The net effect of such a program is a drastic reduction in the term of the conventional loan due to many thousands of dollars otherwise paid in interest are saved as a result of the rapid pay down of principle.  

I have back-checked and found that sellers that had a pattern of frequent price reductions eventually settled to a nicely discounted price.

Being a real estate lawyer or trial lawer you will make up that money in no time; the banking industry is a yo yo industry, most major banks have had drastic reductions in force and they will continue.

It was 3/2 ranch's from the low 100's.Height of the market would have seen double that listing price.So have went from no glimmer of hope in 2009 to seeing some flickers of light in 2012.Homes in my area had gone from 4/3 at 150,000 to bottom of 68,000 about 6 months ago.Now they are treading at 89,000.It seems to me the banks are holding off shadow inventory until the summer.The thought is when they release a big chunk on the market the home buyers will be there to gobble up most of the property at decent pricing versus if they released now the banks might have to take multiple reductions to sell.

So any reduction in the payoff proceeds is your gain.  

If you work with me, how about you give the seller a commission reduction to 3.5% and ask the buyer to reduce the sale price by 2.5%?

Provide an estimate or average of expected water bills to your tenants and maybe even consider offsetting that amount with a partial reduction in base rent.

A big fat ZERO out of pocket expenses other than my cell and Internet cost which I would have anyway.1.

But it's clear they don't meet one of the requirements for that lower income, which happens to be a verifiable good on-time payment history (at least 12 months) of rent equal to or greater than the rent for the unit under consideration, and no reduction in income from that period of good payments.The next two points have not been mentioned yet, so read on.Since they are "renting" from a relative, there is really nothing verifiable unless there are some cancelled checks to prove rent was actually paid.  

That includes $15K principal reduction but you cannot spend it.Your cash flow after finance charges is $28K.