That way, you are able to increase your rental unit counts for passive income and diversification of assets while still keeping the large profitable flip business going. 

You can also limit the leverage(risk/reward), but at the cost of diversification.

I think a little diversification might be needed shortly. 

Much like buying cash flow; however, diversification is a good thing and I enjoy the business.I'm building two new SFH rentals 3BR/2BA 1100SF, $140K each. 

There’s no safety in diversification with smaller properties and that strategy can actually work against you as vacancies are more meaningful on a smaller property.

@Tom Maricle I’ve always been a fan of diversification.

I would always lean towards diversification.

I definitely like real estate more, but, I am a huge fan of diversification.

A REIT will give you more diversification than buying into a turnkey operation and should be lower risk.A turnkey approach with $400k could yield a handful of properties with no leverage or at least double that number with leverage, assuming you qualify for the leverage. 

For me it is about diversification.