I purchased my first house about 2 years ago and acquired roommates within the first 4 months.

I remember when I was in a similar spot, debating whether to leverage my first rental to acquire another property.

Most haven't taken their properties acquired through the BRRRR method full cycle and gone through the sale process you are experiencing.

Apparently you can do it with a "Crédito Multifunções" but there are some restrictions implemented by the Bank of Portugal: If the property was acquired less than 2y ago: This type of loan is limited to 80%-Loan To Cost (from what I understood rehab costs are not included).If the property was acquired more than 2y ago: This type of loan can be used until a max of 80%-Loan to value not limited to the acquisition cost.Let me know if you had different feedback. 

She’s for real estate (I think market is over inflated) but in the past we use it for rainy day fund vs holding $ for repairs as well as acquiring property via cash to rehab and sell.Regarding equity shares I would read the fine print as from what I have read you basically are selling your sole to those companies for a small payout to start but giving up a ton of equity

I've been researching this quite a bit and am looking into acquiring an STR that I would actively manage and would keep average stay at 7 days or less.

It reduces risk by lowering your leverage, and once one property is paid off, that cash flow can then help pay down others even quicker.A balanced approach might be to focus on acquiring a couple of properties initially while keeping some reserves, and then reassess based on how things are going.

If you know what you're doing it can be a good way to acquire discounted properties.

Also, are you going to acquire the properties by a hard money loan?

As far as how you move forward from this, if you are confident in the area and acquiring a new tenant that will treat the property better, you can view this incident as a sunk cost and move on that way.