Creative Financing 101: Using Partnerships, Seller Financing, and BRRRR for STRs

Buying a short-term rental (STR) can feel like trying to climb a mountain with no rope — especially when traditional lending options don’t quite fit. Maybe you’re short on capital, your debt-to-income ratio is tapped out, or you just want to move faster than the banks allow.

Good news: creative financing is the secret weapon of savvy STR investors. It’s how people with limited funds buy multiple properties, how partners turn side hustles into full-time income, and how experienced hosts unlock six-figure portfolios in 12 months or less.

Let’s break down three of the most powerful creative financing strategies for STRs — Partnerships, Seller Financing, and the classic BRRRR method — and how to use them like a pro.

1. Partnerships: Turn Relationships into Real Estate

What It Is:

A partnership is when two or more people come together to fund, operate, and profit from a short-term rental. You split the roles, the responsibilities, and — of course — the returns.

Why It Works for STRs:

Many people want to invest in Airbnbs… but they don’t want to manage guests or clean toilets. That’s your opportunity.

If you’re the operator, bring the know-how and sweat equity.
If you’re the capital partner, bring the funding and enjoy mostly passive income.

Common Partnership Structures:

• 50/50 Equity Split – You manage everything, they fund the deal.
• Equity + Preferred Return – Partner gets their investment back first with a return (e.g. 8%), then profits are split.
• LLC Ownership – You both create an LLC to buy the property, outlining responsibilities and distributions in an operating agreement.

Tips for Success:

• Use LegalZoom or a real estate attorney to draft a partnership agreement.
• Clearly define exit strategies (refi, sale, buyout).
• Track income and expenses transparently — software like Stessa or Airbnb Pro Tools can help.

💡 Pro Move: Want to bring value but no capital? Partner with a high-income W2 earner who wants the STR tax benefits. You do the work; they get the write-offs.

2. Seller Financing: Skip the Bank, Strike a Deal

What It Is:

In seller financing (aka owner financing), the current owner of the property becomes the bank. You make monthly payments directly to them instead of a lender.

Why It Works for STRs:

• You avoid bank underwriting
• Faster closes (as little as 7 days)
• Creative terms like interest-only or no down payment

A Real-World Example:

You’re eyeing a $500K cottage in Palm Coast. The owner owns it free and clear and is open to terms. You agree to:

• Down Payment: $50K
• Loan Amount: $450K
• Interest: 6.5%
• Term: 5 years, interest-only
• Balloon Payment: $450K due in year 5

You cash flow from Day 1, refinance or sell in 5 years, and avoid ever dealing with a bank.

Seller Financing Tips:

• Use a title company or real estate attorney to formalize everything.
• Get everything in writing — especially default terms, payment schedule, and balloon details.
• Always confirm there’s no existing mortgage unless the seller is using a wraparound mortgage (advanced stuff — check legal risks first).

🔗 Need help finding seller-financed STRs? We cover them weekly in the Deal Room newsletter.

3. BRRRR for STRs: Build Wealth on Repeat

What It Is:

The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) is a classic wealth-building play. Traditionally used for long-term rentals, it works beautifully with STRs too — if done right.

How It Works:

1. Buy a property below market value (often distressed or outdated).
2. Rehab it to STR standards (design, furnishings, systems).
3. Rent it on Airbnb/VRBO and build income history.
4. Refinance based on new appraisal and income.
5. Repeat using the cash-out refi proceeds.

STR-Specific Example:

• Purchase: $300,000
• Rehab + Furnishings: $50,000
• All-in Cost: $350,000
• New Appraised Value (post-design and bookings): $425,000
• Refi Loan at 75% LTV: $318,750
• You recoup nearly all your initial investment.

BRRRR Tips for STRs:

• Choose markets with strong STR demand and low rehab-to-value ratios (Northeast Florida is prime).
• Use a tool like AirDNA to forecast post-rehab rental income.
• Document all income and expenses to support the refinance appraisal.

Watch out for:

• Prepayment penalties on initial loans
• Appraisers who undervalue STR income
• Rehab timelines that delay cash flow

💡 Expert Tip: Pair BRRRR with a DSCR loan to avoid needing tax returns during refi. Lenders will look at your Airbnb income instead.

Which Strategy Is Right for You?

The truth: Many of the best investors use all three strategies — at different stages of their journey.

Final Thoughts: The Path to Creative Wealth

Creative financing isn’t just about getting clever. It’s about playing chess while others play checkers.

By using other people’s capital, owner flexibility, and value-add strategies, you can grow your STR portfolio faster — without over-leveraging or relying on cookie-cutter bank loans.

So next time someone says they “can’t afford to buy an Airbnb,” send them this article. Then send them a listing from Deal Room.

Ready to Find Your Next Deal?

We help STR investors structure creative deals every week. Whether you’re looking for a seller-financed opportunity or want help modeling a partnership split — we’ve got you.

👉 Get the Deal Room newsletter for underwritten STRs, creative financing examples, and tax tips — twice a month.

👉 Schedule a 15-min consult and we’ll help you reverse-engineer a creative funding plan.