Your tenants are paying the debt payment, so if the place cash flows either way then it won't matter that much in the long run. 

Debt on home is 250k and property appraised approx 800k. 2 sons lived with him at property and sounds like they don’t work.

Long story short: credit score is around 760, about $20k gifted for down payment use only, and about $12000 in debt at an avg of 6.44%, which I'm actively working to pay off more than the min.

I like the debt structure and timeframe for the loan.

Once you know the rate range, see how high you can get the rate without blowing your debt to income ratio and how much lender credit you'll get for it instead of paying points.  

I will also have to say if you have poor spending habits or in debt to work on those areas.

Couple things.. do you have fixed rate debt?

We've used the cash flow from this property to pay off the debt we accrued on renovations and have been able to invest in 5 other properties in CA.

If I were to rent out both units I would get roughly $3800-$4000 monthly.I owe just under $450k on the mortgage with 3.125% (this is my only debt) and the property is valued at $670-$720k and I purchased for $470k.I am considering a few things which I feel will set me up for success in the future with the lifestyle I wantOptions:1.

I am completely debt free with umbrella policy.