Our rents don't increase at the same rate as you go up the property sales price scale.  

Smaller scale syndicated deals with 10 or less investors still manage to provide a small sense of involvement without the hands-on risk of running the flips/rentals/etc.

I may be interested in picking up one building, 6-12 units- but how do I scale that?

Assuming I understand what you are asking, I do something similar with many of my purchases, although on a much smaller scale.  

We recently started a private equity fund to raise/pool capital to buy larger pools of notes and scale up the business now that we have our basic operations established.

It's a long shot at this point, but I currently own a 4-unit bldg here in San Diego, and am working on a possible 1031 exchange into a 14-unit building also here in San Diego.Aside from the obvious differences in scale and financing, are there any laws, pitfalls, difficulties, etc that arise from owning commercial that aren't present with residential multi-family, particularly as it pertains to the People's Republic of California?

To be upfront about it, the bank is in the middle of a merger with another bank and the guys at my branch weren't aware of all the new changes/limitations imposed under the merger until my package got sent up for approval.So, we were originally going to re-fi 3 properties to leverage the equity to purchase 3 more.  

Unless you intend to be a syndicator on a large scale  or l/o pro like our friends above ;),  save money and put some skin in the game.  

Neal,To be fair with Brian Adams post I am not certain but it appears from his profile that he is a syndicator ( meaning he has investors that are passive partner with him ) to acquire properties.That is a whole other discussion and topic from buying directly as a single purchaser and owner.The dynamics of syndicating and reporting are different than being a direct one person owner and scaling up.

you can still build economies of scale if you have enough small houses, if they are close by each other