In the Denver area it was almost an entirely cash market--we once received payment of nearly $50k, in one hundred dollar bills, in recycled baby wipe tubs.

HML cuts into the savings associated with the cash offer.  

How did you come up with the down payment with each property?

I'd cut bait.A good HML is used to quick closings. 

For primary residences, lenders typically don't require PITI (Principal, Interest, Taxes, and Insurance) reserves beyond the down payment and closing costs.

Surprisingly, Craigslist yielded the best results as I found my first tenant whom has renewed twice already and has never been late or missed any payments.

And is there any path to a lower down payment using creative financing, or is 20% pretty much what it is? 

My tenant left without making a payment and upon inspecting the house I found a few damages to the property (like 3 doors need to be replaced ...etc).

In the context of rental properties, if you incur a net loss in a tax year, you can use that loss to offset other income you may have in that year, and if the loss exceeds your total income, you can carry the remaining loss forward to offset income in future years.The Tax Cuts and Jobs Act (TCJA) limits the deduction of net business losses for individuals, estates, and trusts to $250,000 ($500,000 for married filing jointly) for tax years 2018 through 2025.

If your looking at a SFR property, have good credit, and 5% down payment instead of 3.5% you may be able to get a better deal with a conventional loan.