I can probably get about $1400/mo in rent, so it fits the 1% and 50% rules.  1) If I were to do a cash-out refinance, my understanding is that I would affirm that I plan to stay in it for 12 months. 

Of course, I don't want to break the law at all and my understanding is that if I left my job and didn't disclose it before the 'loan is complete', I'm at risk of committing loan fraud.

Getting an average new build price will help me structure this deal, and see where I need to be at or get a better understanding.

While I personally rely on this position, please note that I am not an attorney, the foregoing is my opinion, and the laws applicable in your State should be reviewed.I welcome replies from those with a different understanding of the law, or from states with notably different law.

I know there a lot of different names for this strategy including Land Contracts and Installment Sales Contract but my understanding is that the seller retains title to the property until the buyer, or investor in our case, pays off the loan amount agreed upon.

Again, other might feel differently here.b) Skin in the game: as a conservative investor, I understand that the dirty secret of industries that the waterfall compensation is in the line with me and incentivizes sponsors to take more risk.

I will do a short term (week or so) hold agreement with a non-refundable fee that becomes the deposit if they sign the lease on the agreed date.In your case, I'd speak with my landlord/tenant attorney and get an understanding of my options.

I've picked up books this year and realized how much I enjoy real estate, and would love to understand more about the process here in Chicago. 

My advice would also include understanding the loan requirements of going the FHA route.

I can understand conservative; maybe they want to be perceived as the guy/gal who want to under promise and over deliver.