Is it better to use 500k to buy houses all cash or leverage it to buy more expensive homes?

[Lisa Smith]

Hi, I am have some experience investing but not full time by any means. I was wondering if anyone had some advice regarding the following. As an example if someone has say 500k to invest (lets say in the Phoenix area but I am open to other areas like Las Vegas and California maybe even south Florida) would they be better off buying 10 houses for 50k each then renting them out and then doing a 75% cash refi (I am guessing you could pull that much out of each property) then reinvesting the refi money to buy 10 more houses? For a total of 20. Or would it be better to use the 500k to put 20% (or 50k) down on 10 houses that are worth 250k each and then try to refi those houses to buy 10 more houses that are lets say 100k each. I heard that it is tough to get conforming loans after the first 10. I've always been curious about what option most successful investors would pursue in term of trying to get high returns in a relatively safe way. Any markets to avoid? Any common sense things I am missing here?

Thank you for any ideas,

Lisa