First STR or Private Money Lender?

[Mike Gorius]

Hi Everyone,

My parents tried the STR thing out for almost a year and decided it was not for them. They bought a beach home with cash a while ago but have decided to take their money and run, seeing as it has already appreciated more than expected. I was sad to hear this as it could be a real cash cow in the warmer months, but it's their call in the end.

On to my question. I think I know the answer to this, but I would love to hear some more experienced investors' thoughts and reasoning. Which below option would you choose?

Option A: They have agreed to sell me the property for market value. This STR would bring in $20K+ profit annually based on the numbers.

Option B: They bought the property cash and have agreed to be a private money lender for future deals if the guaranteed return is worth their time.

Should I purchase an STR with solid cash flow and appreciation potential in a beach town or use their cash to fund multiple deals a year? Some of you may ask me, "will these multiple deals equate to $20K+ profit annually?" My answer is, no, not based on rents alone if I do buy and hold. It would eventually turn into a yes if appreciation continues and I sell these properties for a solid profit in 3-5 years.

Thanks for your time,