AhsanAllahu ilaykum 1)my non muslim neighbours smile at me/wave/come to shake my hand. Do i smile/wave/shake back? 2) And do i initiate smiles/waves/handshakes/small talk or even longer conversations for a good relationship to maybe give them dawah eventually? They know im muslim+have big beard

Ustadh AbdulAziz al-Haqqan

Yes, of course. You should set an example and treat him with high kindness, respect, and friendliness. This is among the highest forms of da'wah; when people see these great manners, it serves as a way to call them to Islam.