Investor Consequences: Complex Compliance: Investors may face more legal complexities and compliance requirements with rent control, leading to higher legal or administrative costs.

Call the cops saying they are running a drug operation and they get arrested.

Completely Separate entities with completely separate management accounts means more administrative work and other costs.

Drug dealers start camping in the backyard (kept using extension cords and water from my units). 

But what if he has a drug history?

@Eden Meng contact your Solo 401k administrator regarding regulations regarding leasing  mid term and long term rental properties.They should provide guidance regarding prohibited transactions.

Thanks @Daniel Alhadeff, when you say operator are you referring to an assisted living administrator?

Drugs, Violence, and boardups all around. 

It's doable but you'd be doing a lot in house for fund administration and that is a ton of risk.

An Administrative Interpretation is recommended for a building where a short-term rental will be located.