Downside is that you will have to pass the self-sufficiency test. 

The downside is that tax liens typically come with a lengthy right of redemption period (in Texas this is up to 2 years).

The downside is you will need to live in one of the units for 12 months.

I only see the downside.

If there is an accident at one house and the victim sues the LLC, the most compensation that he can get is all the property owned by that LLC...just one house.I cant see any benefit of having one LLC own multiple houses when, as someone else pointed out here, the cost of an LLC is $125 and potential downside is the combined value of all the houses.

Secondly, these were generally 9-5 jobs, maybe more like 10-8 jobs, since retail tenants only know something is wrong when they are in their store, so you don't get calls at 2am.The downside is not everyone needs a place to run a business, but everyone needs a place to live, so your potential tenant pool is smaller.  

It doesn't lock you into the bank or terms, so there's really no downside.

Versus putting all the eggs into one basket.The downside is that someone has to be comfortable with turning over control to someone else.

On the downside, I am responsible for all of the 5500's, keeping the plan IRS compliant, and annual BPO's (broker price opinion), keeping all of the properties (for me only 2 small strips and an apartment partnership) separate. 

The only downside is a lot of the local municipalities are starting to limit how many STR can be in each city etc.