Does anyone have experience with structuring a STR joint venture or partnership?

Question

Does anyone have experience with structuring a joint venture or partnership in the Poconos area?

Context: I am an investor with a portfolio of STRs in the Poconos but I can’t run the daily management of rehabs and property management. I wonder what your experience is with partnerships where one party brings the capital to the table and the other party the work/time. Looking forward to hearing about your experience, pros and cons.

Andrew Steffens · Answer

I do not have any experience in Pocono market but I do have partners on some STR's I own.  A variety of ways you can structure with who is on title etc but have a simple, solid, attorney prepared operating agreement that clearly lays out roles, responsibilities, and compensation and you should be fine.  Make sure to cover things like what happens when one party may want to sell or cash out etc.

Alesandro Breguez · Answer

Thanks Account Closed, what is the typical split structure you are used to?

Let's assume the funding partner brings all capital (downpayment, financing costs, rehab materials) while operations partner the work (rehab including labor, property management etc)

Frank Barletta · Answer

I agree with you, mostly, but OP said "I am an investor with a portfolio of STRs in the Poconos, but I can’t run the daily management of rehabs and property management" so that read to be like it would be the best route vs. JD/Partnership/Co-Host unless OP is looking for a sponsor to handle everything.

Michael Baum · Answer

Now hold on a sec there @Frank Barletta. :)  I am not a big fan of property management for a small number of STRs. I think they have their place but for a lot of us, doing it yourself makes a lot of sense.

Now co-hosters are different than a full PM. Much less cost and it sounds like @Alesandro Breguez needs someone to interact with various folks like guests and cleaners. Not necessarily a full hands off type of thing.

John C. · Answer

@Alesandro Breguez I am local and own 150 apartments. I'd be interesting in partnering and doing the management.

Sarah Kensinger · Answer

Oh no, the right one's care and we care a lot! It can be a struggle to find a good company but they're still around!

Alesandro Breguez · Answer

@Sarah Kensinger, the conflict of interest in hiring a company to do it as they wouldn't care about the profitability of the deal. Thats the reason that profit-sharing partnerships provide an incentive for the operating partner to stay within budget and timelines

Does anyone have experience with structuring a STR joint venture or partnership?

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