Down payments: big or small?

[Gere W.]

What's a better strategy: 

1. Higher down payment: lower monthly mortgage cost, no pmi payments. This is generally 20%+ down. Good if you have the cash up front, but it's just that, you're losing that money up front. Better cash flow, more breathing room for expenses and other costs. Can only get cheaper properties based on how much you have cash on hand (as a newbie, I don't have $50,000 on hand for a down payment for example, but can do say $5,000 - $10,000). That leads to cheaper properties. 

2. Low down payment: higher monthly mortgage cost, pmi payments which don't contribute to paying down the loan at all-just wasted money basically. Generally 3-15% down depending on broker/lender. Great house hacking option. Can get a higher quality and higher cost property. 

What's generally a better way to go in the long term? 

Option 1 will cost more upfront, but be easier to mitigate month to month and boost cash flow and have more breathing room with monthly expenses. 

Option 2 is better in terms of investing (as little cash invested), but has lower cashflow, and you'll need more in reserves for expenses potentially. Also means vacancy will put a higher strain on you financially since mortgage payments will be higher. 

Thoughts and perspectives? It'd be greatly appreciated.