Regarding downsides, or perhaps good barriers to entry, saturation is pretty strong, good help is quite hard to come by, inventory has been hovering around 25 or so homes for a while (most of which are not STR material), and much of the recent cabin listings have been grossly overpriced.

Most likely the biggest issue would be when you're selling as it will likely come up the bathroom wasn't permitted.It's not too late to get it permitted.

There is a lot of false information out there regarding 1031 exchanges and one of them is that you'll have to pay taxes eventually. That's a myth!If you keep rolling one 1031 exchange into another until your time on E...

What are the biggest pitfalls and things to avoid?

Obviously price will be the biggest factor to move a SFH but there is more that than just a number. 

The biggest challenge was getting past the initial fear that comes with a flip.

We don't recommend that but were watching closely more fore science :)  The automation with Turno and Schlage encodes is by far the biggest help plus it gets a little discount on the property consolidation with Pricelabs. 

If you would have simply held on and collected rent for 72 months, you would have been up money...and that is buying at the peak right before the biggest real estate bubble in modern history.

Maybe that thesis is wealth flows to the biggest and best cities like NYC therefore real estate will outperform else where in the country.

The biggest concerns are external factors from the president, the president did not have play in the S&L crisis back in the early 90s, and same for the 08 crash; the president did not effect that or have the ability to play a role in it to see the large down cycle.