You choose both targets on activation, so you can only activate this when you can legally choose both targets.

If you pay the {3}, you do not choose a new pair of targets when it repeats. This means that if you lose the flip, you have the choice of having your creature destroyed or paying {3} to try again to win the flip. If you lose again, you get the same choice, and so on. You can keep trying to destroy your opponent’s creature as long as you have mana to pay.