IMO, it's not about increasing cash flow, but adding services to make your rental more desirable than others.

Decas manages a lot of houses for local and out of state investors and seem to do a good job.Mega Agent Rental Management - Located down 280, Mega Agent Rental Management, much like Alabama Rental Managers, manages a lot of very desirable homes.

Your market will determine whether the extra bed/bath ( my guess) or the garage is more desirable, but get it permitted if you convert.

Asking if this is realistic, is hard for anyone to answer except you, because no one actually knows your drive and your willingness to put the effort forward to achieve the results you desire."

It seems like a lot of houses for sale get multiple offers and sell above the listing price, especially turnkey homes in desirable neighborhoods.

We are sitting on the money while we sort a couple things out which will allow us to get our budget higher to our desired range for the next property, but I like having the option to buy at any time because the money can be withdrawn when needed.

I came to the conclusion that I needed to have my own management company if strong success is the desired result. 

I have several offers in on properties throughout Philadelphia and know for a fact that I'll get a few accepted or counter offers close to my desired purchase price.

From there I'm planning to renovate distressed properties for buy and holds out of state for cash flow purposes because as @Mike D'Arrigo mentioned cash flow in CA leaves much to be desired.

Are you sure you can't reduce the improvement budget and still offer an desirable product?