One downside we've found is that payments made by tenants can't be refunded and tracked in the system (like when a tenant has a recurring payment scheduled but makes an additional payment by accident).

That downside is that payments made on Pay Pal can take several days to process and it requires the tenant to follow exact instructions so that the payment is not delayed or so that you are not charged a fee.

Insurance companies, pension funds etc. are always looking to beat the market as well.Furthermore, lets be clear, there are upsides and downsides to EVERY investment and loan, even a 1% loan at times from your bank.

The downside which might be an upside - I have to stay extremely busy to not touch the savings.Good Luck...

That's never fun, and that's definitely the downside of turnkey investing.

On the down side, you cannot get a conforming loan as an LLC and you have to transfer the title later.

So, IMHO, the "asset protection" argument is a red herring.Now, the down side to buying four houses with leverage vs. one is the exhibition transaction costs associated with real estate. 

The only downsides are 1.

The downside is this restricts me to one location and one market for both buying and renting.

The main downside I see to self-insuring is that you're susceptible to catastrophic claims.