I am looking for any recommendations on how to properly scale this idea over the first few years conservatively and not wanting to over use leverage and debt by starting small in duplex and being open to triple/quadplex in the future if the right opportunity presents itself.

Your wife as conservator/guardian has an obligation to her mother and selling the property to herself creates a conflict of interest in that she stands to benefit as the buyer and is also making decisions for someone else as the seller.2.

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

And your central point I think, is to use conservative numbers so the deal still makes sense even in the worst case scenario.

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).

So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession.

Thanks Dennis, I think you're right that planning for a more conservative return would be a good idea.I re-ran my numbers at an even more conservative level:Lower ARV: $800,000Lower income levels (I'm assuming it will take a couple years to get up to full potential income, but giving myself 3 years was a conservative estimate):Year 1: 50k (NOI $1,000)Year 2: 80k (NOI $31,000)Year 3: 100k (NOI $51,000)My ROI numbers come out to:1% (year 1) 46% (year 2) 76% (year 3)This scenario seems like an acceptable risk to me, when the upside seems far more profitable.

The LTV of the loans I’d conservatively gauge at about 35 percent.

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.