Also - if you invest that 500k in an S&P 500 tracker - you'll average 8%/year - 40k.

What is the average spread in the market(s) you are in for flips?

What are the expected average rents for the 42 units?

Since you know what you need to buy it at and an average rehab cost, I would say $50-70k for a cosmetic flip, set the ARV based on the sample you choose and doing comps and ask them if they would invest in a deal similar to this. 

If I were to reduce or take out the vacancy, the 2 would cashflow.

The owners refused my advice to reduce price and they both sat vacant for months.

The S&P 500 index returns on average 10% per year. 

I believe United FCU is best. 20% down, usually a 10yr term (they offer a longer term though), and an interest rate that's pretty close to the current average for conventional loans. 

Cleveland currently has one of the lowest price/rent ratios in the Nation, with the average home price being $107k and the average rent being $1,416/Mo.

Are you able to reduce your expenses quickly and easily if needed?