The downside is that your cap is unexciting (as far as I'm concerned) and that's ok if having a vacation home 4-6 weeks/yr and net a few $k a year appeals to you. 

The main downside to FHA is that the PMI is outrageously high compared to conventional and it stays for the life of the loan.

Thanks.I understand and you have my sympathies as having to read through all the posts and toss out irrelevant posts and those who make comments that don't have a clue, that's the down side of public forums I guess.Might try looking at some legal sites, get definitions of the obligations, research the concepts in law that allow notes to be created and sold, that is covered in the Uniform Commercial Code.

The other downside is that historically condos don't appreciate as much as single family homes.  

Unless you plan to do the work yourself, there really to me is no material downside to managing the properties yourself. 

The down side I am finding in NNN industrial is that lenders require a 30% down payment, the appreciation is limited, and the vacancy can be a killer if you go 2-3 months without a tenant. (3 months out of 12 = 25% vacancy rate vs owning an apartment building where you have multiple units) Maybe I haven't found the right property yet and I have been looking into lending with a MF syndication group with the goal of becoming an eventual property lead.

Any down side to renting to a HUD tenant???

Thanks for the detailed response Remo, I understand the downsides of a commercial property vs residential.  

Hi all - there are plenty of good reads on the site about the downsides of using hard money, but I haven't stumbled across anything discussing the potential downsides of providing hard money.Aside from the fact that your return is basically capped at your interest rate and the points that you charge, are there any other downsides to providing hard money?

The downside to that is the 20 - 25% down required which I don't have right now.