The drawbacks are:- If you need to refinance to a more traditional loan product your (now lowered) credit score may not support a refinance- Your carrying cost will be between 2-3% per month; those are typical CC terms and much higher than a traditional loan...so your cashflow may be non-existant until paid off- As you identified, getting the initial balance transfer may require some creativity to avoid cash advance fees; for instance, you may want to get an unsecured line of credit at NFCU that you can draw down to purchase RE with cash and then balance transfer to a low rate CC as you describeWhether or not this is a good strategy to use is something only you can decide. 

The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans....but if you have ever received a loan on your primary home, it's likely that you will go through the same type of paperwork here with conventional lending.

That being said, what is the biggest drawbacks/challenges that CRE owners have to face?

Plan on going to the auction since sometimes the bank will bid less than they're owed in an effort to avoid getting the property back (one drawback to trying to do a short sale is the possibility that the bank may be less likely to lower their bid if they know they have an interested party).Call the county office that handles the sale (often called Master-in-Equity in SC) and ask them to explain the sale process and where you can go to view the file.

As I go to these properties, I'm finding that everyone has some serious drawback.

The only drawback?

Are there any drawbacks going into townhomes investing?

Like others have said its a business it has its draw backs at times but it got me out of the rat race from working for someone else so I thought.

Then you just need to move to your next PM and be very clear with the drawbacks and limitations of your previous manager.

Also, I trust you are familiar with the difference between a first and second position HELOC on the benefits and draw backs, something to consider!