paying principal on a loan is not a tax deduction. i'm not offering investment advice because that's beyond the scope of this forum. But I see no mention of what they're getting out of it. if the rent is $100 and $90 goes to pay principal and interest you have $100 of taxable income reduced only by the interest paid. you really need a professional to review the entire agreement. In other words, you may not be left with enough cash form the deal to pay the income taxes in subsequent years.
