Would I be able to knock down and build a new home and once I sale, I use proceeds to pay off the first bank? 

There is no worksheet out there that will tell you whether investment A will be better than Investment B without factoring in risk.Sponsors can inflate the 'projections' to however, they see fit. 

But I wondering how difficult is it to get a DSCR loan without experience building or buying rental properties.1.

I am going to build a house on it with cash and live in it.

Cash out Refi property located in Northern NJ, and hypothetical purchase mixed use or multi family apartment building located in Brooklyn most likely

Learn your market inside and out and build a team of people around you who can help you analyze deals and make moves.

The upside:  There is a lot of money to be made, potentially, and every door you add to your portfolio builds your company's value bigger and bigger (vs. sales, where it's a transaction and then it's over).

Original to the building?

It makes it easier (legally) to build an ADU and provide a means to rent it out or have family stay there.

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 = 1.23DSCR lenders generally let you vest either individually or as an LLC.