The owner's own contractor even backed out. 2- My rent where I am currently living will increase significantly (by $250) in about 2 months.

Keeping it as is, only doing necessary repairs, and keep doing annual rent increases.

My last rehab the only thing that popped up is one of my contractors took on more work than they could handle and therefore were too slow pushing things back and increasing the rehab duration.I am not a fan of newbie RE investors not investing local. 

You know he will probably redeem, and you don't want to sue him and just increase his redemption charges as a result. 

Expect gradual increases. 

You should then ask the landlord how much he is charging for rent.If there is a big difference between the numbers - that is great because you can go in and increase rents when the lease expires.You should reach out to a lender to see if you can get financing on the deal.You should also reach out and get good figures for items like real estate taxes/home owners insurance etc.

The cons are that you will have force saved money in a manner that you cannot easily access to increase your net worth and income.

Times 2 years, and you'll be $3k short of your projected expenses.Now add into the mix the increase in costs from what you are using now to estimate your future CAPEX off of, and you won't have enough money...even if all goes well.Saving for CAPEX through your cash flow is a losing option.Let's just see what happens if you do have added costs, and vacancies per year:assume 1 month vacant and one month worth of added costs per year, and you would end up saving only around $4500 per year.That would put you $6k short of your 2 year estimate, and (assuming you will only have the 3 years after that) $1500 short at the 5 year mark.The HELOC is there waiting for you when you need it.

I was wondering how often do you increase rent, and what % do you usually increase it by.

gradually increasing rents?