There are drawbacks to individual leases, mainly one person not paying rent, so you try to evict only 1 person, etc.

So you'll need to rely on the reports which is another drawback, since they are about one year old, as these were done when HUD owned the loan. 

What are the drawbacks, besides the cost of the second LLC registration?

There's benefits and drawbacks to every kind of loan, but this is a great way to get started!

So what are the cons/drawbacks of using OPM.

As the saying goes, don't let the tax tail wag the investment dog. 1031's come with a number of drawbacks, one of the biggest being the timeline requirements.

Yes, they do have to approve renters, another drawback, however this screening is to assure that the building has a certain type of resident.The amount of work and restrictions with this property doesn’t warrant the investment.  

I invest in Kansas City and Seattle areas and both have their stengths and drawbacks. 

For max cash out without restrictions / conditions - 180 days.The main drawbacks would be marginally higher rates (50-75 bps higher), always some kind of prepayment penalty, and because the asset is the primary function of the loan - a non-cash flowing property (maybe lux or bad market) may not qualify.

But one of the main drawbacks I noticed for people looking to purchasing Multi-family homes, is that it's hard not only to analyze deals that you find online (like on zillow, redfin, ect) because they don't show all the income/expense information but it's also hard to refine your search criteria.