Do you balance your portfolio?

[Michael Duncan]

Aloha from Hawaii,

Background: 

I currently own 2 properties in Hawaii. One is my primary residence and the other is a rental property. I also have a rental in Michigan. The properties in Hawaii do not cash flow very well, but they have a high likely-hood to appreciate quickly. The property in Michigan does not appreciate much, but it cash-flows nicely. My goal is to eventually reach $5,000 a month in passive income.

My thoughts: 

In my opinion, buying a property solely for the purpose of expected appreciation is very risky, but they can pay off well if you win. Slowly purchasing cash flowing properties is difficult to replicate due to most of your equity being tied up into the properties. Does anyone take some risks by purchasing appreciating properties and then selling them to purchase cash flowing ones? Or do most people force their appreciation rather than waiting for the market? Just genuinely curious how others have used or avoided these strategies, mahalo!