If you lose, probably just a month delay, limited downside unlike certain plumbing repairs that could flood your entire property.

To me, the deal with a potential for a 40%+ IRR would have to have a much larger downside potential compared to the first, otherwise the risk reward profile doesn't make much sense.

The goal is to expect those mistakes and mitigate the downside so you can continue investing. 

This is the downside to house hacking.

it is the only real downside of this house.

The downside to any HOA is that you are not in control.

The FRO’s are great as they protect your downside for the stated time period, allowing for the close, rehab and refi to take place all while making low monthly interest only payments.If you have the equity built up, the HELOC can be a much better option that hard money lending or private lending.

The one downside to this arrangement is the tracking of expenses because so many household & otherwise personal expenses become split expenses: the landscape gardening, the cleaning of house & rental unit if single payment, the utilities, your tax accountant, homeowner's insurance, umbrella insurance, real estate taxes etc.

Your downside risk. 

Seeing how the currencies and economic systems are struggling right now I just do not see a downside having some metals in investment portfolio.