With regards to building a 2-4 unit anywhere, has anyone been able to work with the municipality on the zoning to get the multi-family approved in a traditional single-family area, without it being a larger apartment complex?

Condos have always been location based, stay away from larger buildings that have high high fees

In theory, rents should remain stable and there may be a larger tenant pool to choose from (depending on the quality of your area).

But yeah, we realize we're getting into a competitive market with a lot of investors having a ton of liquidity sitting on the sidelines waiting for the next deal...so we're keeping our expectations for finding our first investment reasonable! 

We are looking into East Austin to purchase a house - preferably a duplex (or larger) that we can house hack or a home w/ an ADU built in it, that we can also house-hack.

Because of this I would most likely not have enough income to get approved for a larger loan needed to buy a multiunit.I live in California, and multi-units within the area and neighboring counties are more than I could qualify for on a loan(4k plus).

Should I wait another year to file a full year of my salary based income and be able to qualify for a larger loan to purchase a Multiunit?

With that being said, there was still liquidity in the market place with your traditional private lending companies still writing loans.  

(Larger house, private beach, family friendly) or diversify in “type” and maybe do the opposite....maybe aim for the couple travelers instead and get a smaller place in a hyper convenient location (right by downtown, restaurants, etc)Any thoughts appreciated!

Liquidity matters.