i'd buy 4 houses. (Downpayemnts)
Actually, it may not be such a great time to buy up so much real estate. In my area, prices are at an all-time high. The market could sink a little. However, if you were to keep the properties for an extended period of time, it would be a good investment.
Personally, if I had $200K, I'd pay off my mortgage and put $70K away into investments. By not having the mortgage, I would limit my work-week to 3.5 days and have a 3.5 day weekend to do other fun stuff along with some volunteer work.
On another note, I received a termination from my employer of 16 years today. Between my 2 401K plans and my severance money, I have about $140K in pre-tax dollars. Also, I'll still get a pension from this company when I fully retire in about 23 years.