When investing (whether it be stocks, bonds or real estate) your investment doubles based on 2 variables.  

There are only two types of investing, one that relies on clipping coupons (referring to the coupons on Bonds) a.k.a cash flow, and one that relies on reselling to another buyer for a higher price a.k.a. capital appreciation.

Something about owning real estate that is just much more interesting to me than owning stocks or bonds.

Lending to an LLC, while not conclusive alone, just strengthens the business purpose argument.An owner occupied loan, among many other uses of the money, would be for a consumer purpose and subject the loan to the SAFE Act, NMLS, Dodd-Frank, RESPA, TILA, the CFPB, and an entire nightmare of additional acronyms and regulations for the lender.

Could I do better in a simple savings account, or in mutual funds, a 401K or stocks and bonds?

Here in Oregon, if a person owns a parcel of land in the name of an LLC, and decides to build a spec house on that parcel, even if the person is a licensed GC in Oregon, you are required to have a Developers license too and carry a bond and insurance. 

Once I have more cash and experience (5 years or so) I'd like to go into commercial real estate and property development.I'm taking the remaining amount of cash and applying it to stocks and bonds.

Take the advice of those who suggested that you get a licensed, bonded and insured mold remediaton specialist to do a complete and thorough inspectin even if it cost you a couple of grand for some rudimentary destructive inspection.

IN Orygun it is illegal to fix and flip without a GC license or a developers license and the subsequent insurance and bonds..

Make sure payment is on timeBe sure you do your due diligence before hiring, check references, licenses, bonds, etc.