However, in emergencies or cases involving health and safety, we would attempt to contact the owner first and, if unsuccessful, proceed with the repair as outlined in the contract.Regarding the hot water heater, do you know if it genuinely needed to be replaced?

.  --- From the zoning code it says, an RM-2 zoned lot can have "1 unit per 2,500 sf. of lot area"If you don't meet that lot size requirement you'll need to make a request for a variance, then post notice about the desired change in front of the building.

Meeting a 20% down payment to avoid PMI seems manageable, although would take a big chunk of my liquid net worth, and I prefer this route over using an FHA loan.

Don't forget to change all your faucet aerators and shower heads to low flow it makes a huge difference as well as far as water usage and saving HOT water. 

Looking for something with low acquisition cost, and meets or exceeds the 1% rule.  

Attend local real estate investor (REI) meetings and get to know people.

Don't just find out how it's all licensed and check on any historical issues with it, no you want to meet with local board members, find out how they really feel about the place and what the cities wants and plans are for the place.

Does anyone know any type of real estate meet ups that are happening in Chicago in the month of January?

There are snakes under the hot tub.3. 

Your specific variable expense assumptions are wrong, BUT you stumbled into them being correct overall.Also, you are approaching this correctly - entering in the numbers to generate a purchase price that meets your metrics:)