That might be fine if you want the diversification.  

All of these options require some kind of due diligence and action - but syndications seems to be the best option for lower risk, less active (especially after the investment) and diversification. 

This type of exchange provides investors with a way of increasing liquidity and diversification of their real estate investments, while deferring very costly capital gains and depreciation recapture taxes that may result from the sale of properties.

just about everyone wants cash flow, appreciation, and diversification.

Nothing wrong with a little diversification. 

Are you using it as a form of diversification in your current portfolio or are you wanting to use real estate to reach financial freedom?

We are looking at it more as a diversification from the stock market investments, so we would accept a low ROI as long as it's cash flow positive, but we have not found anything that makes financial sense.Here are the numbers we are looking at:  $500k house with 4 or 5 bedrooms.

Find one good management company for all your properties.Diversify -- buying in different areas, use multiple management companies.I think for a large portfolio (20+ properties), diversification will help stabilize the investment.

To me it is a matter of risk diversification. 

Really comes down to diversification in an economy.