@Roli E. maybe, but they could also raise concerns about insider transactions as fraudulent transfer of assets.

Any Idea how I can find long term financing partners, ideally equity based where we would split home ownership and the cashflow?

Ideally, it will be a fixer which I will fix up and rent out by the room, while living in the ADU/MIL suite/master/ or maybe even finish off the basement.I’m looking forward to learning more about the buying process, costs/timelines of remodeling, and getting in contact with decent general contractors (anyone got recommendations?

I would say that can work with student housing sometimes (although it's not ideal) but I would generally recommend against it and it just makes things messy and tougher to manage.

Call the Chicago Zoning board of appeals and ask them directly why it is rejected and what can you do to make it accepted as a 3 unit.https://www.chicago.gov/city/e...If they tell you that there is a specific requirement you need satisfy then do it. if they tell you there is nothing you can do unless you request a re-zoning then consider whether you want to spend the money and time going through the rezoning process or accept it as is or reject the deal. 

I budgeted around 2,200, so this was definitely not ideal, but that's the risk you take with these kinds of buildings sometimes.

if you will own the land take purchase contract that you get from a local realtor, if home is on a rented lot just go pay a lawyer to draw up paperwork @Ralph E.

., and are reported on schedule E of Form 1040.It's really all about determining what expenses are qualified, and how you split them between rental and personal use. 

Not ideal but I guess that's why we factor in contingencies when doing renovations! 

I deal with this all the time it is normal business in California.