. $40-$50k out of pocket, HELOC or private money loan for the remaining $20-$30k 

I did save some money to have as back up.

Frankly I would be less excited at spending any kind of money on a place that I don't own.

Value your time and money more.

Even with 100% occupancy, I don't see how anyone could make money.

I like the cash flow on them, if you rehab them right the first time it won't be a money pit. 

If you use a cash-out refi, you can deploy the money elsewhere to partially offset that interest if it will be sitting idle a while.

Misjudged the job cost (contractor error, usually results in asking for more money)2.

A lot of Hard Money lenders don't like to fund on land.

Apply for a dimensional variance on the vacant lot to allow a smaller lot and/or setback so it can be built upon.Your best first steps are to sketch a plan, possibly with an engineer's help, then contact the zoning department to discuss your idea with them to get informal feedback on your liklihood of success before you spend a lot of money.