What zoning code could I request a zoning variance or rezoning that would allow us to have the 2 livable units on parcel, one primary residence and one additional living unit (known currently as ADU)?

Structure as a commercial lease, 5+ years, annual rent escalations, requirement to carry liability insurance (name you as additional insured), etc.

Hey Chris, this sound like an awesome addition to a tool set.

I think their logic was that a family with 12 people (parents and 10 boy children) would have difficulty finding a suitable house with say 6 bedrooms.In addition to the Federal guideline, some local ordinances address occupants both tenants and owners. 

I would like to find a way to generate additional income and am exploring options other than having a long-term roommate.

I wanted to help them out and minimize their loss and saw an opportunity to get a property slightly below market because of my commission savings, immediate mortgage and maintenance relief, in addition to keeping a lower short term interest rate How did you find this deal and how did you negotiate it?

Once you have read, underlined, highlighted and taken notes on that book, then I would move on to finding additional resources and groups.All the best! 

In addition, to factor in their debt load, I require the rent + monthly debt payments to be no more than 45% of their GROSS monthly income.

I moved to miami and it's tough to do here columbus land is cheap. lower than lenders even require our buyers have to come up with additional equity just to close the loan. not sure austin's economics but happy to look at a case study with you to see if it's feasible 

Instead of losing 55k they will probably only end up losing $25,000 - $30,000Long term its not a great cash flow property but with some renovations and addition of a parking slab I think long term appreciation is the big goal here.