You're absolutely right Mark, and it's a fair question. Basically... it's a risk I'm comfortable taking right now.
I do plan to diversify out of real estate quite a bit (and maybe one day hold no real estate in my portfolio, who knows), but right now I'm more or less going "all in" due to the (what I feel is a) once in a lifetime opportunity.
It's something I'm planning on doing over the next 5 years (subject to change) while in the accumulation phase and then moving on. There is the potential risk that Vegas becomes a ghost town and all my properties become worthless.
As a fallback, I hit fully vested in my retirement cola'd pension at age 47, so although I'm currently planning on being FI a decade or so before that, plan B lets me ER then with 75% of my salary (more than enough, as our current savings rate is way above 25%). I work 180 days a year currently (after you take out holidays, weekends, and winter, spring, and summer breaks). I love what I do, and may continue doing it after I'm FI. Doing it another decade if something goes terribly wrong with my RE plan doesn't sound too bad to me. And I have plans C and D as well, but I think plan A will work, so they're likely unnecessary.
In other words, yes, I'm doing something that has some risk right now, but I'm comfortable with that risk. Especially given my level of knowledge on the subject. I think the accumulation phase is when one should be riskier, because if it doesn't work out... you work an extra year. No big deal, unless you loathe your job.
If one gets too scared to take an opportunity because they fear a black swan event, I think they'll have a hard time succeeding in general.