The replacement cost (cost to rebuild, not the value of the property) data providers are pegging the quadplex at close to $2M and most 1-4 unit rental property insurance programs tap out at $1-1.5M before you'd end up in a commercial insurance product.

Did you guys close and everything go smooth?

Assume for a moment its close to max tax bracket ie. nearly 49% (Federal + State), roughly $17K.

You won't find anything close to the Austin market with that budget. 

Very close to two college campuses and downtown. 

Step 2- close and start rehab-- would need to pay holding cost during rehab?

.$8,000 would likely go away in closing costs.

Congratulations on closing the deal.  

Now, with the ADU rules, developers are buying anything close with some extra space so there may only be scraps left that wouldn't pass FHA or would price you out.

I closed that property with less then 1% down of my own cash.