It has some drawbacks; evidence of rodent infestation, has been vacant for a few years, the place is trashed. 

I asked him for the 2nd draw back so I can continue on with another contractor to finish the job and take the loses as it is.

All with some positives and yet drawbacks and obstacles. 

Although the rate is higher than a conventional mortgage, it requires less up front cost than getting a conventional mortgage with 20% down payment, appraisal fees and loan origination fees.Some Details: They will do up to 90% LTV for 20 years at 5.24% with a curbside appraisal only and no closing costs to borrower.Please don't hesitate to correct me if I'm wrong, but after a cash purchase and refi you will have more cash on hand than if a conventional mortgage were used, and this is good for continuing to purchase more properties.Other than a higher interest rate, What are the drawbacks to this technique?

What are the drawbacks of this structure?

I was wondering if leaving some money in a deal to ensure your rental property is cash flowing is a bad idea or what the drawbacks were. 

A contingency is a drawback so if there is a lot of competition for multiplexes in your market you will have to sweeten the deal somehow. 

There are drawbacks to LLCs for small landlords and they do not offer all of the protections if they are single member LLCs.

Personally I like tiny towns and country properties, yes there are unique risks, but I have had low vacancy  and a little higher rents because there are few places to rent in many tiny towns. draw back is contractors and property managers are not plentiful. good luck!

I'm a newbie wondering if I find a private lender willing to use their IRA to help fund a deal, are there any penalties or drawbacks for withdrawing that money from the IRA?