Pay cash for total price or take loan?

[Bruce Cash]

Hi there

Although I have been a landlord for three years, just recently I have given serious thought to get into real estate investment. I have a realtor who is an investor and seems to be very good at it. It seems there are two school of thoughts in investing for rental property

1- Pay cash or get loan as little as possible so investor has a good cash flow every month

2- Get loan as large as you can. Cash flow won't be large but keep the property and let tenant pays the mortgage. Then after sometime (10 years ???), sell it assuming property appreciates. 

I do not have a huge lump sump so really if want to pay cash, most likely I can afford one house (normal size/price). However, if I go with option 2 I can have multiple properties but there won't be any cash flow.  My realtor advocates the #1. 

I would like to have your comments on this subject and what would you consider a good investment for a beginner in Houston? 

thanks a bunch!