I am trying to use REST to update a list item but the library has forced check out enabled.
Does this mean I need to make 3 rest calls for each item I was to update?
Yes, you need to make 3 REST calls. One for checking out the item, second for updating the item, third for checking in the item.
I presume you know that you actually need to make another REST call before all these 3, a call to retrieve the Form Digest Value from the context info of the site where the item is located.
The REST URI structure for checkouts and checkins looks like this:
The # in the second bullet point is a number from 0 to 2, where 0 = Minor Version, 1 = Major Version, 2 = Overwrite the current version.
UPDATE It seems the question was for SharePoint 2016, while I was presuming it was for the SharePoint 2013.
SharePoint 2016 (Office 365 as well) supports making batch requests with REST APIs. SO instead of 3 calls, you can make only one. See this MSDN article.