But don't risk your entire nest egg. 

. $5400 comes with too much risk and wear and tear on the property. 

Quote from @Michael Challenger: I have no qualms with hard money lending, but I need to learn more about the process and structure to these for typical deals so that I am more comfortable and in a position to reduce my personal risk and risk to investors as much as possible.

I've been here since the beginning, or real close to, and am happy to help you navigate and learn the site.As for where to invest, it depends on your goals, your tolerance for risk, and how much control you want.  

Also, explore creative financing options that might balance your partner’s limited credit/cash flow without putting all the risk on you.If you're attorney can't clearly articulate this, maybe it's time to find a new one.

Cons - Risks as stated by others, can limit which renters are looking at your house. 

Are there any potential risks or downsides I should keep in mind before proceeding?

If you're still interested, take a trip to the site once ground has been broken.The flashy marketing material for a new development is great, but don't put your money at risk for something that's likely to vaporize.

Pricing and risk levels are about the same for the same type of stuff in either city.

Drilling a well or building out a septic?