Many times if an investor wants to purchase a short-term rental property in a vacation market, their goal is to earn income, but also have a property for their own use in a place they would like to visit and/or build equity on a property they would like to retire in someday.  

Please note that the account into which the funds are deposited must be the same type of account from which the funds were first withdrawn (e.g. withdrawal of pre-tax funds from a 401k could be deposited in a pre-tax IRA but not a Roth IRA - "like to like").3) If you are self-employed (i.e. active self-employment earned income separate from your w-2 income) with no full-time w-2 employees, you can set up a Solo 401k and then rollover your 401k funds from your former employer 401k and/or non-Roth IRA.You could then take a loan of up to 50% of the balance not to exceed $50,000.

I have no idea how much they earned but I seem to remember he only had about ten guests over the entire summer, so it probably wasn't a ton.

I would be hesitant about putting your hard-earned retirement funds on the line until you have a solid understanding of the process and are confident in your abilities as an investor.

Run the numbers and see which option would earn you more money in the next 5 years.

@Brendan Conners Sorry, I am not good with tagging and such, but check the post I made above that discusses rental's as more dynamic options where you can do more with them to make situations better for yourself and ways in which you can be creative with them to make rentals highly profitable and combo to add increased value to your properties equity all the while earning higher cash flow then you would otherwise think you could

You can have him as a limited partner with designated and specified returns and equity portion such as 20% so he would earn 20% net profit from the entire pie with quarterly distributions and resale profits whenever that happens.

Why let the IRS hold that money and you earn nothing on it.

The way I think about money and my various businesses, is, 'could this money be earning more elsewhere?'.

All of your income earned in a specific state will be taxed by state, then your home state should provide a credit paid for that tax amount.