Not only is the city government making it harder for new STRs to get permitted, they're passing regulations and zoning laws that can/will eventually strip existing STRs of their ability to operate as STRs.  

What if a Single-member LLC operates like a business(Contracts are in the business name, bank account is in the business name, no co-mingling of funds).

We are currently renting a building for business operations.

I started and operate one of the largest property management companies in Portland and Vancouver.

My wife and I operate a short term rental property management business (TrustBNB) with 20+ properties in Philadelphia and New Jersey.

Real Estate usually beats the stock market once you factor in "leverage" which is exactly what you are doing by getting the property financed.That's a long-winded way of saying put as little down on the property as possible while still making sure it comfortably has positive cash-flow.Here are 2 scenarios assuming you can buy at $285K1. 20% down @ 4% interestDown payment = $57KNet Operating Income = $1620 per month (per the screen shot you posted)Debt Service = $1400 a month including taxes and insuranceCashflow = $220 per monthCash on Cash Return = 4.6%2. 10% down @ 4% interestDown payment = $28KNet Operating Income = $1620 per month (per the screen shot you posted)Debt Service = $1662 a month including taxes and insuranceCashflow = -$40 per monthCash on Cash Return = 0%After running these numbers the triplex doesn't really look like such a great investment to me.

You will also need an operating agreement and EIN number.  

@Mindy Jensen It's funny how different states operate so differently. 

In short:One partner is your 401k and the other partner is the other investor.This could be accomplished via an LLC (i.e. one member is your 401k and the other member is the other investor).This means that partnership will have to file partnership tax returns (1065 at the federal level) and issue k-1's to the partners (e.g. one would be issued to your 401k under the ein of the 401k).The terms of the agreement (including the payment flows you mention) would be negotiated and documented in the operating agreement where you sign as the trustee of the 401k.The standard rules regarding investing in real estate apply (i.e. you can't use the property for personal use, you can't work on the property, etc.). 

Example...through my network of agent contacts, I recently came across a portfolio of 400+ SFR, MFR, and commercial units in "nowhere" OH that a mom and pop operator had built up over the course of 3 decades.