They probably have seen the value of their own Chicago home go up over the years. They know psychologically that it is a good investment. They know roughly what it costs for repairs. If you needed money, with the apartment you could either have to sell the whole thing, refinance the whole thing, or bring in a partner on the whole thing. With the 5 houses, you could sell one of them, refinance one, or bring in a partner on just one.
Houses are more liquid.
In most areas single family homes sell in 120 days or less. Apartments can take much longer. More people can afford single family homes and more people want them. With an apartment building, all of the tenants know each other, and they will know what they pay in rent. That means it is difficult to charge one tenant higher rent than another.