Sure, you can diversify from market to market, but if you only own single family homes, it's still all real estate.What I do is leave all of my retirement account money in a low cost index fund, then buy real estate outside of any tax advantaged accounts.  

If I was to invest in a volatile market such as the stock market I would invest my money in low cost index funds this way I own a piece of the whole market.

I have spent the last year or so learning about personal finance and investing, mostly about stocks, bonds, and index funds.

Note that Warren Buffett just won his $1m 10 year bet that low cost index funds kick the snot out of managed hedge funds, so don't assume that higher fees = more micromanagement of your money = higher ROI.

If you've put about $210K into it and you're getting $12K per year that's less than 6 percent ROI and that's optimistic, you can do much better with index funds.

I state that I'd love to make an offer on the property written on the "enclosed index card".

Couple of ideas:Money Makes Money Theme: Let them buy a share (or few) of stock/index fund in a UTMA account..The goal there is to, ideally, watch it grow over time.

Even if it doesn't, your realistic ROIs are going to be closer to 3%...might as well invest in an index fund at that point.

I like to use the Milken Institute's Best Performing Cities Index, which you can download for free from their website. 

Adjustable Rate Index: One Year T-Bill (1 Yr C T) Change Index: 2.75% Rate Change Frequency: Annually First Change Date: 11/01/2010 Int Rate not <: 2.75% Int Rate not >: 10.87% Maximum Interest Rate: 10.87% Interest Only Period: Prepayment Penalty Rider: No Prepayment Penalty Term: Mortgage Record Recording Date: 07/31/2001 Document #: 2001-222392BK-PG - Loan Amount $211,500 Loan Type: Unknown Loan Type TD Due Date: 08/01/2031 Type of Financing: Interest Rate: Lender Name Lender Type: Lending Institution Borrowers Name Vesting: Joint Tenants Prior Transfer Recording Date: 11/07/1989 Document #: 15463471 BK-PG - Price: $220,000 Document Type: First TD: N/A Type of Sale: Mortgage Doc #: Interest Rate: Lender Name: Buyer Name: Buyer Vesting: Seller Name: Legal description Abbreviated Description.