Low vacancy rates, rising rents, and high tenant demand for more space/good school districts. 

A family needs a washer and dryer in the house, if you don't add I think you'll take a hit on rent and take longer when there's a vacancy. 

Is it best to just throw cash flow at the loan untill the principal is paid off (current cash flow between the two properties after interest and all expenses are paid plus vacancy rate = about $250 left monthly) refinance at renewal to pay it back in full? 

That does not include any expenses, vacancy, etc.similar rent minus PITI does not equal cash flow.  

From what I am told, hoping the next few weeks really pick up and I can get my vacancies rented.

Not likely), vacancy (@ 8% for me), and a possible PM (10% normally).I recommend you reach out to a local seasoned investor and have them run your #s with you, as the #s depend on how you manage it (how hands on you are) and also local pricing.

In its current state:Current NOI: $79,058 (based on 80% occupancy).Current Cap Rate (at $1.25M): 6.32%, reflecting the property’s as-is performance.Value at a 7.5% Cap Rate (Market): $1.05M, based on current NOI.Given the renovations, vacancies, and risks tied to stabilizing the property, I’m considering offering $850K to reflect its current state and value-add potential.

My suggestion would be to buy a place to be a mid term rental and experiment with short term during the vacancy gaps. 

Accounting for 10% management, 5% vacancy (2 year lease locked in on tenant that has been there 2 years already..) 10% cap ex, and 5% maintenance.

It will help you adjust your pricing to improve your vacancy rate. 8.