I would encourage you to learn the market you plan to invest in now and to continue to learn about the different methods of investing.

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

We've seen the rental market soften here in the greater SD area as whole, prices may continue to soften towards the end of the year. 

Emphasize how this arrangement could work to their benefit, offering steady income, avoiding a traditional sale process, and giving them the freedom to move forward with their plans such as buying that sailboat and sailing around the world.If they ultimately decide they’re not interested in selling, you’re still in a great position to continue your search and buy your own property in the near future.

The biggest thing is vetting the operator as they ultimately drive the returns.

@Patrick Pan, if I was operating in a state where that was a concern I would just contact their current landlord for a reference.

I have managed STRs for 10 years in Los Angeles, so I understand the business and operations.

Since companies have a limited lifespan (10–18 years on average), cities must attract new businesses to maintain job opportunities.Factors Companies Consider:Low Operating Costs: States with lower property taxes and insurance costs.Low Crime Rates: High-crime cities deter businesses and tenants alike.Natural Disaster Risks: Avoid areas prone to disasters, as recovery can take years, impacting your rental income.City Size and InfrastructureFocus on cities with metro populations over 1 million.

I do NOT think having an operating LLC located in a different state than the ones owned is overkill. 

Looking to see if anyone has a basic template of an operating agreement for a business partnership of two parties involved in the fix and flipping business?