Scaling out real estate investment portfolio

[Shrey A.]

Hi, I'm not a seasoned investor, but I'm curious to understand how the portfolio scales. I assume you use your equity that has built up in one property to buy the next. But math would tell me that unless my house price appreciates, the equity being built per year isn't that much, if I get 500 let us say in cashflow and 10k in debt paydown. I don't have an infinite pool of money for downpayments either. So I can buy maybe 3 more properties before I spread myself too thin.

so is passive or active appreciation required for scaling a real estate portfolio? Hence limiting the places you can invest in?