Only you can really answer that since it depends on your goals / business plan.If you are investing in residential properties, then more than likely you are working with a Realtor, a member of the National Association of Realtors. 

You can only take so many residential loans

Next is to determine if you can increase the NOI through enhancement in the property, reducing expenses and raising rents which will ultimately increase the value of the property.

Last year a short term rental law that limits short term rents in residentials in San Diego was passed then rescinded.I was wondering if that legislation is enacted in the future, will that concern MF (>= 4 units) also.

We have property insurance for the overall building and I believe it is standard practice that commercial tenants pay for their own property insurance for inside their walls (just like you would have renters insurance in a residential unit).

You can charge higher rent (~$50/mth); the tenant pays some - or perhaps all - the operating costs (electricity/gas, water, DHW); and you can use residential machines (A high-efficienty front-load laundry can be found for $1000.00 or less).   

It's currently a sellers' market, and finding residential properties that cash flow without substantial down payment will be a challenge.

Investing in a commercial property seemed safer than residential at that time, I was not mistaken and it has been a great learning experience that has given me the confidence to embark in bigger projects and also advise my clients based on my experience.

(no consumer debt)Your mortgage is paid off (appx 380k)You guys are empty nestersYou have invested in residential real estate with positive cashflow, but nothing to write home about!

The residential part is NOT 50% of the building therefore, the loan has to be commercial which is fine.