STR - Transferring the business to new owner

[Levi Koskan]

Hi BP community,

My wife and I are excited to be in talks with a seller that has a duplex with which he has been successfully AirBnBing. Our plan is to live in unit B and continue the STR strategy for unit A. The unit and the seller are crushing the occupancy rates (even with covid) and have 5 star reviews. House hack situation.

From a business perspective, I view this as buying an operating business. The problem is that the seller nor us, have a great idea on how to transition the business and all of its assets (property/owner ratings, future guest bookings, ect..) to the new owners. I'm looking for some sage advice on those who have sold a STR property in the past that might be able to explain some of the nuances.

The seller is very experienced in running the STR business so I'm also considering writing into the contract terms for ongoing consulting and access for up to 90 days after close (or something like that) to make sure the business keeps producing while we learn the business. Curious if anyone has seen anything like that and could provide a template?

Thanks for all the help!

[Bradley Chapman]

Levi,

I have first hand experience in buying and selling operating STR's, and while you're unable to transfer an Airbnb listing there are absolutely ways to take advantage of the situation without "starting over." Partner and I recently purchased a duplex where both units were being run as STR's (very successfully). From the date of closing, the seller had 20K in bookings that we were obviously interested in maintaining, so we negotiated in the contract that seller would maintain property management responsibilities for bookings 60 days after closing to maintain continuity with guests already on his calendar. In return, seller received 10% of the booking fees. This also allowed us to have a 60 day ramp up period with our newly created Airbnb listings so there were no wasted months from the time we closed.

Lots of different ways to do these types of deals, but if generating revenue from the day you acquire the property is high priority, I would suggest a strategy that includes working with the seller for a period of time after closing.

Best of luck!