No perfect answer on this one as it will require some sort of sacrifice, just depends on what sacrifice you want to make.

Not easy money but worth the sacrifices in the end. 

Do you think it's better to refinance and sacrifice the cash flow in the rental to free up funding for more investing?

That's the sacrifice to run rental properties correctly. 

It takes some sacrifices; but it also takes some sacrifices to not have real estate or own rentals.... so you just choose your sacrifice!

Having said that, there might be a good reason why you take a much lower cash-on-cash return to purchase a property where you feel the stability of the area or future appreciation make it worth the sacrifice of CoC returns.

I'd have to sacrifice my cash flow or cheat my operating expenses, or both, in order to make 1% work.

And if you do, you are going to possibly sacrifice the value of the tenant that you get for the price that you're getting upfront, and if you're going to lose your tenant that you currently have then you risk the vacancy, having to do a rent turn, and that would come with more maintenance, and many additional costs that you would have To encumber that would most likely far exceed that $160 extra that you were trying to raise in the first place. vacancy means no money coming in, and then your investment is dead in the water.

That doesn't mean that we'll sacrifice to the point where we lose money, but we always remember that the deal has to work for everyone.

But willing to sacrifice another couple of years.