Curious if it could wind up cutting interest rates a tad due to decreased costs by the banks, or even provide better loan/financing products for investors or better terms.

At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices — and the bubble bursts."

., from what I can see, the first property is simply not that great of an investment unless you are able to either greatly decrease the purchase price or generate additional rental income/decrease monthly expenses.

You need to decrease the amount of your own cash invested to get a better return. 

So as you move up in rental price, the amount for repairs will become a decreasing percentage of the rent.Now as that applies to capex, certain capex items will be relatively fixed or fall within a small range like a water heater in @Ned Carey's example.  

Twenty-Five cents on the dollar that used to go towards paying off the original principal of your mortgage would instead go to the banks as pure profit. 25% of every mortgage payment in the country would go to the banksinstead of reducing the household debt of ordinary Canadians.And reducing the debt of ordinary Canadians is what the Government says they want and why they came out with this new Stress Test Rule that uses the Mythical Posted Mortgage Rate.Posted Mortgage Rates are a Rip Off used by the banks to penalize and trick Canadians and is now used by the Government to lower Government Backed Insured Mortgage Debt.This will not decrease ordinary overall Canadians debt.

For example, is it more new construction type of properties but which will lend to a renter-filled neighborhood which will decrease exit strategy options later?

If you buy the property cheaply enough, your cost of borrowing decreases, so maybe you should be looking at distressed multi-family properties instead of what's on the MLS and paying market value.

The problem I found with financing 100% is that it decreases your cash flow.

It seems if all costs associated with closing this deal were 4K, then we would save $1,200 up front, but our cash flow would decrease by approximately $20 a month.