I'm struggling a little bit on deciding the best agreement to make sure I can get some cash flow, payback the HELOC, and not drive the new mortgage up too much with the Refi out of the HELOC.

The tax paid from your lending proceeds should be the equivalent of your tax rate I would think.

What about rate and term refinancing?

Refinancing will change your mortgage rate, and if it’s worse than your current rate, it’s not worth it unless you’re getting a great deal.

Loan Origination Systems (LOS): What works best for mortgage and private lending?

I've been looking at a lot of smaller towns around Cleveland, Ohio and have noticed there are a lot of seemingly decent cash flow properties, but more around the 1.5-1.8% rate.

I believe United FCU is best. 20% down, usually a 10yr term (they offer a longer term though), and an interest rate that's pretty close to the current average for conventional loans. 

If you're goal is a long term hold, you're almost certainly going to do well even with a market rate deal in any of those states.

I agree with the others here that say you need to have some skin in the game, if you are going to live there yourself, get an FHA loan rather than owner financing, you can get a 3.5% down loan, personally I do not love these as they require  PMI which is an additional expense, and you also need  bring additional funds for closing at least for taxes, title, attorney and transfer fees . borrowing from anyone else for the down payment, to include a personal loan from the bank is not a good idea, those again will be higher int. rate.

For all methods you would want to find a market that has strong employment rates, strong income rates for the market, and is a growing or an established market.