I started with multifamily but price expectations have gotten out of control.Just refinanced my multi-tenant retail property and pulled out much more cash than I put in. 

This would still consume virtually 3 months of went.  

There are a lot of cheaper areas in the Midwest and South where you could take that 500K and buy either a dozen or so properties (with a DSCR) or buy a bigger multi-family.

Hindsight is 20/20, and my education (courtesy of the school of hard knocks called Life) has shaped my approach to real estate investing and how I help others achieve their goals.Since 2021, I’ve been working full-time in real estate, specializing in assisting both local and out-of-state investors in acquiring small multi-family properties and short-term rentals.I would love to meet up with you and further discuss your REI interests and goals.

In the case of a multi-unit, the units you rent will be considered investment property *I am not a CPA, so trust but verify :)

I have a close associate with a large project there and the local banks have turned off the spick-et on funding his developments and these are very large multi thousand acre deals.

there has been a lot of talk in the industry about building multi generational housing..

There is such tremendous demand for inventory in EVERY niche - primary residences, LTRs, MTRs, STRs, flips, multi, absolutely everything. 

buy a small multi and live in the smaller unit. 

Or in your case, maybe even change classes of property and use what's known as a consolidation exchange to combine the sales into a larger asset like a multi-family or commercial property.