Expanding My Rental Portfolio

[Brance Coleman]

I have been listening to BiggerPockets for quite a while, and everyone seems to make scaling a real estate portfolio sound straightforward. The reality for me has been much different, and I'm trying to figure out whether I'm missing something or if I'm simply still too early in the process.

A little background:

I currently own a short-term rental that grossed approximately $60,000 last year with around 75% occupancy. After paying the property manager, mortgage, utilities, insurance, maintenance, and roughly $20,000 in repairs (two hot water heaters, pool pump, outdoor kitchen repairs, and an A/C unit), I essentially loss in the end of the year although gaining equity in the end.

The property currently has:

• Mortgage balance: ~$276,000
• Interest rate: 3.75%
• Estimated value: ~$405,000
• Approximately 2,000 sq ft currently

The home is presently under a large insurance claim, which is allowing me to remodel and upgrade much of the property. Planned improvements include:

• New flooring throughout
  Getting the 1984 house up to code
• Complete interior repaint
• Outdoor kitchen remodel and upgrade
• Expanding a 6' x 20' balcony into a 20' x 40' elevated balcony
• Adding approximately 120 sq ft, bringing the home to roughly 2,100 sq ft

My hope is that these improvements will significantly increase both the property's value and its appeal as a short-term rental.

What I'm struggling with is figuring out how to turn one property into multiple properties. I feel like I have the work ethic, drive, and willingness to learn, but every time I run the numbers, it feels like I'm not generating enough cash flow to comfortably acquire the next property.

For those who have successfully scaled from one property to several:

• What did your first few years actually look like?
• Were you cash-flowing enough to buy the next property, or were you using equity and appreciation?
• At what point did you know you were ready to acquire another property?
• Am I in a stronger position than I realize, or do I need to focus on maximizing this property's performance before thinking about expansion?

I would appreciate any honest feedback. I'm trying to determine whether I need to be more patient, change my strategy, or if there are opportunities I'm simply not seeing.