JV Plans to Buy Up Single-Family Homes in Orlando for Short-Term Rental Portfolio

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Two real estate companies have joined forces to build a short-term rental portfolio — with a twist. 

Instead of buying apartments or condos, the joint venture comprising Andes STR and WEG Capital has raised a $25 million fund to buy up single-family homes and then rent them out as vacation rentals on platforms such as Airbnb and VRBO

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The duo is eyeing the Orlando, Fla., area to begin their investment spree because of its year-round demand for Airbnb-style accommodations, according to the JV. They have not made any acquisitions yet, but Andes has been identifying possible properties, according to a spokesperson.

The median home price in Orlando was $399,000 in June, up 26.7 percent from the previous year, according to data from the National Association of Realtors.

“This fund demonstrates that investors want to invest in the asset class and find our turnkey solution, which leverages our award-winning technology, appealing,” Sebastian Rivas, CEO and founder of Andes STR, said in a statement. 

Austin, Tex.-based Andes STR is a property-management technology firm which specializes in making short-term rental properties easier to invest in by arranging financing, setting up legal and accounting services, and then managing the properties while the investors receive passive returns, according to the company. WEG Capital, based in Santiago, Chile, is a financial services, corporate finance advisory and asset management firm.

WEG Capital owns several apartment complexes in South Florida and Texas, as well as solar farms in Chile. 

Andes STR was founded in 2018 and plans to have up to $100 million in assets under management by the end of 2022, though it was not immediately clear how many properties it manages currently.

“Ever since beginning discussions with Andes in Q3 2021, we have been excited about the STR investment opportunity that we could provide to our existing, sophisticated client base,” Guillermo Arriagada, partner at WEG Capital, said in a statement. 

The JV plans to deploy the funds over the next year, with the investment expected to mature within five years, per a press release. Investors in the fund are currently real estate industry executives from North and South America and include the Andes STR founders and WEG Capital partners themselves.

Mark Hallum can be reached at mhallum@commercialobserver.com.