By borrowing at a rate that is lower than the property generates with all cash, you are leveraging other peoples money.

I used to live in DMV as well before I moved to NY, I live in Queens area NY and I am doing REI, I have a great money machine with no hassle property in Winchester NY, No need and repair and there are a good tenants who are already living there so there is no more money or time you need to invest aster you bought it, just start collecting money....Right now it is generating 12K+ a month.

@Emily Refi checking back in with the post, I've gotten in contact with local lenders and they are all telling me the same things which leads me to believe finding the right lender with good financials as @Ned Carey mentioned will be most important.

What about some of the other leading indicators in your local markets?

One of the Atlanta area gurus  always preached borrowing as much as possible in the years leading up to 2007 crash.

We just had a young lady claiming to be able to generate 350K in sales per month with targeted Facebook ads, no overhead, no US mailing address, no ability or desire to verify her claims, all with a degree in political science from the University of Michigan (supposedly), a Wix website, and an Instagram account full of duck-face selfies and inspirational sayings.

@Jake Alger : Option 2 won't generate any cash-flow but at least someone else will pay for my mortgage.

Some folks look at commercial buildings as 5+ unit apartment buildings or a warehouse or something like that while some lenders and Dodd Frank legislation look at a simple, single family residential that's non-owner occupied as a commercial dwelling because it generates income. 

It depends on what you want, if you want to be almost 100% independent and earn the max commission a cloud broker might be best if you need guidance and/ or leads and are willing to give on commission for it a more traditional option may be a better fit.

All income recieved has to go back into the IRA or I have to pay taxes just on the income generated by the investment property if I keep that money.