If you want a legitimate preapproval then you should be doing a tri-merge "hard" pull.  

(Unless it was a rental, then you have to pay depreciation recapture as well, usually at 25%.) 

That rate will be lowered further to 40% in 2025, and 20% in 2026.

That also needs to be insured and has a monthly lease payment.

Without knowing all of your specifics, I'd say that it's only worth holding on to if you can reasonably expect to have some really good appreciation in the near future (like 5 yrs)....Or, in the case where it would run well as a vacation rental, you could switch the usage, maybe?

If the house is funky, it will be funky after you fix it up..

Locations that are a 0-1 hour car ride from san juan to a nice town/city with more affordable areas walking distance to the beach would be interesting as well. 

All well and good.

You can refinance into a FHA 203k or like @Jason Wray mentioned you could even use a Fannie May homestyle renovation loan as well!  

These homes are what most people picture as “home” and lend themselves well to coliving strategies.