The drawbacks are that it currently does not allow for e-sign of a lease or the collection of rent with a frequency other than monthly.  

What would be the gain vs drawback of either method?

What requirements should I keep in mind, and what are the benefits and drawbacks of each?

@Arlen Chou I agree it will work, the only drawback I see the monthly payment might increase after cash out, also hope the interest rates don't start going up in future

What do you think would be the drawbacks I should me more concerned about?

Long-term, buy & hold is a great strategy - I've always been a firm believer that you have the upper hand with these properties in the investment field because you have the advantage of being first in an area then being able to wait for appreciation for whenever you want to sell "when the time is right".Often times, these rental properties also don't involve the full scale upgrades (less money out-right) that you would need in a traditional fix-&-flip in order to hit projected ARV's.The one draw-back here is out-sourcing your rentals to a property management company - which finding the right one for the right price can take some time to vet - or else managing the property yourself, in which case you will need to start building relationships with contractors to ensure proper repairs are being done and the needs of your tenants are being met.You can do buy & holds out of state easily, too, just find the right market that is land-lord friendly (for example, mid-west: Indiana), and I think its fair to say you could do well long-term with the right properties!

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.

[Beware = https://www.biggerpockets.com/renewsblog/house-hacking-drawbacks/]I would look for a 2-4 unit too house hack.

However, if I open one in Florida, I can be my own registered agent, but I'm wondering if there are any drawbacks to being a "foreign LLC," when my rental is in another state.

What are the drawbacks of having your buyer close with a land mortgage vs straight up cash?