You're right about that; however, it puts me at a disadvantage in that I don't know what my rehab costs are prior to my offer.

for example, what pitfalls and disadvantages to you see?

@Nik Sharapov taking a large lump sum withdrawal from a retirement plan would likely be a tax DISadvantage.

It's hard to guess if this annual tax-disadvantaged situation is costing you $20K or $50K.3.)

It is a screaming bargain at $50/$70 (whatever) per month and at least in West Coast markets you are at a major disadvantage if you are trying to do all of this title work yourself while everyone else has 85% of the work done from an on-line database.

That might be disadvantages of having a long term tenant.

Is there any advantage/disadvantage to either approach? 

There are advantages and disadvantages to you the buyer, but they are moot if you are borrowing hard money, as all hard money lenders I know of, if they have good legal advice, require an LLC or Inc. 

When you partner with the State and accept Sec. 8 you are at an extreme disadvantage.

My current work schedule doesn't allow me to attend local REIA meetings so I am at a disadvantage there.