In short, I can afford the additional $1100/mo cost of a second house, even until I rent it out.I have around $35K in HYSA and emergency funds that I could use for a down payment, but that's less than 20% which would be required for a conventional loan, assuming full purchase price.

Run your numbers based on youre required return given what youre likely to have to spend and the amount of headache, risk, and work you have to do.

I think the height requirements in Chicago are 7'6" and we're right on the edge of that. 

Rental should be $1,600 a month.This year, I plan to build one more rental property, and it will require financing.

I don't know what they are but unless there's something in the city that requires that kind of notice, it sounds excessive to me.

Passive investments require a lot less work to maintain although they do take considerable work on the front end to do appropriate due diligence (at least if you are a conservative investor).

My focus is on providing either turnkey-style space for those interested in temporary, infrequent use or long-term leasing for business folks who require conference room space (or perhaps event space).

In Oregon for instance unless your doing a PUD open space cannot be required and you MUST create lots to specified zoning density.. in other words if your zoned 5k sq ft lots U cant ask for 7500 sq ft lots you must be within 10% of the base zoning.

One thing to consider since you are a California resident investing is the compliance requirements for LLCs incorporated in California or operating as a foreign entity here - the rules here are different than most states.  

Given the competitive market at the time, every property was receiving multiple offers, and securing a deal required both strategy and speed.