What seems most attractive for now seems to be multi-family markets starting out and eventually moving into 5-20 unit properties for growth. 

I don’t necessarily see 10-20 unit properties listed here but a lot of inventory for 2-6 units if you are open to smaller numbers.

Four units and below is considered residential property.

You could get into a solid multi-unit or a single-family rental with real cash flow instead of hoping your Katy rental eventually fills.Not saying you should walk just yet, but if leasing drags out longer than expected, would you consider selling and reinvesting somewhere with better returns?

Note if you go over 4 units, your valuation will be based on NOI and comp rate.  

We put $4,000 into the upper unit.

Some of the best advice I got that I will forget was this:"SOME OF THE BEST DEALS, ARE THE ONES YOU DON'T GET"Let that sink in for a while...I remember 4117 s Michigan Ave. here in Chicago, it was an awesome 8 unit full gut condo conversation - I loved the deal and still belileve it would have been a great deal, but would have pinched me so thin I am not sure how I would have survived. 

Seller financing can be a fantastic way to get into a 4+ unit property, especially in a competitive market like Chicago.Have you started reaching out to owners directly or networking with agents who specialize in multifamily properties?

Not to say you cannot find a deal in many of those states but for a first time investor wanting to be cost efficient it makes little sense to stick to those states.You do have states like Indiana, Ohio, Tenn, Florida, Georgia, Texas that offer higher inventory of home prices even 2-4 unit multifamily that are under $200K.

One other thing to keep in mind is that you have more financing options on 2-4 units than you do on 5+ units.