Fair enough....but there are a number of newbies on this thread who might not know the difference (i.e. that a preferred return does not guarantee anything, and there are in fact drawbacks to such a structure), so my post would still be beneficial to them.

Property owners should weigh the benefits and drawbacks and consider the level of trust placed in the tenants to make an informed decision that aligns with their goals.Promote communication between landlords and tenants for a positive relationship.

I see the major drawbacks in cities like Mpls is the inspection system.

Department of Housing and Urban Development) property, it's essential to weigh both the advantages and drawbacks.

A draw back to blanket loans is that a release fee is often more than the LTV that would be made on that property if made as a single loan.

I don't think we can garauntee that our system wont have draw backs like this, but I also don't think we are garuanteed to emulate it either.

The only drawback that I know of is that they are in very few markets around the country. 

Sometimes you will need to have cash in hand to pay the contractors as they don’t like waiting too long, and when you request a disbursement from the hard money lender.Hard money lenders are easy to work with and quick to issue payment etc but the drawback is that they are more expensive than a traditional bank.Renovations and scope of work● Full gut rehab of the existing structure / Demo + CleanoutSignificant demo cost, as we are changing the layout completely.

As an LP, you can receive passive income in the form of rental income or profit distributions without the active involvement required in direct property ownership.Efficiency in scaleMany investors I talk to, especially in the residential space, say lack of capital and time are two drawbacks that hold them back from scaling.

7 different forms of passwive income has major drawbacks.