However, with 23 of the top 150 metros reporting job losses, careful market selection becomes critical.Geographic diversification is no longer optional.

We would call that a diversification exchange. 

diversification and cash flowSan Jose, CA has been very appreciation heavy... and i'm not opposed to keeping some property here, though the multi-family / commercial real estate has very low cap rates, and low growth from what i'm seeing.

The reinvestment” can be in improvements to property you currently own, or, if the ROI is greater, or diversification lowers risk significantly enough, new “deals” that you invest in. 

That's why I say purchase one for diversification and the perks.

Oftentimes, investors will do what we call a diversification exchange and sell large investment properties and reinvest the proceeds into multiple smaller investment properties tax-free, and even structure your next deal using a few of those strategies @Drew Sygit provided.

I love the diversification aspect, as we have invested in large commercial multi-family, trailer parks, hotels and even a steel manufacturing plant.

.• Geographic diversification?

I also learned RE is a diversification strategy for long term wealth building, not a way to build enough passive income to live on the beach forever. 

Slides are presented one by one including one titled, “Norada Capital’s Diversification.”