If you have a closet that's all you need and you should definitely close the wall off so it could actually be used as a bedroom.  10'x10' is very common bedroom size in Chicago, although its not ideal it can easily fit a full soze bed with extra room.  

The house itself looks decent, but the external factors (neighborhood, multi-family) are your problem. 

Ideally you want portfolio lending, even though it may not help you on this purchase, the relationship you build will help with future deals.

Ideally, I would recommend that the money that was going to retirement to be saved to build up your emergency fund and for a down payment for a duplex or another property.

Since my first comment in the chain, additional people have chimed in to say that the market will never go down againBecause foreign investorsBecause California Because some people don’t need to make money YaddaYadda YaddaNone of these factors existed before this current cycle?

Of course, we salespeople often recommend what we know best - and I may be no different ;) - but again, smart investors always look at the best options in the nation, and decide where the best place to put our investment dollars are... factoring in the returns, the potential for appreciation, and most importantly, the strength of the team on the ground. 

With all this factored in, it is a great return for me 25%+.

Ideally once we have our first or second purchase under our belts, we would then start looking into duplexes or fourplexes.

Macroeconomic factors could impact Ypsi, especially since it is (I assume) heavily dependent on auto manufacturing. 

The existing mortgage will probably save me over $30k in comparison with my new terms factoring in the remaining maturity with the existing financing and the rate I would pay with a similar maturity.3.