I’m assuming the goal is to have your REI Cashflow pay for and keep up with, or even improve your lifestyle, way before you retire.

I definitely over improve the properties and I am sure somethings can be left as is.

This allowed my clients to buy the duplex and then use the rental income to improve their financial standing, making it easier to qualify for future loans.

If it were $10k-$20k loss I'd probably just chalk it up as a learning experience and sell it, but I just don't know if I can stomach a $40k-$50k loss.

Hope I am wrong and the last owner got you some great quality tenants or that overall things have improved.   

The vacation rental certificate is similar to the City of Anna Maria and the City of Bradenton Beach; however, there are more documents and information required to be submitted, and the vacation rental unit and improvements must be inspected.

I'm not sure that would improve your position by taking the tax/penalty hit (not sure of your age) you would incur by withdrawing money from retirement. 

You cannot cut locks, you cannot take possession, you cannot set foot on the property, you cannot make any improvements.

Depreciation: Remember to depreciate the property and its improvements.2.

Another pitfall is under improving properties in low income areas believing that since its a depressed area in terms of income the people will not have high standards.