If you live in one side and want to STR the other, that won't work because each unit is its own primary residence.That said, I have clients who have successfully rented out a guest house/ADU in LA on a short-term basis and since they occupy the main residence, they are not bound by the 120 day limit to fulfill the primary residence occupancy requirements.

Is any rehab required? 

Please consult with a mortgage expert about that requirement before making a decision as this is not advice, I am not an expert.

Lastly, if there is imputed equity, some lenders will give you credit for this but usually requires a story, and not merely being purchased well.

Effective property management in the Chicago market requires working with a trustworthy property management firm.

This would be our first new build and require rezoning approvals.

This is good for economy and spending but bad for housing affordability because that many more people add to the housing requirements. 

For example, FHA loans allow for a really low down payment where others required a lot more. - It really is personal preference - everyone has their own "this is the best market."

Most jurisdictions require a GC if you're not the owner, and on a new build you'll need someone to be there for inspections, etc. which if you're flipping without a permit you probably haven't encountered that.

Open to developing the land myself, but in most cases that would require finding a partner, so I'm prioritizing zero-to-low cost options.Recent fee appraisal puts value around $140k.