I an afford to sit on this property as its in the Yosemite AirBnb hot spot and don't need to do anything right away as its in a killer location.

If they have a 5 year lease that says "tenant may have 2 pitbulls" then you are in a hard spot and have to find insurance.

Build a solid foundation before taking a step up - each and every step of the way.There’s a way to scale recklessly and there is a way to scale safely.When OPM is involved safe is way better than reckless.Despite a life long career in RE, I scaled as followsBought a few duplexes for my own accountBought a fourplex for my own accountBought 12 units as a JV with some friendsSyndicated 43 unitsSyndicated 30 unitsBought another 12 units as a JVSyndicated 281 unitsThis was over a 3 or 4 year period.and so forth - now I am GP in close to 1000 units with $125M AUM.Even with all that, my sweet spot is 30 to 50 unit properties - they work best for my partners and I and more importantly our investors. 

I'd try to fill at least a few spots to get some income coming in, and then do a rolling conversion to MTR as you have the cash to outfit a unit with everything an MTR needs.

As it stands now, the sweet spot in that area in the market for rent seems to be a little larger 2/2 house with large living area for guests.

Is she correct or am I spot on?  

It doesn't take long to learn how to spot a good deal.6.

., you’re spot on and the condo conversion would be a good move but I think it might be too soon for that (I am a little more attached than my other properties since it’s my home).

You’re in an exciting spot.

He knows what he is talking about and he is spot on.