But presuming you are talking about doing the above, this is a high risk strategy.

If the proposed loan is too risky because (1) chance of default is too high and or (2) cost of foreclosing too high or time it takes too long and we would otherwise decline the loan, we might offer to purchase the subject property for a price equal to the loan amount.  

The seller is highly motivated to sell and has already knocked their price down 6% since listing it 4 months ago.

Well, I wouldn’t go that far, people throw that word around too much these days but I would say they made a lot of promises that they haven’t kept and paint a very unrealistic picture with an extremely high pressure sales scheme that does a disservice to the vast majority of their students.

One veteran buyer remarked to me that he didn't get any properties because the prices were so high. 

The other factor that's relevant for me is that my husband is a high end W-2 wage earner and we could greatly benefit from the potential tax benefits of actively managing the property. 

Those seem very high estimates ^.

Highly suggest coming out to some of the local chicago IN-PERSON meetups! 

note a lender at high LTV may not desire a lot split.  

If one has high living expenses, cash flow doesn't mean much and I definitely understand going for appreciation first.