Hard to beat the 5.5% on the new construction but you will be cash flow negative.

But depending on when you bought your house and your mortgage rate, it might be possible to convert it into an STR with enough cash flow to more than cover the cost of renting another dwelling as your new primary residence. 

We both have cash reserves, my partner does have more liquidity than me being a property owner for quite sometime and having access to it's equity.

Are there cash reserves?  

Is it worth pursuing lower priced housing and rehabbing for a buy and hold in the pursuit of better cash-flow, or is it just too risky?

You’re probably cash flow negative on your current property and then have to pay rent in the new city.

Purchase price: $900,000 Cash invested: $240,000 Sale price: $1,520,000 Was driving by home this time last year and saw a FSBO sign.

Would you happen to know what I can do to get some more cash and finish this project? 

When interest rates are peak high I started my first investment and was able to cash flow !!

If you really want to get to cash flow much sooner, start learning to do things yourself.