The borrower gets the benefit of having access to capital fast and the lender gets the benefit of charging a higher interest rate and not having to pay taxes on the profit.

Quote from @Collin Hays: I suspect that the Smokies is your best choice, simply because it is a year-round destination. 

If you’re not able to, then it may be better to sell the condo, take the profit (if you have some equity in the condo) and put it into a multi-unit to househack again.

Since you missed the 2 out of 5 rule, capital gains taxes might take a chunk of your profits, so consulting a CPA would be smart to understand how much you’d actually keep.

And then also do you typically repay each partner their upfront costs from the profits before then distributing profits?

The only time I'd say it's an okay idea is if either: The area you're investing in is expecting so much appreciation that you will easily profit off that (watch out for mortgage interest though...the appreciation needs to be higher than what you pay in that and expenses to make it profitable)You have some specific reason for wanting to do it- family ties, future home, major long-term hold, etc.Maybe I'm forgetting another one, but those two are all I have for now...

The price you pay for being part of the Disney World spoon-feed of guests is that the barrier to entry for profitable STRs (ones that leverage close to or max LTV) is very, very high.  

It's a long-term learning process, but an interesting and often profitable journey - best of luck to you!

Time allows for adjustments, scaling, and reinvestment in ways that short-term projects simply can’t achieve. 

It's probably unlikely anything too bad would happen excluding natural catastrophes but why take the risk if the profit potential isn't there?