So then the house is 10% owned by The Person, and 90% owned by The LLC (income and expenses shared accordingly).Now this year say I want to take the same percentage (10%) - and say it's a flat market and the house is still appraised at $500,000.  

Really important to do the market research, check for liens, and get eyes on it before waving that paddle at an auction. 

I am not new in RE (Own 2 (condo+townhome) +primary home) and all units are in San Diego and know want to buy something near beach and been in Imperial Beach lot of times love the place :)Any guidance how should i approach?

The American market isn't strictly RE driven. 

We spent four years in a duplex, maintaining it in our rental portfolio as we transitioned to another house hack residence with an additional accessory dwelling unit-type house next door.Navigating the intricacies of FHA loans in competitive real estate markets can be daunting, given stringent home requirements and more complex processes.

I suggest talking with @Connor Gillen who has a strong grasp of the market up there

You cannot use "short term rental income" to qualify on the subject property BUT you can use 75% of the appraiser's rent valuation on the 1007 market rent schedule.

Evening from Alaska, My business partner and I are new to real estate investing and trying to get our first deal going in a high-interest rate market.

The value adds and the market appreciation profits pale the cash flow (this is even with a duplex that cash flows over $5K/month).

Get rid of the short term mentality that is the cornerstone of wholesale approaches too.