In terms of the type of investment, multi-family properties often provide more income potential and risk diversification compared to single-family homes, although they might require more management. 

Follow rule #1 of investing - diversification.

That might be fine if you want the diversification.  

The model you should go with will ultimately depend on what the group is optimizing for (cashflow, appreciation, tax optimizations, diversification, and maybe even a little bit of social value doing something fun, potentially lucrative, and unique w friends).  

Reason I mention it is for diversification.

And I feel the ideal portfolio can benefit from the diversification of both.I feel directly owned properties are great because they give me maximum control and the ability to tweak them exactly how I want.

Many would suggest against RE investing using retirement money but if you go into low risk opportunities it can be a powerful diversification method.

Diversification is KeyFlipping homes is just one piece of our business.

This idea of diversification is a very tricky philosophy to me. 

@Arthur Savery, This can be a great game plan called a diversification exchange.