There are down sides to this but it is one strategy.

The down side is your are dealing with 18-21 year olds that are getting their first taste of freedom.

What downsides are you thinking of avoiding RE: leasing vs. developing it yourself?

Definitely some downsides to it with the 'debt load' of a whole deal. 

Anyway, there's really no benefit to transferring a personal residence into an LLC...the downside is you trigger the acceleration clause in your mortgage (assuming you have a mortgage)...the bank can call your note balance due if you fail to get permission to transfer title with debt in place. 

If the downside is OK then the look a lot better.

The obvious downside to this is that you have to come to closing with 20% down payment and hope that the seller doesn't somehow back out of their loan to you after they get the cash in their pocket.Bottom line is if you're trying to use a 2nd position on a purchase, make sure your 1st position lender knows and is okay with it.  

Other than that, there really isn't a lot of downside. 

One of the best part of more conventional mortgage loans is that the lender typically will be satisfied foreclosing and taking over the single property if things go haywire, so you can more limit your downside

I guess it all depends on the associated downsides, such as adding CMHC insurance as a drain on cash flow?