Cheap vs Moderate Priced SFH Buy and Hold Question

[Derek Merdzik]

Hey everyone, I am looking to get into SFH/Duplex rentals in the US, I have experience in Canada. I have am trying to fully understand the aspects and trade-offs of low value property buying and renting vs a higher value house that you can get a mortgage for.

For example a $20k house in Cleveland, OH that cash flows strongly, but will not appreciate in value and will likely depreciate.  Versus a $100k house in Columbus, OH that has weaker cash flow, but might appreciate or at least keep it's value and I can get a mortgage for. 

At these prices, the out of pocket cash is close to the same, so it's a cash flow vs capital appreciation question.  However once a Cleveland property gets a bit more expensive, say $35k with justifiably stronger cash flow, more cash is tied up.

I have two questions:

1. Are there ways to free up any portion of that cash tied up in a cheaper property for reuse?
2. What are your thoughts on cash flow vs capital appreciation, how do you factor each in?