Check the local regulations.  

In the city of Orlando the STR regulations are pretty restrictive.

This is regulated by Fannie Mae, and you need all purchase and rehab costs due at sale, on the settlement statement, and held in escrow to be paid to the contractors directly.

@Daniel KarbownikAs @Brian Burke elegantly put it, you must work with US securities attorney to be ensure compliance with SEC regulations.

That's the part I'd be concerned with.I can't speak intelligently about why some HMLs require the title to be in an LLC but speculate that it has to do something with lending regulations and being a commercial lender?

I don't think there's any state or city regulations but it's strictly between you and the property management company.

You may also want to consider any local regulations or restrictions on short term rentals, as these can vary by city and state.In addition to demand and regulations, it's important to carefully evaluate the financial viability of any potential investment.

The lending environment is shifting and difficult to predict, even if rates level out during that period.

., but even I would be very wary about pursuing a deal as advanced as the one you describe (because it would require a LOT of expertise that I don't have).Do you have a lot of expertise in real estate and business contracts, investment contracts and syndication, RE law, and local/state zoning and business regulations? 

This way, we continue to have cash flow coming in, and if we happen to have a bad contractor or one or two units and/or some permit/regulation related issues, the scale of the damage won't be too overwhelming.