And by exchanging from one smaller into one larger you save some exchange fees for multiple purchases, ease the pressure of finding two properties in the time frame, and have the flexibility at will to refi.

What kind of updates can I inexpensively make to the properties in order to raise the rent and increase my margins?

I will be back in market in Mar-April timeframe next year and want to ramp up on educating myself. 

Is there a certain time frame to apply for a line of credit on a home that you paid cash for? 

It would be very easy and inexpensive for him to create access to a major paved road having the properties combined.

Accounting for 10% in expenses each month.

Wholesaling properties would require contracting these pre-foreclosures with the permission from the owner (homeowner retains ownership of the property until it is auctioned off), negotiating a purchase price directly with the bank (dependent upon liens) and then selling the contract you retained from the bank for the purchase of this property to another investor.You will require a network of investors as these banks give you a time frame to close on this property at the price you negotiate (thus losing a deal after working months to get would be a major disappointment).Experience in cost of construction is a plus; gives you better leverage when negotiating with the bank.Short sale negotiators would be a major plus as they understand exactly what the homeowner is required to fill out and provide.Most short sales tend to take 3-6 months to negotiate and contract.

Is there a standard depreciation time frame for this kind of capital improvement?

You're spot on, I just ran a chart and it shows low season booking within a shorter time-frame than high season. 

If yes and no, you might really benefit from an inexpensive place that can potentially turn into an owner finance buy.