Getting started - Scenarios using existing primary residence

[Jed Hefner]

Loan / investing approach question:

Existing primary residence (3br/2ba 1600 sq ft with a pool) is currently on 15 yr conventional with approx 60% equity. (Payoff is $85k, House could sell north of 200k). Separately, I will have around 30-40k in cash around end of year looking to do first RE deal...considering possibilities of small MF (maybe 4 plex) and thinking of possibilities of arrangement and financing. Not married to an FHA vs conventional, but my understanding is that for an FHA, it must be primary residence.

My challenge is that I have a growing family (wife and 3 kids under 5), and it might be hard to move into a smaller space...any advice on potential options to get into the RE game once past the roommates stage for house hacking?

I was thinking maybe occupying 2 units in a 4-plex and renting out our current home.  Recognizing that would cut into cash flow for that hypothetical 4-plex, but would open up rental options for current primary residence.

Am I just way overthinking this?  Has anyone else done something similar to get started? 

TIA

-Jed
(p.s. realized I probably posted this in the wrong sub-forum initially.  Please ignore duplicate).