I think I’ve got an idea of how id like to approach things but I am certainly open to suggestions, ideas, and advice!

(additional info: changing the stairs or getting new ones would be a massive undertaking)

Any other suggestions would be great.

My family and I would live in one of the units in order to be able to do this, and there would be an additional 3 units in order to get the full amount of the FHA loan. 

Suggest you work with another agent/investor like me that can help you navigate REI and avoid the pitfalls.

I would suggest in speaking with banks about the option of refinancing either of these homes separately or together.

I am by no means an attorney and to my limited knowledge I don't know of anyone who has gotten "caught" with the new illinois law, but my understanding is that you can not "Market" (aka sell side of wholesale) more than one property per year.So if you had a licensed agent do the "marketing" of the property once it's under contract then you should be in the clear.You can of course double close, but the law is more specific to the marketing of the property vs. how it's closed.My suggestion @Andrii Sazhnev would be to find another wholesaler who has their broker's license to work with them while starting to get your license...in my opinion (if you have the time) it is worth it for anyone who is doing real estate full time to get there license - simply for the education and MLS access.

You can suggest to set aside money for CapEx items but they get capitalized in the value of the home i.e.

Additionally, since they are pooling investments at the Spark level, then investing as one entity into Rise48.  

It may be tough to find a property manager, and I would expect that you'll have a few additional fees when it comes to the rent by room strategy.I'd encourage you to think about managing the property yourself when living there as the landlord, and would be happy to share some of the do's and don't's that I ran into self managing a few house hack properties.