Corporate housing companies (MTR/STR Arbitrage)

[Riley Magnuson]

Hi all,

I have a rental house where I have been contacted by multiple corporate housing companies that would like to sign a ~24 month lease on my house and flip around and rent MTR and STR. Some of the companies is connecting me to investors where others it is the owners of the companies looking to get involved themselves. I have found varying opinions both on these forums and elsewhere on these arbitrage strategies. I am hoping to find those who have experienced or tried leasing to these corporate housing companies. The most prominent company is "Corporate Housing Specialists" and was created in 2022. In these situations i would create a lease and add a few addendums that make sense, and the business would be required to get insurance. I will continue to do due diligence so to not enter a scam but does anyone have personal experience or opinion to share on whether to explore this further or not?

[James Hamling]

@Riley Magnuson I think it's applicable here that one of the top questions I get asked when I chair a panel on various leasing strategies is "How are you leasing to _____ corporations". 

I have leased to Cargill, American Family, State Farm, 3M, on and on. For reasons not understood to myself, this seems to be a more rare thing. And with that, the knowledge of such is equally rarely known. 

Now in the vast majority of those cases, no the corporation itself is not directly leasing, they are serviced via 3rd party contracts. So my lease is with that 3rd party, but it's Farmers Insurance co.. 

Now, it sounds like you may, or may not, be dealing with one of these 3rd party vendors. That's 1st item to sort-out, who are you dealing with. And no, I all but never speak with the owner of the company, these are big companies I am dealing with, yes the 3rd party vendors, if they say they are the owner that's a big red-flag to me. 

Now, the whole arbitrage thing is becoming more and more trendy, with various hacks trying to press there way in, especially on STR. So going to have to sort out if it's one of them or not to filter them out. A simple way is asking how many units they currently have, and for some evidence of such.

Now yes, I do arbitrage out some properties, but I vet the heck out of my hosting partners, and if you don't readily know how to, or how to make a titanium contract, don't play with it. 

Each time I deal with one of the corporations on a housing placement, they have details. It's for _ person/family, __ corporate interest, for __ contract term from __ cause. A lot of times it's employment contract of over-seas person coming here or insurance coverage of a home fire. I prefer the corporate recruits, just much better tenant quality in my experience. 

In either case, there is a negotiation of price and terms. From what I hear, most rather suck at this, I don't, so I get very favorable rates and terms. What any one person get's will vary on your negotiation skillset. 

Hope that peek behind the curtain helps.