And of those 5 , four are already rented long term, one year leases, and the fifth one needed some rehab but is almost ready to rent.But buy and hold and rehab are not my only diversification.

Notes can open up different strategies for deferring or offsetting income, depending on whether you’re holding them directly, in an entity, or even inside a retirement account.Curious to hear—if you’ve looked at notes, was your motivation mainly diversification, or more about avoiding active management?

@Ian Russell, this strategy is what we call a diversification exchange.

Like any alternative investment, you need to look closely at the management team, business stability, track record, and asset diversification.

For most real estate investors still in growth mode, tying up cash in something slow and expensive doesn’t really help you scale.But… if you’re already sitting on strong cash flow and looking for diversification or a legacy planning tool, it can play a role.

While I think RE offers excellent diversification I wouldn’t say it is the most reliable path to long term wealth especially for physicians because of the time required.

Both single-family homes (SFH) and small multifamily (MF) can play a role in a successful portfolio.Single-Family Homes (SFH): Typically attract longer-term tenants, easier to sell when you exit, and often lower maintenance (fewer systems to repair).Multifamily (2–4 units): More income diversification (if one tenant leaves, you still have cash flow).

Hitting either number is tough for most people.AdvantagesNear-instant liquidityEasy to start with small amountsValues are simple to trackDisadvantagesYou must consistently beat inflation and ride out crashes for your drawdown period, which even the best money managers are unable to do.Allocate time to monitor the markets and reactLimited tax advantages, little or no leverageMonthly withdrawals reduce principal and make diversification more difficult.RentalsWith rentals, my goal is to own enough properties so net rent replaces my paycheck.

Worry about diversification later. 

Be careful with pre- or post-exchange cash-outs, related-party loans, or refinancing timed too close to the exchange.7) Practical deal points.Lender & consents: TIC conversions almost always require lender approval; fractional ownership can trigger tighter reserves and covenants.Governance: Use TIC and property management agreements that avoid centralized, partnership-like control and keep voting rights balanced with true co-tenancy.Securities overlay: Syndicating TIC or DST interests can implicate securities rules—coordinate with counsel early.UPREIT vs. 1031: Rolling into an UPREIT via §721 units is a different deferral path with its own pros/cons.Common pathways that work:All-in exchange: The LP/LLC sells and that same entity acquires the replacement; cleanest when everyone’s aligned.Pre-sale TIC carve-out: Those who want autonomy receive deeded TIC/SMLLC interests well before closing, then 1031 independently; the rest exchange inside the entity.DST replacement: The entity or the separated TIC owners exchange into one or more DSTs for diversification and smoother financing.If you share a few specifics—entity type, state, lender requirements, member goals, leverage, and target closing date—we can map a timeline (including any seasoning), model the boot/debt requirements, and choose between same-entity exchange, pre-sale TIC carve-out, or DSTs with confidence.Jason — appreciate the CPA perspective and I agree on the basics.