However, insurance is limited because it only protects you from one type of liability: accidents/negligence.

But we are not sure if we can find a good mutli family in the area within the time limit.

I love the strategy of small multifamily properties. 1 roof, 1 foundation, multiple tenants :)In the Charlotte market, this strategy is VERY challenging, just because the inventory is much more limited than single family/townhouse/condos.

Here is where it stops I shall tells yous.You set your limit BEFORE you even negotiate OR try to convince yourself a bad deal REALLLLLY could be a good deal if you tilt your head a bit and look at it from an other angle.If 29K is your limit, you walk if someone wants 29.5K for it.This is a system.

Limited area. 

Perhaps one with strong real estate knowledge, but also one who can advise my wife and I on a variety of other topics, including but not limited to her 401k, stock investments, college funds/trust funds for our 5 children, etc?

However, with limited funds of just 20K and with minimal construction experience the single family is easier starting out.

It's likely not the best way to make a lot of money, but I feel that it is better to do something within my current capabilities instead of getting over stretched beyond my limits and get into trouble.

you can use retirement funds as reserves as long as you have the ability to borrow or withdraw against it. you'll have to provide the account guidelines from the holding company to show what access you have. for example my USAA IRA allows me to borrow like 50% max (think) so they will allow 50% to go towards my reserves. 

However, insurance is limited because it only protects you from one type of liability: accidents/negligence.