You now have a golden op remove your past employees 491k to a self directed IRA (please don't consider equity trust) and invest .

In the OP’s example his friend could have an extra $500k property bringing in income instead.

Well it seems OP has not received any helpful answers from agents.

However, utility metering will reducing op-ex and will likely have a much bigger impact on NOI.

@Chris Seveney not quite sure I understand your post, but from the OP: "I am not sure I can make any money on the house I'm in since it really hasn't increased in value much since I bought and even if I do, I still have the capital gains tax to worry about as I have only been in the house a little over a year." 

What is a good rule of thumb for all in Op Expenses before you determine your Net Cashflow ? 

Hey,From a buy and hold investment perspective what’s the difference between buying Co-op and a condo?

You cannot 1031 owner-occupieds OP, you are perfectly willing to accept  the other repair costs, closing cost, moving cost, 3% agent commission, but somehow you can’t live with any taxes on your profits?  

It will be very difficult to obtain a loan for buying into a Co-op, I have a buddy who bought a co-op in Rogers Park awhile back few years ago and he said it took awhile but was able to get it done.

If David raised the rental rate to $950, his residents would probably rent somewhere else- they are making a dumb financial move in paying late, but that shouldn't prevent the OP from profiting handsomely as he is doing.