They want diversification, RE, and are in it through more than just a cycle..

But he is supportive and agrees diversification is good.

Most fall at 12-13% CAP.As for your other options, Diversification is over rated. 

I just don't see the benefit in this vs. the risk of unsecured loans, regardless of size or diversification between quantity.

I try to make every Dollar work and putting money into my retirement accounts provides the benefits of diversification from my real estate investments.

If you want to extol the virtues of RE investing in Phoenix, you would be better served by pointing to growth rate, diversification of employment, redevelopment, etc. than the cost to purchase as historically higher priced areas have produced better ROI for RE than lower priced areas.  

It's where people want to be and job diversification is steadily increasing.

In a nutshell I have seen both RE and 401ks and love the diversification I have.

Some of my reasons for making this statement include:Changing perception of Las Vegas - from a tourist destination (“Sin City”) to a good place to live.Historical trends - The historical relationship between home prices and rental prices.The 2018 tax act.Changing Perception Of Las VegasI am seeing a lot of positive headlines like the following:Las Vegas Now the Nation’s Hottest Housing MarketLas Vegas may be the best city to retire in the USLas Vegas is booming again, and bracing itself for next slump - Diversification and the new Las Vegas School of Medicine.Headlines like these “legitimize” Las Vegas as a good place to live, not just a holiday destination.

This passive approach allows for the greatest diversification as you're investing across different states and in the fastest growing markets.