Reverse Arbitrage - San Diego Townhome - Medium Term Rental

[Joshua Foxton]

I have a townhome in San Diego close to a hospital (2 bed, 3 bath, ~1600 sq ft, could almost be 3-4 bedrooms with a smaller common space, and the office thats available too, and a 2 car garage) that has been a long-term rental for well over 6 years (with a full time property management company).

We considered AirBnB, but it does not comply with the HOA regs (No STR). However a medium-term rental (MTR) would work and is compliant.

I am long-distance, and do not want to spend the time/effort/money to furnish and run a medium term rental, but am open to the idea of helping a younger entrepreneurial type investor (probably would need to be local to the SD area) to run this.  This is the offer: Looking for a MTR Manager, willing to do reverse arbitrage (you rent from me at a higher than normal LTR rate, and then rent out to traveling professionals in compliance with HOA and MTR best practices.

Depending on the situation, this could bring in ~2-3000/month/bedroom, so anywhere from 4000-12000 month in income depending on your strategy and management style.

Please reach out if interested, serious inquiries only please: I will expect you to be able to provide a business plan/strategy, key assumptions/planning factors, as well as a projected offering for your monthly payment to rent the space. Also, I will want this done legally with a formal contract.

To those perusing and not interested in the offer, this is my first time exploring this idea, so very open to tips/warnings/spears/insights/random musings/etc as i work through this idea. My first questions to the group to start the think-tank-ing: 

Q1) what Investor delta and Arbitragee delta should i expect to have in this scenario? I'm defining my deltas as: 

a) (Investor Delta) = (Monthly Arbitrage Payment) - (Monthly Expenses)

b) (Arbitrage Delta) = (Property Income) - (Monthly Arbitrage Payment)

Q2) What should I NOT budget for anymore (or budget less for), as I am more of a note holder than the rental manager, and the new manager should budget for? I'm thinking:

a) DO NOT budget for: Property Manager / Utilities / Leasing Fees

b) Budget LESS for: Vacancy / Mx 

c) STILL Budget for: PITI / Cap Ex / HOA / PMI

Thanks for everyones time!