What is the risk there?  

A good PM is efficient with solid policies in place that enable them to act quickly and prevent things from getting out of hand.Legal Compliance & Risk Management: A good PM knows the law and protects you by obeying it.

The best strategy really depends on your goals, risk tolerance, and your market conditions.

And best part, that's tax-free $, because it's not income, it's a loan.

As repeatedly advocated on BiggerPockets by myself and others, house hacking is one of the best forms of entry into real estate while mitigating risk.

For pre-2022 loans with lower interest rates, direct transfer to an LLC could risk triggering acceleration and result in refinancing at a higher rate.

I would rather lose 100 bucks a month in a solid area, than risk making 200 bucks a month out of state, class C-D, or in an area I don't fully understand. best of luck

Risks/rewards, benefits/pitfalls of hard money to me...what are they?  

Different people expect a different combination of risk/reward.  

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build.