You bring up really good points but I think you're underestimating how much principal you're actually paying off any given time with a 30 year compared to a 50 year term.

We don’t file 20 separate returns.

He wants some cash either in lump sum or annuity in the form of interest and principal payments or continuing to receive majority of income.

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).

@Ethan Whaleyi still can't tell if we're saying the same thing here, but principal paydown can definitely be more powerful than appreciation (although ideally you get both.)for example, i have a low rate on my primary residence, and so i'm already - just a couple years in to the loan - paying off large amounts of principal every month. 

Same goes for number of LLCs and what to fund them with, since bear in mind that CA tends to be more cumbersome and expensive to have LLCs than other states.California is generally more involved than other states when it comes to taxes and filings.

A 50-year mortgage moves principal so slowly that equity growth becomes almost nonexistent.

While having principal paydown does reduce cash flow, you do get equity growth.

This county is stating that the starting auction amount can only include the principal amount of the certificates which we have paid over the last 4 years, but cannot include the accrued interest or the auction fee the County charges investors to start the process (which total ~$4,000 in this case). 

Also at this time in 2020 the property owners filed a Complaint and brought a QUIET TITLE Action Motion for Summary Judgment against the 1st lien Mortgage Note holder (remember originally was a Subordinate 2nd lien that then slid into 1st lien position when the 1st lien was paid off in full around 2014).