Real estate is an inherently risky investment and if you are going to tie all your cash in one or a handful of properties you need to get returns greater than a diverse stock portfolio.

I would try to focus on a diverse economy with a growing population.  

This strategy can offer diversity and lessen some of the difficulties brought on by expensive markets.Networking and Professional Guidance: Make connections with Manhattan's real estate groups, investors, and professionals in the field.

Having a great team in place is probably just as important as picking a market with good underlying fundamentals (a diverse JOBS market (ideally recession-resistant jobs like in govt., education, healthcare, defense), population growth, desirability, affordability, favorable weather and landlord/tenant laws).

One of them is focused on the Pacific Northwest and the other focuses on the metal of the country, so there is some geographic diversity affect there, if you own both funds.

No ROI yet, but on average 7-8% cash on cash (with conservative underwriting).The reason I chose both was for diversity.

Another bonus is diversity: an area with lower owner occupancy rates will tend to be more diverse, so your kids will have the good fortune of being exposed to cultures other than their own.

Looks like you've got a very diverse background and I must say that so far, your contributions to the site have been worthy.

Wow that is a pretty diverse back ground you have going.Welcome.

Tips:  If you haven't found it already, you can find the Ultimate Beginner's Guide here.Set up keyword alerts so you’ll get a notice when a forum post mentions something you’re interested in:  http://www.biggerpockets.com/alerts examples: some of my keywords are Sacramento, Rocklin, Roseville, renovation, financing...For an eclectic mix of new ideas the podcasts are usually pretty diverse and an easy way to learn about aspects of REI you may not have considered.