Master Lease to Rental Arbitrage Company for Refi

[Travers Xanthos]

Hi all,

There are businesses out there that do rental arbitrage, where they sign master leases on properties and then operate short term rentals out of the units.

In that case, since there is a signed lease and the property owner is receiving a fixed amount of rental income, I believe that lenders would look at that as long term rental income for the owner, correct?

I actually have a rental arbitrage business with 20 properties. I am looking to start implementing the BRRRR strategy but would like to maximize my cash flow by running a STR instead of a LTR. I understand that it is difficult to find a lender that will consider STR income when qualifying for a refinance without having to wait a year or two.

Would it be possible for me to create a separate LLC that leases the property from me and makes monthly rent payments so that I could qualify to refinance the property? It seems like this would work, in theory, but I wanted to get some feedback from the forum before I solidify this as my plan.

Thanks in advance!