To provide diversification, and not put all my eggs in one basket, I could spread the $1m out into 20 different deals at $50k each, with different lead investors in different real estate markets across the country. 

I didn't realize that since my goal is to use my cash to diversify my investment portfolio then taking out a 15 year loan just ties up more of my cash each month, thus slowing the diversification!

And when you get into 5 to roughly 15ish units, you start to hit lending pros and cons too, but then get better terms over $1mm loan balance.SFRs:- Tenant takes care of landscaping, typically- Often get higher rent per unit, assuming similar size, quality and areas- Tenants often stay longer- If owned in personal name, better financing options through Fannie/FreddieMulti:- Depending on size (meaning larger better) economies of scale- Again, if large enough, better ability to drive value through operations- Scale portfolio faster through more units coming in at one time- Revenue diversification through multi-units and no "all or nothing" occupancy like SFR- If under 4 units and titled in name, still available for agency debt- If owned through LLC, and large enough, can be easier to finance and doesn't show on your credit report- Typically once over $1mm loan balance, non-recourse debt is available, with bad boy carveouts

If the area has constant population / labor outflow, the prices would naturally depreciate, on the contrary more desirable areas with better economics and new employment opportunities naturally spike realty value growth. ( however important to look into diversification of major employers not to get into Detroit situation)I would look into state first with good economic growth, then dig into counties and narrow down to town profiles ( unemployment rate, poverty rate, schooling, budget proficit / deficit )Prices approaching 2007-2008 marks in certain areas may indicate soon-to-come market correction, so comparing those years data to current may give some insight as well.Good luck!

The diversification aspect of that versus putting everything in one apartment building investment is appealing, but I am attracted to the income potential of apartments. 

I am also invested in a couple of large Class C apartment complexes through partnerships, but I don't have to manage them and because of tenant diversification, the risk to our cash flow from a single bad tenant is insignificant.

Any financial education around investments typically involved a balanced approach and concepts of diversification.

I also have read that another potential benefit of this approach aside from the increased cash flow is the diversification of risk in the sense that it is unlikely that something major breaks on many of the properties at once, yet you are actively saving from the monthly rent from each unit as if the expenditure will occur (CapEx, Maintenance, Vacancy etc) I don't necessarily have a specific dollar figure in mind but it would be nice to get to the point of being able to generate $2,000 a month initially which would allow my wife to stay home with our young children and still be able to steadily save and make future investments. 

I want to see some industry diversification so if one goes out, your investment should stay relatively safe (versus a market that only has one main industry)- Population.

I totally agree for diversification.