In other words, diversification on a small scale (actually, within a small market space), with a cash and effort focus on the strategies that are working today.

I believe diversification is huge at the start.

We're seeing many of these types of diversification exchanges from appreciation to cash flow markets.  

I would recommend you check those out and allocate your capital across projects to get some promoter and geographic diversification.  

Always good to have some diversification in the portfolio!

@Chris LibbyYou may not do what you propose.While a self-directed IRA is capable of investing in real estate and holding mortgages, the IRA may not transact with you or close family viewed as "disqualified parties" by the IRS.If the IRA is investing in real estate, it is all about diversification for the IRA. 

There is also a point to be made here about diversification.  

There is lots of good information on these plans here on the forums.In all cases, investments in real estate are purely a diversification play for the tax-sheltered retirement plan. 

Diversification is a way to protect yourself against Losses.

Diversification is great... risk reduction... but the question is, do you have the time and skill to diversify well?