I should be able to get traditional financing.  

I currently own one SFH rental that was previously my primary residence.

A more traditional way is go to smaller community banks.

I am looking for some advice and/or opinions about selling my current primary residence or renting it out.

If you already have a mortgage on your primary residence, start with that lender.

Investment properties go on schedule E of tax return and that is not affected by this.This will affect home buyers buying property as primary or second home.

However, I learned that if I convert this one to rental house, the cost basis has to be the purchase price instead of the market price at this moment. which means if I convert the house this year and sell it in a few years, the 100k appreciation happened when I was using it as primary residence is taxable. 1031 is an option but what if I need the sales proceeds for other purpose?

My path has been to buy a primary, live in it for a few years then rent it out.

Home Base is the tricky one and our primary focus, we are interested in establishing a bona fide farm with value-added products.

The question is if because it has large principle component would it change the way it looked at by the IRS vs traditional P&I Sellers financing.