I purchased a whole bunch of real estate books to learn all the basics so I can engage intelligently in real estate related conversations and plan to join a local meetup group today. 

First off real estate is not a "job" but more of a career .you are an independent contractor, basically self employed, What you put into it you get out of it, you do not draw a wage or a salary , you are paid a commission, you get paid when a property closes. lets say you sell a property for 300,000 and the commission is 18,000.

But so you can answer let put down some basics.   

Rent larger home, use cash to rent a smaller home/move to retirement community (disadvantage: less community of older folks; advantage is we can continue to own the home but make money off of the rent payments; but now we have to manage new renters)Basically asking if anyone has experience moving to a retirement community, and what the optimal move is with our current real estate assets.Where could we talk to similar people in this situation?

Workforce class C housing in NYC ranges from $50k -$200k+/door.Not sure what type of capital you have, patient or fund equity... however a lot of owners in NYC are basically buying the dirt and/or are buying as legacy assets and capitalize on the appreciation. 

Construction cost will run between $100-250 per sq-ft depending on how basic (or nice) the design and whether you act as general contractor.

Take some classes at home depot or Loews on basic home maintenance, like fixing toilets and faucets and outlets and such, to save money on repairs. 

I could just repay him and basically use him as a lender.

@Chris Habets, I was living in the home and basically had a roommate who lived in the basement.

At a 5% downpayment, the monthly total payment is ~5k and perhaps the rents could be increased a bit but even then, they'd only be around 5k total monthly gross rental income..after any expenses and repairs you're in negative territory. i don't really understand who would buy that property..I guess an owner occupant who doesn't mind having a higher personal monthly payment still, or someone just seriously banking on appreciation and willing to incur negatives during the meantime which seems silly..but i agree with the original poster that lots of multis in these areas (wicker/logan proper/humboldt) are priced like this kedzie one and basically aren't a good deal sadly, since they are the nicer properties (location and often turnkey wise). have to go further north/west to get the deals. im hunting for a 2-4 flat myself and wish it could be in prime palmer square location like the kedzie unit linked, but the numbers just dont work