I agree, its easy to say oh I want cash flow, but ultimately, most of the gains are made with appreciation and principal paydown over long periods of time. 

Its hard to do return on investment since we are getting principal back starting year two as we sell..

Principal buy down that occurs with each payment met.3.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

I would like to have lower monthly payments should I make a big lump sum payment towards my principals and ask my mortgage company to adjust it or refinance it or which one is the best ? 

If you are still negative cash flow and can stomach it, then focus on appreciation and principal pay down.Good luck!

Home mortgage is $3700/month and $500/month extra payment towards the principal.

Also, it's likely that a slightly smaller amount of each payment will go toward principal since the loan balance is higher and the rates are likely nearly the same once the MI of 0.5% is added to the rate.

that will not cash flow - you won't be generating "cash flow" from the property that will go beyond servicing the debt and allow you to pay down any principal. 

For example if you sold on year 1 on a 5 year prepayment penalty, the lender would hit you with 5% of the principal balance.