He said that they purchased an asset with rents that have not increased in 5 years (can't remember exact amount).

I was able to work with them to get a 5% rent increase put in place within 2 months of closing.

My question is if it's always better to purchase properties in cheaper market where it takes less capital and the rent to price percentage is easier to get above 1% or if it's worth investing in a city like Denver where it's very hard to get the rent/price ratio over 1% but the cost of the real estate increases much quicker than it does in other less desirable places to live?

Overtime I imagine this will increase.

If you have the ability to do so, increase your earnest money deposit.  

Cash on cash before rent increases with newly minted leases is about 4 to 7% going in.

Landlords I spoke with, experienced no changes in rents but may have faced slight increases in vacancy.

Then most recently in Jan. 2018, I dove into E-myth Revisted, (of course) Ultimate Guide for beginners from BP, The Richest Man in Babylon and the Millionaire Real Estate Investor.

Debt is from a mortgage on our primary residence and student loans.I'm now in a situation to either reduce debt or increase my regular income (via paying cash for rentals/purchasing notes/something like that) to a point where my dti would be more attractive to lenders.

why not just increase the rents and let people leave on their own?