Most of us locals don't invest in vacation rentals and instead focus either investing in LTRs, managing for investors, or selling to retirees and investors. 99% of vacation rentals are owned by out-of-town investors looking for easy street.Give that some thought and look into property management fees, hospitality fees, occupancy rates, seasonality, flood zones, HOA fees, non-owner occupied property taxes, and the recession vulnerability of tourism-based markets.

My attorney disagrees with @Charlie MacPherson    and while there are certainly ways to violate the law, my attorney regularly closes wholesale transactions when properly executed.  

Additionally, I recently went to a Realtor-only panel held by my brokerage where we invited executives from out Metro Codes office to come and talk more about what's happening with STR's in the city as well as answer our questions and while there is a crackdown in residential neighborhoods/zoning, more and more developers are building projects with investors in mind (meaning full STR eligibility)!

It's helping me collect enough replacement value to execute the 1031.

The Millionaire Real Estate Investor by Gary Keller Written by a very successful real estate agent, investor, and brokerage executive, this book walks an aspiring investor through the necessary mindset required to succeed in real estate investing.

We were fortunate to be able to execute exactly as planned and within the prescribed timeframe.

The misconception comes from the execution and not the concept.

That contract is subject to inspection within so many days of the execution of the contract, then get in there with your buyer inspector. 

Perhaps receiving security deposit is a form of executing the lease. 

@Prashant ShethYou may only execute one 60-day/indirect rollover in a 12 month period.Since you did not actually return the prior funds and those are now considered a distribution, you have not used that one-time allowance.