 80% of the listed priceThere is already meat on the beat, it is the $500 less than what you're paying right now, and YOU (no, sorry TENANT) is paying down your mortgageDuplexes are hard to come buy in your area [you found one of the unicorns-this is a sign lol] One item to watch is the number of rooms and bathrooms, which could increase your ongoing maintenance expenses, but you already have some capital set aside so you've got that covered too-you're rock n rollin!

Seems scary to take on any additional debt unless unless if you have quite an increase in cash flow or an amazing opportunity due to currently being in a debt repayment plan.

Interest rates shouldn’t increase dramatically over a few months, but this is your call.  

It will be your cash flow and with the cash flow you can refi to increase your number of properties. 

The market has seen a lot of national hedge fund investors that are buying up markets which will decrease available inventory and increase property value. 

I currently own 3 single family rentals and looking to increase my portfolio. 

Increase the potential of buyers to sell the contract to and quicker (more presentable) 2.

The answer of course is to increase both my income and network through real state sales!