Other than the risk of rejection is there any down side to offering? 

Having that much debt on one portfolio carries a huge downside unless you split the investors.

In your opinion, what are the downsides for a landlord?

I think there is no point on trying to predict the Market Crash because you should always put in the protection on the downside because the upside doesn't need protection!

The only downside is that the appraiser maybe new, or inexperienced, and it's not a purchase so you need to lead the appraiser to the numbers you want them to meet for your property. 

There is a lot to love about this market and some downsides, which I will also cover.

If people in the system were displeased, the turnover would be substantially higher  On the downside, this path will cost money. 

The downside is the turnover (3-6 months on average) and you would need to furnish your current residence. 

I know this amount seems low, but you have to leave cushion to absorb downside such as high vacancy, depressed rental rates, major repairs, tenant eviction.

There is no real incentive to protect downside risk in some situations, because everything is upside for the deal sponsor.If it does really well, then they make $4M in fees, and another several million in carried interest.