Values have increased significantly in recent years as higher density development has pushed further from downtown.

How do you account for increases in property taxes (Chicago is more than likely going to increase taxes for the next few years)?

Have you talked to your insurance broker about increasing the deductible?

Or, I could use all or some of that cash as a down payment on a place here in CO, but I worry that the market here is increasing at rate that it cannot maintain.

Not only is it a mental and emotional victory, but it increases your cash flow.

For moving there as a primary it depends on what you are used to but for investment purposes depending on where you are there's forms of increased development and is a marked for gentrification.

This choice changes the situation for the lender into an equity partnership which increases their risk, which deserves a higher reward, in equity, cashflow and sale.In any case the lender should be on title (like a bank would) to secure some or any colateral.I am a multifamily real estate business owner and not a legal expert, therefore any agreement should be drawn up and executed by an attorney specialized in your field.

In fact, this does increase their tax bill because of the interest on the loan. 

@Matt Smith Hey Matt, A few items here: You can always offer the 80% of the listed priceThere is already meat on the beat, it is the $500 less than what you're paying right now, and YOU (no, sorry TENANT) is paying down your mortgageDuplexes are hard to come buy in your area [you found one of the unicorns-this is a sign lol] One item to watch is the number of rooms and bathrooms, which could increase your ongoing maintenance expenses, but you already have some capital set aside so you've got that covered too-you're rock n rollin!

Seems scary to take on any additional debt unless unless if you have quite an increase in cash flow or an amazing opportunity due to currently being in a debt repayment plan.