Hi everyone,
here is my dilemma and my questions, I like to exchange links with some websites and I have plan to start building some my own backlinking websites but I'm not sure about what is the best way, so please any suggestions would be a big help.

Here is what I'm not sure how to do;

If I exchange links with one website what is best way to link to my website;

like this:

<a target="_blank" href="http://www.hardwoodfloors.com" title="hardwood floors">hardwood floors</a>


like this:

<a target="_blank" href="http://www.hardwoodfloors.com/chicago-hardwood-floors/" title="chicago hardwood floors">chicago hardwood floors</a>

I prefer that visitors find my website just typing "hardwood floors" without typing "chicago" hardwood floors

What is better for search engine optimization?

Thanks in advance for any helpful suggestions!

P.S. this website "hardwoodfloors.com" is used only like example