And a basic principal that if one gets into the business at least cobble enough money together to put up EM... and be proud that you can... 

They are the person(s) who ought to have the power to be your principal.

Sure you'll have some principal paydown, and hopefully some appreciation. 

My neighbors have them on their new homes (built after 06) and they all complain of leaks.When calculating Cash on Cash ROI, the example given in the guide was very simple, 20k down is the investment, take your annual income, subtract PITI and expenses, divide by the 20k and there's your ROI.But, should I be taking the principal from the mortgage payment and adding that to the investment, since it is going into the property and is technically my investment money still? 

I have borrowed money at 10% and made a principal and interest payment for 3 years to fully pay it off.  

Based on the documents we could see (which did NOT include anything from the start of the loan) it appears that over the past three months he has paid about $1000 on a $1600 loan and has paid down about $40 in principal.

I've never been a landlord before, so I guess my questions are:1) Is it probable that I recoup the $1500-2000 I take out of pocket each year come tax time, while my principal is paid down?

Feels like rents are less and not as stable but if you put good tenants in and chisel down the principal you should be able to make some money.I too have thought out of state but not sure the expense of locating and negotiating from here would justify the increase in revenue.

If the agreement lowered the balance from $440k to $270k then the Borrower only has a principal balance of $270k.

I was shocked to find out (I'm not an accountant) that loan principal is not part of a P&L statement.