I'll be looking for small 2/1 - 3/2 homes with the goal of adding a bedroom and/or bathroom to increase the value.

You’d increase the value of your building by $600,000+ at an 8 cap.  

Am I over-thinking this, or is there an increase in supply that may cause too much risk to my plan (getting more cash-flow, while increasing equity in current properties, and obtaining Financial Independence ASAP)?

It's for an increase in rent 10% only and changing the method of payment from electronic to money order

Unfortunately hindsight is 20/20  however I decided to do something about it  my first step was to create my own business about four years ago on HR outsourcing and consulting  which increase my income pretty well, however scaling it up has been a challenge, Specifically after I got hooked on real estate.

How have yall looked at sections and determine  their future stability and increase appreciation? 

We agreed on a 3 year, and I was able to get them to agree on a higher rent/mnth.I can already see why it's better to stick with the 1 year lease with slight increase in rent every year.I took last month's rent not a security deposit.

The market sometimes (but not always) gives us gains, tenants and time result in paid down mortgages, which results in equity increases.  

How do we take fluctuating rates of HELOCS into account... the thing about HELOCs is that there is risk in rates rising, but there is also more ability to affect your monthly payment and therefore increase your cashflow by paying down principal... which you can't do with a fixed mortgage.What are your thoughts for what points to consider and what levers to pull when comparing the two options when its a HELOC you're coming to a deal with?

If the tenant moves out, are you allowed to increase rent?