Interested to know what the pitfalls are and why passive investing may be better.

This is why you don’t see this being done as their are so many pitfalls with this.

@John Corey we both have money in the deals, and distribution of equity/profits is documented in the LLC that retains ownership So question is, how do we secure financing without falling into the 2 pitfalls mentioned in my original post?

What are top 3 pitfalls to avoid when using OPM to fund a deal? 

That will help to avoid potential legal pitfalls in the future.

Curious if anyone here would know of any other potential benefits or possible pitfalls.

In addition to all the potential pitfalls, you may have to evict past owners.Unless you have done plenty of research on title, the house and the homeowners you might be in for some big surprises.Be Careful!!

Wanted to be informed on what to look out for when first time wholesaling and dealing with buyers/sellers.

Too many legal and zoning pitfalls.

@Ryan IngramAbsolutely, by limiting your overall exposure to potential liabilities and pitfalls.