Most of those types Pension Funds, Insurance Companies are investing with REIT's.The institutional money typically only invest with the whales for what they tend to perceive as ultimate security and low risk.I talk to REIT's all the time looking for off market properties for my clients.

You can invest it in real estate, stocks etc. my cup of tea is investing in mortgage notes where I know a lot of passive investors use their IRA to invest because it is mailbox money when your buying performing notes and typically they have plenty of equity and provide double digit returns

Cap rates have some flaws, but they are one of the good measurements of real estate return.It is fair to include closings costs into the purchase price, to determine your cap rate. 

Working for a developer and having done many deals where we operate and manage and have investors the deal is typically a water fall where.

I wanted to know what the cost is associated with changing the zoning of the property and how long does it typically take?

It may turn out that that it is a typical bill ($80/side).

Once I started taking on rehabs everything changed.My bread and butter was typically buying homes around $100-110k, putting in around $20k +/- on the rehab and driving ARV to around $150-170k. 

From my experience, I have seen that investors typically start off with SFR before jumping into a multi-family project.

The seller pays realtor commissions not the buyer typically.

You can typically only hope for appreciation here.