A common strategy I see with diversification exchanges, is that the investor will purchase the first property cash and the second with a mortgage.

Simple answer - yes you can alter your funding source after putting it under agreement if you chose to use a hard money lender instead - i would just communicate with seller that hey I was going to use cash (assuming you have it from your heloc) and instead will finance some of it but let them know its not contingent on financing.

They all cash flow and are easy to manage (so far).

Even the funding alone is easier since you now have a cash flowing property that can help you fund your seed money faster. 

Just ask the owner what are you going to do with the money if you sell for cash??

that's $100K+ in cash PLUS a solid plan to achieve for that return. 

While at the same time taking a chunk of cash.  

Purchase price: $90,000 Cash invested: $60,000 Buy and hold that I still have to this date.

Purchase price: $169,000 Cash invested: $35,000 Looking to put 70K into the separate garage to make a 730Sqft home.

As far as credit, you would want a score above 680 ideally to get the highest loan to value on a cash out refinance, but I would aim higher at 720+ as that comes with a significant rate drop.