Once I’ve gained rental income, I would like to finance a Condo and even more rental properties with my income from rentals.

This status is important because it allows you to treat real estate losses as non-passive, meaning you can offset them against your W-2 income or other active income.If you don’t qualify, real estate investments are considered passive income by default, and losses can typically only offset other passive income, not your W-2 income.

However, past performance of appreciation is not necessarily indicative of future gains due to variables within each market.

What is your potential appreciation gains and how far out?  

My goal is to invest this capital into multifamily residences (as few as possible) to replace my active income completely with passive income. 

. $12K passively invested in the S&P (literally just buy the index and do nothing else) yields an 11% annual historical return.

Regarding the most effective way to scale a real estate portfolio, it really depends on how passive you'd like to be, your chosen market/s and risk tolerance. 

Real estate investors are attracted to medium-term rentals to gain the benefits of extra cash flow versus long-term rentals while avoiding regulatory risks, high turnover, and intensive management of short-term rentals.While many investors are now turning to medium-term rentals to build their portfolios, the lending world has unfortunately been a little slow to keep up.

I had a back surgery at 34 years old, and ultimately I want to be passively investing, my sweat equity was the only capital i had to get started, so I utilized it well.I also became a licensed and insured general contractor in the state of Indiana and the income from contracting was used to further invest.

You might lose more than the taxes if you’re in the 15% capital gains bracket.