Some of them have excellent incentive/rebate programs on insulation, water conservation, ACs, etc.

Perhaps we need to plan a larger budget for the CAPEX, just to be conservative.

A conservative average monthly cost for this is $500/mo.

You're conservative and want to put 20% down.

ThIs is well below market rent (even for these units).I put $10k down and estimate the rehab to conservatively cost around $30k.

Also for closing costs, I calculate between 3-5% of the purchase price....your estimation was close but I always estimate conservatively to protect my calculations. 

The back-up plan is to simply flip the property and take the cash out now for the next project.The Project (2 unit Multi-Family):Acquisition/rehabLand Acquisition:     275k (I'd use my cash to buy)Hard Money Loan:  100k (I might use my home equity line at 4% APR over 20)ARV:                           465k (This is my best assumption based on other comps)Refinance:                348,650Cash out:                  26,250Income:Rent:                         1800x2 (This is conservative)Capex/Maint.          300x2Expenses:                400 (water/trash/electric/sewage/insurance)Using these numbers the property looks like it generates a COC return of about 30% per anum (on the 26k outstanding).

I am very conservative financially so looking to take the slow and steady path.

@Matt Hendrickson I am fairly conservative financially and the numbers you have provided look reasonable, so I would go after the next property. 

On flips I tend to be very conservative, so for the most part flipping is dead to me.