Over time, the value of the real estate may increase, allowing the capitalist to sell it for more money than they initially paid for it.

Thus, the capitalist ends up with a greater sum of money (M’) than they started with.

You mean "may end up," right?

Marxists never talk about unsuccessful capitalists. The capitalist in the Marxist tale always makes money. Out here in the real world of capitalism, that's not what usually happens. What really happens is that workers hire capitalists to provide the wherewithal for them to earn a living, The workers take the first dollars of revenue, because they need it. The capitalist takes the last dollars of revenue, if there are any, because that's the trade he made. That's capitalism. The Marxist version is just resentment on stilts.