I still have a mortgage on the primary of about $450K at a 3.8% rate.

Then use the extra roommate rent income to pay down your mortgage and look to refi to a lower payment in the future (3-5 years) - so it cashflow when you move out.You could also choose the smaller unit and STR the other unit to generate more cash to pay down your mortgage and refi, so it cashflows when you move out.Bottom line: you'll have to get creative to solve your cashflow challenge!

I'm no appraiser but have plenty of fix and flips as well as new construction but IMO, it will be existing home. 

Most lenders use FICO credit mortgage credit scores.

Excuse me It called note and mortgage in Ohio.

Is it better to have a mortgage on a rental or a primary? 

The quaility of old existing units, and the ability of the long term population to pay new rents, blended with an influx of small high end mill conversion units is simply not balanced.

But a realtor will not know these underlying lots exist and for sure wholesalers wont have a clue.

House hacking lets you live in one unit and rent out the others, which can help cover your mortgage and generate some extra income.

I've done deals like this where I've had the seller hold a small second, subordinated to the banks 1st position mortgage, with payments to the seller deferred until balloon payment which I make coterminous with the bank's mortgage.4.)