Personally, I had a very strong portfolio prior to ever purchasing a rental property which provided me with diversification as well as something to fall back on if I was a total failure and needed some cash.

I personally think that diversification is the name of the game.

Smaller notes provides diversification and maturity distributions over time, doing a half million on one deal and holding it is not my in my comfort zone, even though it could take less attention than 3 or 4 other deals.

Diversification is fine but if you are in the RE business as a profession, your money may do better if you invest in what you know rather than hand it to Wall Street.

(diversification should spread risk, shouldn't it?)

I would like more diversification though.

Multifamilies in Miami Beach are very expensive and usually purchased by foreign investors for wealth preservation and diversification purposes, and sell for very low cap rates.

I am all about wealth diversification.

Diversification is the way to lower risk.  

As stated above @Randy Johnsonthe model is very hands off and allows for diversification through a portfolio of ten properties.