That's not my quote, but I live by it ;) I've invested in 14 syndications in the past several years with many Sponsors/GPs and have found it rewarding to have geographical diversification and passive income streams. 

I invest with a long-term time horizon and a 5-10 year time horizon with 13-16% IRR target would need to be achieved for each investment.Rule #4: Diversification to spread risk. 

However, in a diversification exchange like your anticipating you can use your proceeds in any way that you want. 

This is called a diversification exchange. 

Purchasing a large multi-unit is the exact opposite of diversification.

Overall, I'm sticking with turnkeys for diversification, equity buildup, and some cash flow with the goal of utilizing some of this to assist with funding my kids (4 and 1 yr old) college down the road.

Diversification works for a reason.  

A mutual fund gives you diversification across that group of companies/bonds that is more difficult and expensive to acquire if you bought them individually. 

The important things are to:1) Always think "diversification" to minimize the impacts.2) Always keep in mind the tax hit.

Diversification: I don't feel comfortable putting all my life savings into a million dollar house or all into index fund/ ETF stocks.