Working on Buying STR's this year - Need Lending/Deal advice

[Kyle Flynn]

Hello everyone,

Two things.

1ST THING:

I am currently looking to buy a STR in the north GA area, and I am the sweat equity investor. I have a meeting Monday to discuss with the capital investor how the deal will be structured, and could use some insight. Currently this is what I envision for the structure of the deal:

EQUITY SPLIT: Capital Investor gets 100% of his down payment, and then we split equity 50/50 from there.

CASH FLOW SPLIT: Totally unsure as to what is/isn't fair but seeing as the market rate for airbnb management is already 20-30+% and I am bringing the deal to the table I feel as though 50/50 cash split wouldn't be an insane request.

SELLING: Upon one of us wanting to sell out the other would have an option to buy out the other partner's equity, and if unable or unwilling to do so we must sell the property. I would want to put in a time constraint on this such as a year.

ROLES: Capital investor invests the down payment/closing costs/money for furnishing if needed, and then is completely hands off. I will manage the property in its entirety.


2ND THING:

I would LOVE to get some insight on how to find more investors with capital, as I only have one connection with capital right now. They would only be able to fund one deal though, and I am looking to complete two more deals this year at a minimum.

Thank you for taking the time to read my post. Any advice/insight would be greatly appreciated.

[John Underwood]

Quote from @Kyle Flynn:

Hello everyone,

Two things.

1ST THING:

I am currently looking to buy a STR in the north GA area, and I am the sweat equity investor. I have a meeting Monday to discuss with the capital investor how the deal will be structured, and could use some insight. Currently this is what I envision for the structure of the deal:

EQUITY SPLIT: Capital Investor gets 100% of his down payment, and then we split equity 50/50 from there.

CASH FLOW SPLIT: Totally unsure as to what is/isn't fair but seeing as the market rate for airbnb management is already 20-30+% and I am bringing the deal to the table I feel as though 50/50 cash split wouldn't be an insane request.

SELLING: Upon one of us wanting to sell out the other would have an option to buy out the other partner's equity, and if unable or unwilling to do so we must sell the property. I would want to put in a time constraint on this such as a year.

ROLES: Capital investor invests the down payment/closing costs/money for furnishing if needed, and then is completely hands off. I will manage the property in its entirety.


2ND THING:

I would LOVE to get some insight on how to find more investors with capital, as I only have one connection with capital right now. They would only be able to fund one deal though, and I am looking to complete two more deals this year at a minimum.

Thank you for taking the time to read my post. Any advice/insight would be greatly appreciated.

Since Equity split is 50/50 I would say 50/50 split on earnings is reasonable. 

Put each of you has 1st right of refusal to buy out other partner in deed or operating agreement.

Once your lending partner is paid back his down payment would he do another STR?