When  every tom, dick and harry thinks they can do it and jump on board it is usually a sign home prices are about to peak.Best buck return wise is probably MHCs....Mobile home communities.

But you should spend the money wisely. 

I do own property In cook county that are section 8 rented but considering acquiring a portfolio not section 8 and want to make sure I am making a wise move.

Gulf Coast bank does do these, as I have spoke to them about 8-12 unit development, concept wise. 

Buy and Hold wise though, we have started looking into other towns. 

My question is with turning an unfinished basement into an apartment or airbnb, is there anything I need to be aware of zoning and/or laws wise?

It seems to me from my internet research that I can't touch the deposit unless he fails to pay rent or causes damage to the property.2- Is it wise to touch the deposit before he leaves?

If that additional payment works for you - it could be a wise choice! 

is it wise to engage the listing agent directly to draft offers?

You refer to yourself as a "REI Mentor" and you freely offer your mentorship to new investors, but it might be wise to stop short of taking another investor's cash for a project that you are taking the lead on until you have more experience - You have said that you are not a professional flipper, but the primary problems you faced were not specific to flipping.