My opinion, it is better to finance a real commercial multi head machine and accessories for 5 years than to go with a home/table top machine. I would say it would be quickly outgrown long before there was a $5K profit on it. At the very lease you should be able to make you monthly payment plus with the work that will come in. Now, having a single head makes it much harder since you can only produce one hat at a time which could be 30 minutes of production time for a single piece will blow up your $/hr that you might want to make.
Depending on what the customer base is, yes. Are "you" going after corporate clients where margins are not as robust and not really dealing with a lot of "exciting" design work, that are usually done with high volume/low cost, absolutely. If one is doing monogramming with applique, huge markup there, especially if doing novelty designs that most people won't touch (depending on the software, this would actually be able to use other
sign machines (plotters/cutters specifically), or manually done to offset what isn't available in the digitizing software (if outsourcing, usually can get those as well as separate EPS files, at least that's what I would do)). I created some designs that had 9 cut pieces (I don't know what I was thinking when I did that), not many people are going to touch that, good place for premium charging.
However, on the flip side of that, there are "corporate" clients that are still low run and can't really get good discounts with the bigger places due to minimums to keep their machines going.
Keep in mind as well, there are going to be times that it's not going to be efficient to run a machine. Let's say "you" have a 6 head, but an order of 3. Those other 3 heads are wasting time doing nothing (that is just for an easy example, that can be extrapolated out to higher numbers). I doubt would touch the single order, even though huge markup on that. Can't go on to the next order until that one is done (or there is a minimum of 6). There is a tradeoff here, it's not quite as cost effective to just get multiple single heads and link when necessary, at a certain point, they do cost more compared to just one multi-head. This isn't even getting into the color combination variables that can come about. Different types of needles that one may have to change out when dealing with fine lettering, regular embroidery, thicker puff, metallic, glow in the dark, fire resistant etc. There are some people that won't touch .15mm lettering because it would necessitate at the vary least thinner thread and needles and that setup adds time, especially if having to do it on a multi-head machine, usually also for greater fidelity run it at slower times (some machines, like Barudan, can control that via their U?? files, but I digress, nerding out here I am).
There are some trade offs with regard to repair work as well. Multi-head machine is down, it's all down, if have two single heads, one is down, it's only one down. Plus, if having to get a tech to work on something, sometimes it's more cost efficient to be able to take it to someone versus always having to have someone come out (not always, but it's sometimes nice to have that option).
I have had 1 multi-head (4), and 3 single heads (2 compacts and 1 bridge style (also had the sequin attachment on it)). They all had their place and having a variety allowed me to do certain jobs as well that I would have to turn down if I strictly had one type, but that's all I did, this is further compounded if someone is doing multiple different things, it's best to pick one target demo and stick with it. If I need to add or take away heads for different jobs, having those single heads allowed that to be a consideration as well.
To actually nail this down, the OP is going to have to determine the exact embroidery market he is going after and use that as a starting point. 400 to 500 pieces per year (don't know what the growth rate is every couple of months) is not necessarily multi-head consideration. Don't really even know what the makeup of those orders are, apparel/hats/towels, what expects the largest order at one time. How much resources are going to go into this (dedicated employee) or is it just an accommodating side hustle when time allows?