There are many differences between the two in terms of property type, financing, and disclosure requirements.

I also think that while the in-law provides more flexibility, the route with master bedroom and bath may increase the value of the property more than an in-law and give me more flexibility in terms of exit strategies.

With your 28%, what do you generally look for in terms of cash flow after reserves?

How much would it cost, in terms of monthly bill? 

-What strategies have been successful for individuals in terms of lining up traditional lenders to agree to refinance the property post rehab and rental, prior to the initial purchase?

BY LISTENING TO THE PODCAST I'M HEARING A LOT ABOUT "FHA LOANS"  (DO THEY COME WITH A LONGER LOCKED IN TERM? 

They may have some referrals for you in terms of lenders.

Both perform well, but are very different in terms of size and location. 

@Nathan CalabreseRS-3 Zoning is actually "Single Family" zoning for the City of Chicago; however, if the lot is large enough, you can legally get a multi-unit building on the property "by right".That being said, I am not really sure what you would need in terms of a "Deconversion permit".

I recommend this book because it can definitely point you in the right direction in terms of getting funding.