Investment property - lower interest rate or lower down payment

[Peter Amendola]

Hey everyone! I have a mortgage philosophy question for short term rentals. My wife and I are looking to purchase an AirBnB STR and have two options (below):

1) Purchase price = 480k, down payment = 20% (96k), interest rate = 3.875%, monthly mortgage = $1805, total interest for 30 year loan = $266k  

1) Purchase price = 480k, down payment = 25% (120k), interest rate = 3.25%, monthly mortgage = $1567, total interest for 30 year loan = $204k

So....I like the fact that option 1 requires a lower down payment (24k) out of pocket but I would be paying an additional 60k in interest for the life of the loan. We would prefer to not borrow money and have 200k in our HELOC available. If our ultimate goal is to buy multiple properties to live off the cash flow, is it more prudent to go with option 1 because it's 24k more buying power for future properties?

Side question......If our goal was to accumulate long term rentals as opposed to STR's, would the philosophy change?

Thank you in advance!

Peter