If you do not have any capital up front or the ability to raise capital, then perhaps wholesaling would be a better option to start with.  

The 16 unit was listed at 635k and we got it at 540k because we negotiated seller-financing (5yr term/30yr am with option at Year 5 to extend another 5 yrs) The seller required us to bring 120k down, which we raised as private loans (secured by contractual personal notes) from friends and family, and two of those 0% interest for 12 and 18 months credit card check offers totaling 20k (which we have mostly paid off in this first year).

The 16 unit was listed at 635k and we got it at 540k because we negotiated seller-financing (5yr term/30yr am with option at Year 5 to extend another 5 yrs) The seller required us to bring 120k down, which we raised as private loans (secured by contractual personal notes) from friends and family, and two of those 0% interest for 12 and 18 months credit card check offers totaling 20k (which we have mostly paid off in this first year).

This always raises a red flag.

Assuming the condition of the unit allows, am I allowed to raise more than 8% (5% +2 ~ 3% index) and straight to market rent?

My Name is Daniel Madrigal and I was born and raised in Chicago. 

And then you can look at the best of those to live work and raise a family. 

I would like to get them all out and get a nice family to rent it and raise the rent.

Also, looking for great books to read on the topic of real estate investing, particularly in the areas of deal finding and raising capital, would love recommendations.  

If you raise your mortgage balance, then you will pay a higher amount.