Sure, in theory, the strategy this investor used might sound clever, but it’s also incredibly risky to rely solely on the compliance of a borrower—especially when they might not fully understand the terms or simply can't agree due to their personal situation.I have tons of ideas that might look good on paper, but I don’t pursue them because I assess the real risks involved.

Are you charging me for linens? 

.), Designing and Furnishing (amenities, design, theme, linens, etc), and operating (Insurance, Property management or self-management, Tech & Tools, Cleaners & handy people, etc)All of these could be covered depending on who you work with that can cover each topic. 

Also, depends on whether they include laundry services, linen services, amenities etc. 

Misc being replacing kitchen items, linens, etc etc. 

The 10% is probably for ordering items and being there when goods arrive, unboxing and removal of packing materials, assembling any furniture that needs it, placement and moving things around, putting up artwork, and washing new plates, silverware, cooking pans, coffee carafe, prewashing all sheets, towels, and linens etc. 

Finally a LTR furnished is often furniture only, no furnishings, no dishes, no linens or towels, while a MTR would most often include the same furnishing as a STR.  

Getting a good handle on those are hard if you have no experience.Think of it like any other rental but calculate out what your food, linen, housekeeping, front desk, upkeep costs are just like any other expense. 

For it to only be on new construction is pretty clever. 

The safest bet is to try to get a variance from Union City. though clever, your combined unit lease agreement would likely cause trouble if ever scrutinized by the Tenants or the municipality.