@Summer Shelton yes, FHA loans do allow this but make sure you speak with your lender about some of the trip ups from these loans.  

. - When you go to qualify for your next proeprty, your lender can actually add losses from line 18 back into your income... allowing you to qualify for the next property.

I don't know why these people allow Something Like You on their platformCry harder!  

Aim for $500/mo min and even that won't allow you to tap into unless that's after cap ex, management, vacancy is factored in.

Selling sounds great on the surface, but then I would be entering that market looking for a "Deal". 

My starting questions so far are* If zoning allows multi-family, would I need any zoning approvals for a conversion?

I feel like getting my foot in the door now with this one property would allow me to learn without being too overwhelmed.

The lender clearly didn't communicate with you or set proper expectations, which is why it seems the expectations you have are inaccurate.Most lenders will NOT allow you to order your own appraisal/BPO. 

Unfortunately - my current lot for my primary is 1 acre and VERY sloped, and close to a water source (creek), so the county has not even allowed me to permit my downstairs finished basement without an extremely costly renovation to our septic (over $60,000, and that doesn't count demo'ing and replacing our driveway to get to the existing tank and leachfield), and even if I could permit it, it would essentially need to be a treehouse in the redwoods due to the slope (not a bad idea though, I would actually love a livable treehouse on this lot!

The good news is owner occupying allows you to get away with things like this a bit more.