Save up more (not just the down payment) and pay cash for properties? 

I also don't think I have enough cash saved to do a renovation.

Read the  Ultimate Beginner's Guide and then How to Invest In Real Estate. 

If not, what should I plan for as far as saving up?

Cleveland is very different from Australia which I assume you have already noticed. 1st thing you should do is get a lay of the land around here by checking out The Ultimate Guide to Grading Cleveland Neighborhoods.

I had no money saved and an opportunity to purchase a house on land that had been in my wife’s family for more than 5 generations.

It might cost you a little but it could save you a bundle down the road. 

I think that would be a good idea, since the real obstacle for me is getting the savings for a down payment setup.

I'm a big believer in Diy, but you need to balance the savings of diy with the cost of holding the property.

If they don't qualify for a loan due to bad credit or lack of a down payment when they start renting the house, they will have a hard time saving up the necessary money and repairing their credit in the 2-3 years during an option period.