Not saying they should do that but frankly I'm getting my principle back on everything I buy in 5-10 years.

You illustrate one of the most important principles - surround yourself with knowledgable professionals and lean on their advice.  

So instead of dealing with tenants they just collect an interest and principle payment from you every month, avoid a tax hit while still generating cash flow on the investment with little time involved.  

Consequently, I went on to attend his three day-seminar called “Financial Principles”.I know what you’re thinking: “Three days of running numbers through a calculator?”

If they latch on to Dave's principles, there's decent likelihood that they will remain renting for a while, and the class is only $100.I've heard of free carpet cleaning for renewing a lease, and I've heard of reimbursing ACH payment fees for on-time payments, but I'm curious if there are other ways to keep great tenants using creative ideas?

As @Bill Gulley pointed out, each of the properties can be released individually to allow for a sale of any single property; make sure that in exchange for the release you actually get a payment of a big chunk of the loan principle amount since that way your funds won't be diverted to some other expenditure the borrower might have in mind.And you want to see scope of work list for the properties to be renovated from the loan proceeds, plus contractor estimates for the scopes of work to ensure that the loan amount will be sufficient to cover those planned improvements plus the unpaid liens. 

@Peter SchuylerExtra payments each month will go to principle, which has nothing to do with taxes.

In contrast to the naysayers, here are the opinions of three major players in the residential housing market: Click here to view.A recent article by Teo Nicolais, a real estate entrepreneur who teaches courses on real estate principles, markets, and finance at Harvard Extension School concluded that the next housing bubble may not occur until 2024.The article,  How to Use Real Estate Trends to Predict the Next Housing Bubble looks at previous peaks in real estate values going all the way back to 1818.

It will complicate things, and be expensive if you are in CA (but there are ways to deal with that too, you need to consult an expert), but the same principles apply.5) Do we need to take umbrella insurance?

This is a long-standing legal principle.