1) Buy complete, functional bike.

2) Buy rear wheel with flip/flop hub, cog and lockring.

3) Strip all the **** you don't need.

4) Install new rear wheel.

Conversions are great for new riders because it's a cheap way for a person to get their feet wet. If it doesn't work out, bring it back to original or just flip the wheel and ride single-speed. And aside from bottom bracket height, there really isn't a practical reason why someone can't enjoy a conversion on the road. Pedal strike can be mitigated.

That said, for $300 I'd go to bikesdirect and buy any of the several completes they have there. It's a lot less work.