How are you partnering on STR deals?

Question

In an effort to always grow our knowledge bank and sharpen our investor skills, I would love to get a discussion going on different partnership structures for an STR.

What are different ways you have partnered with other investors on your STR investments? Maybe someone brought the capital and you brought the sweat equity? Partner bought the property and you arbitraged? How did you determine the profit split on a co-owner property? How did you find your partner?

Mark Miles · Answer

Typical structure I use is:

Financing partner: Mark Miles

Head of Operations: Mark Miles

Chief Profit Taking Officer: Mark Miles

It’s worked well so far!

Collin Hays · Answer

A good partnership can potentially produce a business that is a multiple more successful than a business that is single pilot. I would hazard to guess that the most successful companies of all time were partnerships.  Microsoft, Apple, etc.   That's because each partner brings a key skillset.

Were the Beatles individually as successful post-break up?  Not even close.

I once started a business that produced about $100K a year in profit.  I brought on a friend of mine as a partner, and through his skill set, it's now at $100 million per year business.  Unfortunately, I sold him my half way back when, to fund more of my "own" businesses.  He now owns 2 private jets, a mansion in Santa Barbara, a lodge in Breckenridge, and lives comfortably here in Texas.  I still fly commercial, and only seldom first class.

Note to self...

John Underwood · Answer

I'm not.

Partnerships are a last resort that I haven't used.

I see partnership deals and I see them only getting 50% of the profits. I prefer to get 100%.

Conner Olsen · Answer

@Joe S. property was in my name and getting a quitclaim into joint LLC. We will hold for at least 10 years and then we can decide to buy a partner out, bring in different partners and sell your shares, or sell the property all together.

Conner Olsen · Answer

I'm in a partnership for a STR. I brought the mortgage and my partner brought the downpayment. We split everything 50/50. It's working great!

J. R. Crowell · Answer

@Collin H. I agree.  With the right combination of resources and skillset, you can exponentially compound your growth. @John Underwood I can also get in this camp depending on the deal/business in question. That's the beauty of the REI world: lone wolf or pack mentality, there is a lane for you.

Collin Hays · Answer

Nah.  He works hard regardless. We’re still best friends.  We’ve both done well.  He’s playing with dollars, I’m playing with pennies, but it’s all good. No hard feelings.

Joe S. · Answer

Do you think your ex partner would’ve tried that hard to build the business if he knew he only had half? In my experience people seem to try harder if they think it’s theirs.

Joe S. · Answer

How did you title the property? What kind of exit plan do you have in place?

Jeremy Nault · Answer

I love this question!  I don't have any experience with Short Term Rentals, but would love to hear about the different structure's people use when forming STR Partnerships.

How are you partnering on STR deals?

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