A loose work piece in a miter or sliding miter saw can develop a mind of its own faster than you can react.  

Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

I for one plan to soon target this niche to HELP PEOPLE, while making a buck... and (just as importantly) costing the PTB and their public and private companies, when fewer people go 'bk,' loose their equity and/ or credit, in addition to the the roof over their heads.

The key point as other investors have noted is you that you make money when you buy, meaning make sure you don't pay too much for a property that will loose you money each month.

You are buying them subject to any senior liens, so you and your friends will loose all of your money once the 1st mortgage finishes their foreclosure.

Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

Admittedly, if a nationwide recession hit, and property values and/or rent dipped 15 or 20%, this person is subject to loosing 15-20% of $900k in properties, rather than the widow's 20% of $225k.Then, if you use the BRRRRR method, the cash-out refinancing, once you have enough equity (usually through remodeling the property, but sometimes through market appreciation) allows you to ideally grow a portfolio of rentals with 100% financing....and zero of your precious equity left in the property.....I know of a BRRRR investor that turned $80k cash into 30 rental properties worth about $8million ($5million in loans, $3million in his equity) in 5 years....granted, he bought at the bottom of the 2006-08 recession and benefited....but much of it was the buy at a discount and remodel profit.Read some real life case histories of BRRRR success here on BP:I think @Joshua D. , @William Collins and @Austin Fruechting did in 5, 2.5 years and 7 years, respectively, buy using BRRRR:https://www.biggerpockets.com/forums/223/topics/459415-500k-net-worth-in-5-years-im-30-today?

Folks always get caught up in the cost of hiring a crew & forget how much money they loose in lost time, opportunity cost & missed rent.

Some investors may say that it isn't worth it, mainly because after becoming licensed, you are bound by a different set of rules.

If the real estate market crashes again like it did in 2007-2008 aren't people who are leveraging at a risk to loose everything?