Knowing your options make better and more profitable deals1.

I would assume that you'd just simply sell each individual lot to the developer at a set lot price such that your cost to purchase the raw land and improve it to buildable lots was worth the proposed profit per lot.  

The market is saturated with STR's further from the beach and attractions, so my advice is to be picky about your location and underwrite the numbers carefully to make sure the investment will be profitable. 

I’m Jorge Vazquez, a licensed broker, investor, property manager, and coach of the Property Profit Academy.

My advice is to keep taking profits along the way. 

The profitability is very depend on the lease you negotiate with the property owners.

I was told the investor pays to lease out the entire flat for 6-12 months and then sub-leases the individual rooms for a profit.

In other words, the cap rate becomes fairly meaningless upon transfer.Your job is to assess whether or not you can make a good profit after buying the asset at whatever the sale price is. 

In your second post you recommend hiring "a legit STR manager and pocket[ing] the profits".

Short term lenders balance sheet lenders like myself love pre-pays as most of our profit is in fees, so the quicker we can get the money back the better to relend the same funds.