Airbnb Partnership Structure

[Ryan McDonald]

I own and manage a successful (Superhost) Airbnb rental in Las Vegas. I’ve had several people interested in partnering up/investing in the business. Has anyone had experience partnering with investors to buy properties for the purpose of Airbnb rental and what that structure looks like?

I foresee retaining the management side of the business and taking a standard percentage for services on each property. As for the property investment side, I’d like to have ownership in properties with a partner +financing so we both participate debt pay down and equity appreciation.

There would be majority investment of down payment from investor with some money from myself and hold the property in an LLC. There is also a sizable upfront investment in furniture and decor to launch the business. What's a fair payback/profit share agreement after management fee? Is it better to guarantee a flat rent (a premium to market) to the real estate entity? Is it better to just all share in the operating profits (or loss) of specific property? Is it a combo of fair market rent plus % of profits? Is there a preferred return for the majority investor or have profits distributed based on % investment so everyone feels like they are being made whole at the same rate? Or should I look for a structure that is a loan for down payment on property and give them a steady return and retain ownership?

Any thoughts or input is appreciated! I know I can make any property profitable. Just need outside money to acquire properties. Not interested in rental arbitrage. The long term growth strategy is equity/appreciation.

Thanks!

[Luke Carl]

Really just sounds like you’re a property manager in this scenario and should charge them a management fee. If you want to go crazy get your license and get paid for closing the deal also. 

Otherwise what you’re talking about is syndicating short terms basically. I could be wrong I didn’t read it all. 

To me the money is in ownership. You’re trying to take away that money and it wouldn’t really be a sweet deal for me. I’m sure you could get some clients but it doesn’t seem to me like a very repeatable model.