I have found that I get more appreciation on the single family house because I can sell it to an investor or as a primary residence.

@Charles Kao I believe he means attorney & Title Services that are familiar with non traditional or creative Transfers or Sales of property that don't include Banks.

Best thing to do is buy it as a primary or second home and then transition out into a rental. 

I don't know your living situation but if your paying x,xxx for rent or a mortgage and instead by living in one side and renting out the other you will be paying y,yyy instead and y is less then x that's great, especially if you can rent out your primary residence and make income there too. 

@Kris TohovitisI wouldn't recommend using your cash to pay off the mortgage on your primary residence since you can likely get a better return on that money by investing it.What's your buying criteria for the multi-family property?

The two existing LTR units (on my family’s property) were built 5–8 years ago at a cost of about $80,000 per unit, so I’m estimating a 20% increase in costs for the new builds.My plan is to use the equity in the land as the down payment for the construction loan, which I expect will make closing costs the primary upfront expense.

What if the primary applicant moves out with no notice?

Again, to reiterate, the risk is less burdened because the property also serves as your primary residence.

If not, you could always maintain 2 separate IRA accounts, one self-directed for private lending, and then another for your traditional investing.

I completely agree with @Ashish Acharya's points about the cost-effectiveness of a HELOC and the potential credit implications if it’s secured by your primary residence.