The downside is that some people are really threatened by sticky notes and i've gotten a few calls from angry occupants.

If so, where is the downside for the seller?

So if I'm understanding correctly, that is in fact a downside to the Smart Key system

I'm with you @John Arendsen I have yet to see the downside to this process other than maybe some design restrictions, but a single family home that is built in a factory to the same specs as a site built, at triple the speed and 80% of the cost is working out great for us so far.

Overall I like them and it has helped us fill a few empty spots.The only downside I've found to using Sparefoot is it seems to bring in a lot of last minute people who won't be there long.  

Last but not least, where is the downside? 

The downside is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC.

The only downside I see is the very hands-on management of a vacation rental, which I'm prepared and willing to handle. 

The downside to the HELOC is that your monthly cash outlay will increase to service the additional debt.

The only downside are the fees that go with maintaining a license and such, but for me the benefits outweigh the downsides...especially the education and freedom.