I know it seems difficult to turn down the potential income from this lease, but be patient, renting season is just around the corner.

The second option is to sell and house-hack a fourplex, which offers more units, higher potential cash flow, leverage equity, and appreciation potential.

Hard to give up such a low mortgage rate, but in the end that's small potatoes compared to potential OOS problems.  

Talk to residents, potential buyers and renters to see what their thoughts are regarding home values in the areas. 

What markets get you closer to your goals and harmonize with your time, energy, and resources? 

They tell you that they "cherry pick" potential clients, but belive it or not they don't!

I’m not sure how much upside potential they have.

If properties in that area tend to appreciate more slowly, especially if you can't start renovations immediately, you may sit on that investment watching potential profits get eaten away at slowly as inflation passes appreciation. 

@Jordan Kaylor, financing aside, how are you going about sourcing potential deals?

BRRRR with a bang: If you can pull this off, the value-add potential is huge.