Soooo long story short, if your goal is to use the property a decent amount of time, you will at least break even & cover ownership expenses with short term rentals (possibly make a few bucks). 

I have two differlend loan terms for the two propertiesProperty #1 - 3points 12% covered 100% purchase and 100% remodel (up to 70% ARV) 6 month term Property #2 - 2 points 10% covered 90% purchase and 100% remodel. 12 month term 

It is not covered under warranty.What would you guys do in this is case?

If so, there are several commercial lenders who would do a cash out refinance under one mortgage covering both of them.  

Lets say I was in a position where the mortgage was being covered by a renter.

Most of our cost are from our monthly utilities so if we can cover that we would get oursleves in a much better postition.

The cash flow covers all expenses, CapEx, PITI, Management, etc. 

Pay one rental off and then re finance and get cash back to cover the land contract, if so Rental 1 or2?

Every deal is different and there are lots of opportunities if you find a great property.With that said, I have done 100% loans to repeat borrowers that find a great deal such as where my loan would cover 100% of his purchase and renovation, and still only be around 50% LTV!

The Cash-out Refinance loan will cover the $250,000 Purchase price and $50,000 Rehab.