This also leads owners to ASSUME simpler is better when it comes to management contracts.

Sure you can find better deals, but that is the common one I see.There will be times when the market is great and sometimes when it is down, but very hard to time. 

What do you guys consider to be a better option?

Should I try to save more money and improve my credit for a better rate or try to get creative financing for my possible investment.

I see value in both, but I'm unsure which is the better option.

Long term your numbers will look much better.

I always think communication and cooperation are MUCH MUCH better than going to court to try to enforce anything.

And is it better to be cash flow positive vs have more cash in hands ? 

However, if I choose 1-2 miles radius (approximately $365K) , it's much better.

But it’s better to ask them up front (like you did) before you waste your time applying if it’s not going to be for an approved use.Also, if you’re just not sure what you’ll do with the funds, you can always say the purposes is “for cash reserves”.