I am not sure how the owner occupancy requirement of the JADU impacts value, but is will impact value as there are many RE investors who do not want to owner occupy.You should be able to determine the value by calculating NOI and knowing the market cap rate.  

Cons:Lower Cash Flow: Properties in cheaper markets often have lower rental yields because I have to pay taxes, insurance, CapEx.Market Risk: Cheaper markets might be cheaper for a reason, with slower appreciation and higher vacancy rates.I won't fix my foundation.

Broadly speaking, I would say network with developers in your market that are doing what you want to do.

They may be able to transfer title to LLC after closing, but it will be best to check with your lender if there are any restrictions to do so prior to that lender selling that loan in the secondary market. 

Unfortunately, certain markets are much more difficult to evict than others.Going forward, I would try to set clear expectations with your residents, and when they violate one, they need to be held to account. 

I own a few properties throughout the Chicago suburbs and I'm looking for a new market.

Do they need some "sprucing up" ($2-3k) to get market rents or do they need more extensive renovation. ($10+k)- How is the building appear from the outside?

It is a very competitive market here with restrictions all over the place. 

As for the loans, you can benefit from owner occupied FHA as Benjamin mentioned above.

Leveraging Dale's local market expertise, we secured the property for $60,000.