Lets say I have the following domains:
Example-two.com and example-two.net redirect (godaddy domain forward) to a sub directory on example.com.
Right now, I don't have example-two with any google results, how should I go about SEO for forward domains? Changing domains is not an option.
Domain forwarding shouldn't be an issue as long as it's done properly. The odds are those pages rank poorly because of poor SEO or poor content. Is the content unique? High quality? Do you have quality links pointing to those pages? Is the mark up correct and semantic? Do those domains point to the same content? If so then you'll have duplicate content issues.
Your domain example-two.net should use a 301 redirect. In all likelihood, it already does since GoDaddy is doing it for you. This will pass along ranking from the forwarded domain the its target.
Everything John Conde said applies. You need to make the content in example-two.net interesting and have links to it. To not split ranking between people going through example-two.net and those arriving at example.com, you must decide on the official name and use a canonical meta to let search-engines know these are the same domain.
