And always have reserves to handle any unexpected issues.

If you go with the partnership route1) You need to manage the money going in and out of the business bank account.2) File a partnership return and be responsible for issuing K-1's3) make distributions to you and your partner for cash flow that you receiveYou will likely spend many hours on a nice gesture.I may want to consider instead to give a christmas gift or a bonus for early completion of projects.

Spoiler alert- Phx is quite a saturated STR area, and many STR's (although some are doing great) are having major occupancy issues. 

One of the biggest issues is probably borrower default—whether due to mismanagement, market downturns, or unforeseen circumstances, lenders can end up in long, costly recovery processes.

Waiting until the 1-year period ends avoids potential loan issues and simplifies things.

We rarely have issues, but it seems like such a small investment in time and money to take one day to verify. 

There are several other issues (undisclosed maintenance markup fees, excessive charges to our account, significant reductions to agreed rent without communication, etc).

Hello,I've had some issues with excessive costs through my property management company over the years. 

@Kayla Elliott  Hi Kayla - this was a commercial mortgage loan with a local bank, that held it "in house" after it was issued. 

But to sum up your truly relevant point, all you are really saying is that there is high default risk when you deal with people who have poor credit history or some other financial issues.