I found his logic persuasive myself, but it would concern me to have so many eggs in one basket when conventional wisdom tells us to have financial diversification.

(I understand diversification)

4 plex gives you wonderful diversification

Diversification of the types of units you own and staggering of leases, just like what Bill Gulley said.Personally, I always try to be conservative with my cash reserves because running into a pinch would be a worst case scenario and if I find a new property I like, I want to be able to move quickly.

Coastal counties have little economic diversification and the millage rate reflects that tourism is IT. 

I would keep your money in your Roth so you have some diversification and aren't 100% invested in RE.While RE is my bread and butter as well I max out a Roth yearly and a work 401k as well to create additional truly passive income.The other thing not mentioned is while a Roth is a home run as far as taxes go, a traditional can still be beneficial to the RE investor who has W-2 income of under 150k as with a traditional IRA you can deduct the 5500 against your  taxable income allowing to maximize the 25k passive loss allowance.

Overall, in terms of asset options, Opportunity Funds offer investors a greater number of choices and diversification potential than 1031 Exchanges.But, it’s worth noting that Opportunity Funds must also adhere to restrictions regarding the types of real estate assets that can be included within the funds.

:-D  Then again, if you know anyone good at the stock market, consider putting some in that for a bit of diversification. 

@Mike Hartzog@Bob Malecki  I still think 95% of folks that want to jump into this stuff should invest with you guys in your funds and shawdow and see how it all works before attempting on their own.. and or for diversification purposes..

I also understand the importance of diversification and respect the long-term annualized rates of return in the stock market over the last 50+ years.I suggest reading Lifestyles Unlimited's article on 'How 22 rental properties can retire you faster than a 401k' and their previous article on 'How 15 rental properties can retire you faster than a million dollar 401k'.As fellow real estate investors, I was wondering how others approach this situation.