If you prefer to maintain liquidity and have the potential to handle multiple projects, HML might be the way to go. 

I've purchased for that amount and they turned out to be good notes.I liquidated my RothIRA for a SDIRA Roth account in order to invest and continue to contribute.

If you prefer more liquidity, using cash flow to build savings may be a prudent choice.

If you decide to entertain this, due diligence will involve digging deep into the business financials to understand cashflow, solvency, and liquidity, his personal finances, and searching for any liens or UCCs in place. 

I was wondering if I am in this situation again, can I pay cash (I have the liquidity) and then refinance after closing?

I'm leaning more towards flips for my first few deals just to help create more liquid cash in my account.

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If we fix them up, they're pretty liquid at FMV.  

A cheap way to stay liquid and ready to take advantage of opportunities. 

Also keep in mind most investors have limited liquidity in the accounts and its not worth the pursuit by opposing counsel.