The buyer can simply walk away - and no tax savings are worth it.Reversing it and then immediately re-doing it can be considered fraudulent by the IRS.Also, the IRS requires that the original sale and its reversal happen in the same tax year.If you do want to swim in these dangerous waters, get an experienced attorney first.

Weak applicants have fewer choices and will accept an over priced unit from a landlord willing to overlook their weaknesses. 

What are other potential dangers for investors with leverages in an economy downturn?

I think there are 3 things that give you the most protection from dangers of leveraging:Only used fixed-rate loansBuy properties that the numbers are solid in the numbers (preferably in monthly cash flow over appreciation potential) and in locations where the numbers are most likely to sustain themselves (for example, don't buy in declining markets...https://www.biggerpockets.com/renewsblog/declining-market-risks/)Keep a reserve on hand in case of any unexpected vacancies or large repairsIf you do those three things, my thought is that you have severely mitigated any risk that could come from leveraging (as much as it can be mitigated).

The hardest part about this is that there are hardly any duplexes that come up in the Nashville market, even fewer at a good deal, and house-hacking seems to fit me best.Would it be smarter/better to just suck it up, let this one pass, and continue to save until I have the 20% to put down on a future opportunity?

If you plan to max out at 10 or fewer or buy all cash then either is fine.Owning 10+ properties puts you firmly into the investor camp and you'll need to work with commercial lenders if financing. 

You win the game by making fewer mistakes than the other guy.An important corollary: You can do everything right, and sometimes things still turn out wrong.

I think you're mixing a couple of things which can be pretty dangerous. 

The danger is to the seller.

We are open to any multi family property or set of properties that generates gross cap rates at a minimum of 6% and would prefer newer construction (and hence fewer immediate maintenance needs) and solid tenant quality (i.e. neither luxury rentals nor Section 8 folks but rather solid folks who have jobs) in exchange for a lower immediate cap rate.