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.

I calculate principal pay down on the mortgage over a period of time.

If you search these forums you will find countless syndication investors burned by paused redemptions, loss of most or all of their principal, investment promoters disappearing, etc.

If you're applying for a Conventional/FHA/VA/ or USDA loan, then they will do a "global cash flow" where they take into account your PITI (Principal + Interest + Taxes + Insurance (hazard and flood) on all properties (second mortgages included), HOA payments, car payments, student loan payments, credit card payments, and installment loan payments in the numerator and your gross income in the denominator.

The distributions are nowhere near high enough to tying up principal in perpetuity. 

Usually income will have to work at the fully amortized (principal + interest) rate. - Lower down payment programs. 

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).

I assume no principal paydown to simplify the example.75% is the refinanced amount.The calculations for the net proceeds are as follows:Year 1: Net Proceeds = $400,000 x (1 + 8%)^1 x 75% - 300,000 ≈ $24,000Year 2: Net Proceeds = $400,000 x (1 + 8%)^2 x 75% - 300,000 ≈ $49,920Year 3: Net Proceeds = $400,000 x (1 + 8%)^3 x 75% - 300,000 ≈ $77,914Year 4: Net Proceeds = $400,000 x (1 + 8%)^4 x 75% - 300,000 ≈ $108,147So, after four years, you have the downpayment for your next property.

I have a monthly payment of $2,157 that includes Interest, Principal, Taxes and Insurance! 

With an assumed loan providing a lower interest rate and accelerated amortization, the income generated from house hacking can be leveraged to pay down the mortgage principal even faster, or the extra cash could be saved to be used towards your next down payment!