New to embroidery anything helps

You won't be able to easily knock out a large quantity of hats with that type of machine. It can be hard to make a good profit with a small quantity and people will ask for just one hat. Some people make a good profit on hats but many customers don't expect to pay much because "its just a hat".

Running hats can be one of the more difficult tasks in embroidery. If a particular style doesn't fit your frame or the design isn't set-up for caps then you can have major problems.

If I was starting in the embroidery business and wanted to purchase an inexpensive machine I might specialized in monogramming but with that you should have monogramming software.

no. not really. i'm not aware of any $500 machine that will do caps. you need a machine that has a cap frame to stitch a decent cap. you CAN start out with a home machine, but plan on upgrading pretty quickly. they're more limiting than a larger machine, and most don't do as nice of a job. doing an 8 color design on a single-needle machine would not be cost-effective. the frame sizes are also limited.

Caps/hats in general are not a home machine sort of thing. and a 500 dollar machine... it would break within a week of any real production scale worth of work.

Caps are a magical world where they are inexpensive, but hard to do well and usually require a 5K-15k machine to do well.