One of my clients works with them on a regular basis and has nothing but great things to say as well.http://www.ultimate-realty.com/

But it's not an option that is available to all investors (compared to say a FHA loan or Freddie/Fannie loan). 

Does anyone have any short term investment vehicles that they would recommend for say a 2-5 year period that would be better than just letting it sit in a savings account?

Most of these are >5 units, I’d say a 5plex is approx. $690k based on this but the unit layout plays a HUGE role in this number.

For example, say a tenant has mediocre credit but excellent income and a perfect rental record.

Never had the opportunity to build, just yet, but I have always been curious.If zoning states 1 unit allowed for every 1500sf of lot area and the lot just shy of the next full unit, lets say a 2900 sf lot, will the city still allow it for 2 units or does 1.9 mean you are only allowed 1 unit still?

One of the recent podcasts (185 I think) featured an investor from Waukegan, I'd say a very similar market/neighborhood to your area if you haven't already heard it.

Which would then result in say a cash flow of say $7000/mth( 5 units X $1400....two units rent cash flow per 4plex), that could be added to the 401K monthly width drawl for a comfortable retirement income...Ultimately the units would end up in my kids hands since I would want to keep the units for cash flow until my wife and I were to pass.

You are not allowed to say a lot of things (it could be construed as legal advice), so you have to be very careful what you say.  

Theoretically, a property could have a hard asset value of zero, or negative value as you've projected, and cash flow of infinity - say a billion dollars per month.