The sister seems to have her head on straight from what you've said.

I understand that he's back and forth with it, but maybe the idea of continuing to get some monthly income would be more interesting to them and they wouldn't have to worry about the property anymore or a tax burden from a straight sell.

The market is red hot right now so your best option would be a straight sale if the property is that desirable.

For education, I've read through most all the posts that seemed relevant in the Chicago forum here posted in the last 2 years, listened to many of the Straight Up Chicago Investor podcast episodes, been working through the BP Podcast early episodes, and just finished up reading Househacking by Craig Curelop and The Book On Rental Property Investing by Brandon Turner. 

They exist for the protection of the public in the ongoing operation of real estate, and this is something they can help set straight if the builder and agent can't at lease explain the reason for the non-refunding.

The cash flow may be harder to achieve straight off the shelf here than other markets, but the overall returns (increased cash flow from rent increases over time, appreciation, principle pay down, and depreciation tax benefits) are great here.   

Does anyone have any experiences they can share with me in regards to investing in there first property and if it’s possible to skip the single family home and got straight to small multi family?

No cracking, the boards are straight, and well supported.

So, if you wanted to own a home, and have the tenants pay most of your mortgage, that could potentially be a good deal.However, as a straight investment you won't be able to use FHA anyway, and based on the 2 bedrooms currently available for rent in Derry, I don't see those apartments making enough money to even cover the mortgage, cap ex, etc., let alone making you any money. 

When you started investing, was it local or did you go straight to investing out of town?