@Alexander Knox as a person who has very happily "sold" several STR-Arbitrages, I have long wondered if I am the only one with great results loving it because by the way people bad-mouth it, I don't get it.
I HATE the ignorant response of "well, why not just do it yourself". Well, for the exact same reason I have someone else do my oil changes, roof my properties, fix the a/c, and the countless other things. Because my time is not best served doing all the things. Same reason Sam Walton didn't stand at a check-out register.
My #1 problem with "selling" STR-Arbitrage is that I don't advertise I do this, so I don't know how a Host-Partner would find me and that I do this, and that I'd love to do, a LOT more of it.
It's been a hell of a win-win.
Now yes, I vet the hell out of a Hosting-partner, but that doesn't mean I only take people with giant volume of experience. I took on one who had 1 property of experience, but they did everything right on that, and let me grill the heck out of em, fully understanding my position. They showed the most important traits I could ask for; Understanding and Effort. And, they've done great.
So far, the only issue I had is with 1 hosting partner getting greedy. Read some post or book or whatever somewhere and wanted to press to expand his net $4k monthly too $5k+, which no, pigs get fat and hog's get slaughtered.
Now, I don't do a standard lease. The hosting partner covers all gen. maintenance on everything but infrastructure, we cover that. And it works out very well for both sides. And yes, I get above market rents but so far every one of my STR Hosting partners is clearing on average $3k+net per month, per unit. I'd call that a hell of a win for them.
I know a ton on STR's, I "could" do one myself, but it's a time-suck I don't want to take on. I am happy taking my side and letting someone else thrive in the hosting side of things. What people don't get is this affords me more time and energy to scale, to dig up the next great property, and it affords the hosting partner more scalability in their side of things as their up-front costs are mitigated greatly. It's a win-win.
For example, I got a new one today I am looking to "sell" arbitrage. It was $1.2m acquisition. It comp's out $7-$10k monthly on STR and it could double even triple that with some adjustments to site. What STR person can dump a couple hundred K into just acquiring, than outfitting, launching, marketing a place? maybe a handful of people. But on arbitrage, it's now ten's of thousands vs hundreds of thousands. The site is with acreage for future development, so it's a win-win to have someone operating the existing property for profit, on both sides, while we crawl-forward on land side of things.
I feel like those saying it's dumb, don't do it instead do it all yourself, are just arm-chair-quarterbacks who simply don't know what there speaking of, yelling from the nose-bleed section on how to play a game there never playing themselves.
The concerns of vet your people and strategy, heck yeah but that's universal for any/every business partnership. It is a JV and needs to be approached and entered as such.
But far as issues, my only one is more, I'd like more hosting-partners because I have plenty of properties that come through pipe-line as viable, no shortage there. Maybe I just got a horse-shoe up my wazoo but so far, batting 1000 after a few years into it.
