To your tax question no the revenue would not be earned in 2016, like mentioned above you're not really earning a full years rent, you're earning it each month with the balance being "pre-paid"....similar to how your deposits aren't counted as income, they're being held in escrow essentially.

Our fund tries to take a balanced approach being providing a 'decent' (8%) current yield from the cashflow to the investors, but then also having some upside due to adding value and driving up rents over time to give us some forced equity.  

The balance of the loan is now over $ 600,000  with fees , late charges .

Include a master rent roll that details rents collected and outstanding balances for every unit.A monthly review of aged accounts receivable reports will help you spot potential patterns early, allowing you to modify your leasing strategies before things get totally out of control. 3) An Uptick in Resident Complaints Residents deserve to have a consistent and efficient way to report maintenance issues.

Assume a sale price in year Y, and those principal payments will be factored into your return on investment calculation because when you sell the asset you will be paying down a mortgage balance of (Original Amount - Principal Payments + Outstanding Interest). 

I don't have to sell the place to get him/her the balance . . . just coming out of pocket every time I do one of these is a little hard on my wallet . . .

Or is it merely stripped from the homeowner's file, but the balance still needs to be paid?

Fannie does not do high balance cash out and Freddie can only cash out on high balance cash out on non owner if you have 1-4 financed properties total and no more.They could always go to a portfolio lender or private lender to cash out as well.

I know subject to would be an option if the balance is reasonable and the cost to bring current is reasonable.  

"Left over" money gets applied to lower your mtg balance.