My recommendation is you talk to a lender on how much cash you will need. 

The obvious play would be for the low purchase price/cash flow. 

Local market rents are between $1400 and $1900 /mo within 2 mile radius.Two of the homes are 3 bed, 1 bath, appx 1230 sq ft, same rents as above.Each home is worth appx $265,000.

Purchase price: $182,250 Cash invested: $73,000- Residential area that is close to University of Rochester- Spent $20K in renovation of the aged unit and increased the rent from $750 to $1,450. 

For cash flow, Cleveland and Dayton are excellent choices, offering cash flow around 10-18%.

Purchase price: $24,000 Cash invested: $100,000 Beautiful remodel currently on the market in Augusta GA, perfect for rental portfolio.

For my first property, is it A: better to pay cash and see how it cash flows or always use loans and save money for down payment and other investments?

I've now repaid her the downpayment and want to Cash Out Refi for investment purposes.

Usually, I buy with cash.

My offers are getting beat by folks who have some magically optimistic pro form apparently and it's not worth jumping in for sub par returns and tenant headaches (or PM headaches).