If you move into a property acquired through a 1031 exchange and make it your primary residence, you may qualify for the capital gains exclusion under Section 121 (up to $250K single/$500K married) if you live in the property for at least two of the last five years before selling.However, gains attributable to the time it was a rental property remain taxable (non-qualified use), and depreciation claimed during the rental period must be recaptured at a 25% tax rate.

Since then we have purchased 3 single family homes in the 19th ward, Strong Neighborhood and Ellwanger Barry, all close to the U of R, Strong Memorial Hospital and Highland Hospital.  

Quote from @Corinne Snyder:Hi Michael, my CPA will not allow me to claim myself as a real estate professional with my one rental single-family home rental property because I do not spend enough hours per year running it, therefore he won't allow any overhead expenses to be claimed; only expenses related to the property directly.  

Lastly, have you tried running the #s to look at long-term appreciation on a unit like this vs. a Single-family or Multi-family property?

While I do think most Realtors (single family listing/buyers agents) are a dime a dozen, in the commercial world I think you get what you pay for, more often than not.

However, I’ve never seen single-family home listings on Zillow presented this way.

I agree that there are ways but 1) rent ready without value add will be huge cash negative with realistic expense estimates 2) most single unit ADU additions cost more than the value added.  

My guests have been super easy and understanding.

Hi There - We have had several clients make the numbers work here in Chicago typically with either FHA 203k and home style renovation loans.I continue to remind everyone that a single or walk right now will be a double, triple, or even a home run down the road. 

It's possible to consider a single-family investment, but even then, it would be quite tight accounting for the down payment, closing costs, insurance, etc.