Going through a similar decision making process myself (though with less money!). Perhaps the main thing I try to remind myself is that while generalities are important, each property must be analyzed on its own merits. If a 7-unit building shows up for the price of a triplex (just happened to my friend), snap it up, even if you are looking "very small". As others have pointed out, real estate markets are not necessarily efficient.
Big Property Pros
-Better ROI in the long run...maybe
-Leverage is your friend
-Management economies of scale
Big Property Cons
-Leverage is your enemy
-Management is a pain in the ass, even when efficient
Small Property Pros
-Easier Management
-Low leverage (psych and risk benefits, sleeping like a baby)
Small Property Cons
-Lower ROI in the long run...maybe
-No economies of scale
-Nagging sense that you could have done better/bigger, no bragging rights, doesn't feel very fancy
If you want to own your time, there is only so much management you can do. And it's not generally cost-efficient to hire a manager until you are at 20+ units (rule of thumbish). So a sort of "in for a penny, in for a pound" concept applies. If you are going to hire management, you really want to have enough units to make it pay, so you buy more units, with more leverage... That's been pretty tempting to me in the past, but I've kind of circled back to low leverage, few units, self-management, and not feeding the monster. Tough decision, though!