Quote from @Gaines Lydell: Great company!!

The owner wants to minimize the capital gains tax he pays so we want to suggest to him to do a master lease to us for "x" amount of time, and we pay his lease fee and hold the rest of the money in this time we will secure a loan to buy using the money we make as part of the down payment.

If you are not on title, then you are not taking a capital gain when the sale of this home occurs.

As OP said, hard to find umbrella that will cover STR papered insurance unless I find a carrier that writes it under my name personally and names the LLC as an additional insured (I own my properties under LLCs).  

Aim to purchase and renovate a property for resale, with the ultimate goal of acquiring additional income-generating rentals.

So they want to pay capital gains tax right away instead of letting it appreciate tax free?

Additionally, so far the economy has shown pretty strong resilience, with historically low unemployment rates.

If you want to capture additional short-term gains... probably best to just stay the course you are on. 

The buyer can decide how to use the additional space.

At first I thought it was great that I got paid out immediately, until I realized that the OTAs get to use that cash for their own liquidity and interest gains.