While there is nothing wrong with paying all cash for properties if that's your plan, it's worth really understanding the value of having some leverage and how it can improve your returns.Not saying leverage is better than no leverage (though for me it is), only that you shouldn't make this decision until you really understand the benefits and drawbacks of each.I can save around 30k a year.

FHA has one more draw back paying 1.75% UFMIP fee  of your loan amount . 

So in the end, you may have only had to owner occupy the home for a month or two before you refinanced it into a rental property loan.The only drawback to doing it in this way is that you will have to jump through a lot of hoops with regards to the loan docs, to get your loan closed, compared to a hard money or fix n flip type loan.

Any comments on benefits/drawbacks of this would be appreciated.

So both have their drawbacks. 

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.

It may be $200/mo out of the money, but anything intrinsic right now in an anti-investment period(like right now where holding cash > investments) likely has major draw backs.

The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans....and you need "normal" types of income.  

What are the major drawbacks?

The highway down from Phoenix through Lukeville and Sonoyta is good, and well travelled.The only real drawback is that while there is an airport there waiting for good sized commercial planes, there is not yet a reliable commercial schedule.