No option is really better or worse than the other, they both have benefits and draw backs. 

Any drawbacks?

The drawback I find with Craig's List  is that it has a limited number of editions in any given state, and they revolve around the large cities. 

The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans (more on those in a second)....but if you have ever received a loan on your primary home, it's likely that you will go through the same type of paperwork here with conventional lending.

Are there draw backs to it? 

The drawback of course is that you may be looking at smaller returns %-wise.

LendingOne charges 1.75 points as doing-business fee, but if I qualify for 4.5 and compare to banks where I'd pay 1 point to get 4.5---  with no hope of fast closing, among other drawbacks---  1.75 would be alright.

The biggest drawback I am having is calculating cost for repairs & finding a reputable contractor for a fair price - I know nothing about renovations right now.  

What are the drawbacks to something like that?

There are drawbacks however, and it certainly isn't cash as multiple draws, estimates, and appraisals are required throughout every step of the process.