Seizing the opportunity, this was my first venture into real estate.

we are using kwikset key control deadbolt locks.

Only justification I see for the gradual increase is if it is required by rent control laws.

Establish a relationship with a Termite / Pest Control Company, and have them do an inspection every 12 -18 months. 

well what I would do is tell the seller the house needs 45k.. and since he holds the first you are improving his collateral therefore its safe for him to take a smaller down payment.Maybe offer to escrow the rehab funds so that if you say your going to rehab but don't he can go in and grab his 25k that is not coming to him in the form of down paymentlet him be in control of that 25k in some manner.. that may work.Its just like when I tie up development ground if I have a very cautious seller..

You will want to hire a pest control company for the WDO inspection, and if the home is vacant it's not really an issue, but if it's occupied, it's a nuisance to schedule inspections at different times to inconvenience the seller. 

He wants total control of the neighborhood and is willing to cooperate with a delayed closing until I find a suitable replacement.I would like to increase my rental units and would like to use the proceeds as the down-payment on a larger mortgage if possible.The gain/depreciation question I will need to get some advice on from the accountant.

I would want full control over what subs are used.

So my biggest lesson I learned was that I need to be in total control of my deal no matter what.

@Jordan Doolittle if i started over i would buy 2-4 multi units and move every year. 10 years you would control between 20-40 doors.