., the 2006 or 2009 IECC — International Energy Conservation Code).Cost Considerations for a 90-unit or 112-unit Project:The actual cost of qualifying for the 45L tax credit depends on various factors, including:Energy Efficiency Compliance: The primary cost will come from ensuring that each unit meets the required energy efficiency standards, which typically involve energy modeling, certification from third-party energy raters, and potentially upgrading insulation, HVAC systems, windows, and other components of the building to meet the necessary performance levels.Energy Modeling: Typically, you'll need to pay for an energy consultant or engineer to model the building's energy performance and ensure it qualifies for the credit.

I would suggest you do both of what you suggest - meaning get either a new mortgage (more conservative route) or HELOC on the townhome and use those funds to buy your next investment property.

So your 35% operating expenses makes sense and seem plenty conservative to me.  

From what I have read and heard, a conservative underwriter should project the exit cap rate at least 50 to 200 bps higher than the purchase cap rate.

Motivates tenants to conserve and not waste water.

Well if you ran realistic conservative numbers for maintenance, capex, vacancy rates, rental income, etc then you don't really need cash flow do you?

I am hoping this number is extremely conservative given that our contractors, inspector, and realtor walked it as well. 

If that is all ok then get a very good local realtor to run comps in that area to determine the conservative value of the home once you've completed the renovation work(ARV).

Be conservative on your rehab budget, rehab timeline, holding costs, etc.

I’m closing on my second deal, a duplex that’s going to take about 9-12 months to comeplete (I’m doing the work with some sub contractors but mostly myself) at this point after that is done, I will be out of money, even before it’s finished I’ll have to raise some capital to finish it, but it should cash flow conservatively $600 a month.