Chicago House Hack Case Study + Advice Needed

[Donald Aleshire]

Hey BP community,
Wanted to share my current House Hack situation plus gain input from the community on thoughts on how you would proceed given the situation below -- 

Background: 

Purchased a legal 2 Flat with 3 units for $440k w/ 5% down in Avondale Chicago back in 2018. One of the three units is non conforming/illegal and we are currently living in that unit. The other two units (3 bd/1 & 1bd/1) are rented out with great, long term tenants for a combined $2,600. I also rent out the garage for $200 per month, bringing my total rental income to $2,800 per month. 

Finances: 

Current PITI is $2,700 on a 2.5% interest rate with $400k remaining on the loan. Most recent estimated value of the home is $500k during April finance in 2020. Current guesstimate is $525k-$550k based on market + similar homes that went for sale.

Opportunity: 

Chicago recently passed a law that in certain neighborhoods (mine included) allowing illegal units to become to become legal again. Aka bringing back coach houses/additional dwelling units. This would give me the opportunity to make my top unit legal or I could build a brand new coach house in the back yard while keeping the garage. 

Ideal outcome: 

My wife and I would like to look to move out of state to a warmer location. I would ideally like to keep a property in Chicago for the summer and find a similar building out of state where it is warmer. We are also exploring the idea of purchasing a van to do cross country road trips and having a coach house on top of a garage would be ideal for privacy while still getting income from the main property.

Challange: 

1. Since our top unit is currently illegal, I wouldn't feel comfortable renting it out while we are living in a new location. 
2. The cost to get the top unit up to code could easily be $100k based on one GC's walk through (creating a 2nd exit + getting everything up to code). 
3. The building as a whole also has some old pipes that will eventually need replacing ($20k -$30k estimate). 
4. Building a coachhouse in the back is roughly $200k minimum from the architects that I have spoken with. 

Ideas/Recommendations: 

I am in no hurry to sell the property as its working great. Our mortgage is covered, the tenants are great, no kids for us currently and we like the area. BUT I want to start planning for the future (2-5 years) and wanted to reach out to the BP Community for their thoughts. 

1. Sell it in the future "as is" when we are ready to move? 
2. Sell the building now and pump the funds into a legal, Chicago property that eases these concerns?
3. Spend money to make top unit legal or into building a coach house?
4. Any other thoughts? 

Happy to provide more context/details and thanks in advance!