As Andy points out above, you could end up holding the note for far longer than you anticipated and that interest will eat you alive. 

So, bottom line, if you hold back whatever your anticipated income tax rate will be, you should be more than fine.

I have enough for a down payment for a 500k house, but it will take some time for me to find a multi at that price range and anticipate paying interest rates closer to what a hard money loan seems to be (9-11%).

It all has to do with your time horizon, the deal you can find to deploy the cash into and your long term goals. if you anticipate using the cash flow to live on at some point or bearing retirement the lower loan amount and less doors probably serves you best.

A few considerations:Cost - I anticipate having relatively significant resources and want to live in highly desirable locations, but at the same time, I want to cut costs significantly from my lifestyle in the LA market. 

I anticipate the selling price to be close to $650K, considering comps in the area, and will be selling and doing a1031 exchange into a DST.  

While we anticipate Florida to be our homestead we also love to travel and would like to be mobile for at least part of the year (possibly RV travel).

Also, I have very little capital at the moment but I anticipate being able to stash some cash away in the time that I'm researching (I have no debt other than the two houses I own; one is rented and I plan to rent the other when I move out of the US). 

I anticipated putting about $4000-$5000 into it to address a few safety issues, make a few repairs and get it rent ready.

Maybe the buyer has to wait until the anticipated (now canceled) closing date passes before relisting her house?