@Matt Kitto, Commonly called a "diversification exchange, the process your talking about can give you a lot of flexibility in terms of how your cash is allocated and the type of asset you go into.  

I want to explore direct buy-and-hold real estate for additional diversification (at least learn enough about the subject to make an informed go/no-go decision about it).I owned my home in Silicon Valley for 33 years and sold it three years ago to retire to a part of the country where the cost of living is much lower.

That said, one of the primary reasons that I am interested in note investing is so that I can more easily obtain geographic diversification long term.I want to target a 15% yield per investment in order to account for the risk involved in note investing.Thanks again for the warm welcome!

For my buy and hold OOS I have come to favor an investment strategy that lets me buy into a portfolios of 10 SFR at a time, that provide instant diversification, and are co-owned by the managers for aligned interests.  

From my understanding REIT is influenced by the stock market whereas owning real estate is a much more different asset class from stocks and bonds allowing portfolio diversification.

It can also be safer to diversify your investment properties across the country/in multiple states, there are different real estate funds available to accredited investors that provide investors with hard real estate and some diversification. 

@Tony Nguyen I am a financial planner/adviser, and I believe in diversification.

It's really hard seeing how well people are doing with cashflow properties :(Other assumptions:- I have the funds to buy here in the Bay, although I don't want to gamble on further appreciation, I really like the idea of cash flow- Other than building wealth, another main goal of buying an out of state property would indeed be diversification from the stock market, which is wise in my opinion considering the crazy run of the past 7 years- I am aware there are other passive options such as investing in debt deals via crowdfunded portals, but those to me just seem a meat marketplace, plus you don't recoup any of the advantages that come with leverage, tax efficiency and building equityThanks

In fact, we've started adding SFR's to our properties for some diversification. 

Thera are many other regional and local variables to consider (development costs, regulation, city politics, crime, diversification of jobs types/primarily services and tech, educational institutions, state capitals, cost of housing, path of growth, makeup of neighborhood / owners VS renters, etc..).