They took 3 months to file for the permits despite having all my paperwork in less than two weeks.

There's also a detached two-car garage and workshop.It exists in kind of a twilight zone between commercial and residential. 

Includes a single family home (4 br) which was divided in two sections one of which is being rented.

Can you then decide to list and sell the house two months later...yes.

Selling would likely trigger capital gains taxes (unless you lived in the property for two out of the last five years or use a 1031 exchange).

Half a lot and two bedrooms.

I was told that I have to use the lease value * 0.75 until there are two years of rental income.

or needs to be in two places across the state from one another?

The property, though is not beach front, nor does it has ocean view, is just a short drive from some of the best beaches in the west, which are great for surfing, snorkeling, SCUBA diving.In the 1.21 acres there is a main single family home (4 br) which was divided in two sections one of which is being rented.

I do long-term room rentals (min 1 month lease).