I think leveraging the initial property even further with such tight margins is a train wreck waiting to happen. 

Even without those challenges you had, it was still probably hard to find a buyer because of the use mix.  

My advice: don’t overthink it—your first house hack is about learning, so pick a strong rental market, ensure solid demand, and lock in a deal that gets you close to break-even or better.

Meaning, is there a way, maybe even after my 2nd purchase, to only use my properties to continue to scale?  

Good luckNot even sure what you're saying - sorry.

It is something I am interested in doing in the future, potentially even this year, but I am curious how to put concrete numbers to this decision.  

If I had to leave a takeaway from this post before getting too far in it would be that whatever goals are had you have, we have these goals for a reason and typically it does not go exactly as planned but even if it doesn't go as planned, we can pick up where we left off and give it a fresh start.

In southern CA, even garage conversion ADU additions are typically costing more than the value added.  

Thank you once again and have a wonderful evening, I cannot wait to network and to help each other one way or another. 

Those were the situations where I was looking for ways to make it work.Don’t come out the gate haggling, or even discussing the terms at all.