If you find a Duplex or greater for under $250K and with rents common to the market at or above $1200 a door then you have some cash flow. 

I'd keep the rental and by no means refinance it to take cash out. 

Possibly some questions to ask yourself: How much higher is the cash flow in Akron?

The modest cash flow could be reinvested, eventually allowing me to build a portfolio of income-generating properties.I recognize your point about needing $2.5M–$3M in cash to consistently replace a six-figure income.

He collects cash down payment and finances the rest.

It is going to be near impossible to cash flow on a property with 100% financing, especially if that partners rates are above conventional rates.

You are missing my point on taxes.Scenario 1:  Your partner buys the house at the same time you put your cash in.  

Sadly, it seems that cash flow on long term rentals with 20% down just does not exist in most desirable locations.

If I have some cash do you recommend clearing the loan or invest instead for next property with proper planning ? 

I have enough liquid money for the down payment for the hard money lender, but that'll leave me with zero cash for closing costs, realtor fees, etc.