then the entire balance is due in usually 6 or 12 months.

I generally recommend a balanced approach: prioritize a solid foundation by paying down some principal while strategically acquiring new properties using savings and cash flow.

I like areas that are balanced between appreciation and not too tenant friendly.

In the year that the investment property is sold, should the cash flows include not only the cash inflow from the sale of the property but also a cash outflow equal to the mortgage balance on the Balance Sheet at the time?

Like Robin said, you could stumble on a bridge lender that will give you a ton of proceeds in mortgage, but that runs its own risks.If you want the conservative, but open to lending to your LLC with outside investors, get on Fannie Mae's website and look up the small balance brokers.  

Sacramento metro offers a really nice balance between cashflow opportunity and consistent appreciation (due to the fact that it is a State Capitol, two major universities, and one of the fastest growing cities in the country every year for a decade+)I personally only invest my capital here in Sacramento, although I do business in a number of cities.

If your plan allows - you may be able to take a loan FROM your 401k; the loan is limited to 50% of the balance, or $50, whichever is less, and must be repaid over a period of 5 years. 

And to maintain that balance throughout your REI quest.If not, 1.

So I’m okay with a bit of balance, and it probably makes for better property value appreciation. 

Is a balance between appreciation and cash flow what you're after?