In the worst case scenario with a ban, the property wouldn't cash flow that well (a few hundred negative).I am comfortable with that considering this scenario still cash flows better than most other housing arrangements I could afford in this market.

There are so many renters that claim they can afford something but then their plan quickly falls apart. 

However, could this be an opportunity to make buying a home more affordable?

Almost all of them either went out and bought properties that they could personally afford to start off or they invested with another GP and asked tons of questions to figure out what to do.

If this isn't the case, it seems very odd to pay 50% over FMV for a property, even if the numbers do work out- and that means too I think that it's affordable?

This property was in our purchase price range that we could afford a 25% down payment.

The only way it works out is if you can get a lot more rent for her living space than she can afford. 

Despite the recent run in prices, the Austin metro area house is still affordable compared to many metros.

First, what can you afford.

Ideally, I would like to purchase a duplex or MF, live in one unit and rent the other(s) out.But then I had the idea, that since I'm already applying for a loan, why NOT purchase some affordable land and develop my own MF (Duplex or 4-plex) from the ground up!?