Both of these scenarios can produce an above average cap rate and may look good on paper but could be a costly mistake.  

Well we sold the houses we had and bought many more profit producing rentals elsewhere.

But I typically don't even do that because tenants that renew tend to be good renters that produce little risk, so there's less need of a large deposit.

As most rental real estate produces a tax loss, most taxpayers do not receive a benefit for these expenses, which are suspended under 280A and carried forward until you either have taxable income from the property to absorb them or you dispose of the property and lose them. 

The cash-flow has multiple variations as well, some markets below 800k today *can* still produce a little bit of cash-flow with DSCR around 1.1x when you have 70-75% LTV.I did many backtesting, the best IRR from a historical perspective is created actually in the C market that's getting better over a long period of time.Why do you think so?

I'm biased, but I think you sound like you have a whole journey ahead of you, and turn-key to me is more attractive for older investors with large 401k's or annuity funds that are looking to move their money into cash producing assets, without any of the work. 

The fundamental value in David Green's book on long distance investing lies in the fact that not all markets are created equal for all purposes.You may do well to invest in Denver as efficiently as you can, and then plow some money into linear or hybrid markets throughout the country that gladly produce a near 1% Rent to Value ratio.

And good advice on the oily rags- the drying agent chemicals in wood finish oils produce an exothermic reaction (they give off heat).  

For example 61 of them in cleveland that has a strong rental market and could produce upwards of 14%cap rate? 

more $$, more competition as well.But like almost everything else, it's the 80/20 rule. 80% of the business are done by 20% of the top producers.