My current situation is, in part, a result of playing it too safe and avoiding risk altogether.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

Converting your condo into an investment property and transferring it into an LLC is a smart move for liability protection.You’re correct that retitling the property involves Chicago’s transfer tax, which can be substantial.

Although there is potential profit in this kind of profit, there is also more risk associated as the repair costs can pile up quickly and create a scenario where you have invested more into the property than the repaired property would actually be worth. 

@Tom S.Yes I am sure.See IRS link below and see the discussion of 2nd loan involving "Jim"https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans

There's many other options in real estate such as syndication and note investing depending on your level of involvement. 

Quote from @Marco Bario: @Kris Kempe - You should consider the risks for you and the seller when wholesaling a subject to deal.

who are involved in wholesaling or other real estate ventures.

With more risk comes more reward.

I've heard that about the algorithm and changing your listings but didn't know about getting so closely involved with Airbnb + VRBO.