By being physically present, you can gain valuable insights into the property's operations, interact with residents, and assess the team's performance.

I ran into this recent TurboTax article  that led me to believe it was possible: Second, you may have a net operating loss (NOL) if the Section 1231 loss is large enough to reduce your other income below zero.

Also I operate 5 STR's myself over 95% performa so I should have some experience in this realm to provide some insight. 1.

@Andres Triveno, operating the LLC 100% means that we sign contracts and other documents as member or manager of the LLC instead of using our own names, we have a business phone instead of using our personal phone, we have a business checking account for business spend.

Also having a higher proportion of revenue generated through the residential component of the building does make financing easier. (3) The exception to the 80% rule I abide by is when the commercial space is leased to a credit tenant with a proven & sustainable business  or where the space presents the opportunity to attract a neighborhood amenity F&B operator (this is most beneficial in instances where you have a larger localized portfolio where these commercial tenants can positively impact the value of your overall residential portfolio).

I also own a short-term rental management company that partners with other real estate investors and second home owners to 2-5x their returns while also taking the headaches out of operating STR’s.

Test the waters with the sponsor for 3-5 years as they hold the properties in the DST, then decide if you want to align with them as a part of your long estate plan.Last (and best) recommendation: Ask your broker what the funds from operations (FFO) ratio is.

I would be careful about sourcing these types of lists from other operators, it takes awhile to build relationships with various companies and most of the company contacts don't like their information being passed around

This is the onboarding process.The next issue we came across was "How involved do we want to be with the day-to-day operations?" 

The best advice is don't buy in any area that prohibits STRs or makes operating them so onerous that you're unlikely to make any profit.