In California, the same type house that sells in other states for $200k sells for $1 million and there is often a profit spread of $100k or even $300k if you get a sweet deal and there are plenty of them if you look.The huge downside , and I would never move, is the constant increase for taxes taxes, the high cost, difficulty and insane time it takes to get building permits approved, the cost for gasoline is the highest in the country and the cost to rent an apartment is more than the mortgage and property taxes to buy a house in other states. 

They also have preferred relationships with lenders.Unlike the firms more commonly referred to as "turnkey" operators, however, Roofstock does not renovate properties before sale, nor do they run in-house property management.The upsides seem to be that:Their marketplace lets you search, filter, and analyze many properties across the Roofstock markets more efficiently than any single turnkey operator or marketer doesTheir properties do not carry the typical turnkey markups, which may leave a bit more meat on the bone (these tend to be rental properties owned by institutional investors)The provide much more complete and useful data in their proformas, with the ability to easily tweak assumptionsThe downsides seem to be that:Properties are provided as-is and likely haven't had a complete renovation, so repairs and CapEx may be higher with their properties (though they do disclose details and expected useful life on big ticket items like the roof and key mechanicals)You lose the "one neck to choke" benefit of turnkeys, though they do assign advisors who are available to assist you throughout the process of closing on the homeIf you are familiar with Homeunion, Investability, or Mashvisor, they are all worth a look for comparison. 

Its advantages are that you can put low down and not have to deal with FHA self sufficiency rule (down side of FHA) and it has way less expensive mortgage insurance than FHA (1.75% upfront one time +.80 to .85% month for up to the life of the FHA loan).The downside of Freddie HP is that you cant really use it in more expensive coastal markets because the price is too high and if there are income limits to qualify for freddie HP its going to be a game of chicken or the egg.

The down side of this, of course, is that our taxes are a little higher.

Also, one big downside to SFHs is that the occupancy can go from 100% to 0% with just one tenant, something I'm sure will concern lenders. 

I highly doubt a month to month tenant will throw $1000+ to repaint a place if I could for any reason kick him out on month #2.The financing aspect someone already discussed, many banks sees yearly lease as stable income and monthly leases as something less desirable.The downside of yearly or longer leases is you can't raise rent except at renewal time if the market goes up, and even then many landlords feel the obligation to keep rent the same for a good tenant. 

Is there a possible downside to not doing so?

I did that based on the advice of a friend that does evictions.There is ZERO downside..... if people want to leave, they leave regardless of the lease terms..... and that warm fuzzy feeling of a long term lease is an illusion... you are not likely to see a dime of the remaining lease if they bail.On the flip I can get rid of them WAY faster at any time I decide....

Lotta downside there I guess...

The downside (I prefer that term rather than “con”) is that there is a larger outflow of capital and time as the facility gets built, leased-up, & stabilized.