My story:
After graduating with a degree in ID, I moved to Chicago, a new city for me. I went to all kinds of networking events, meet ups, anything that smelled vaguely like industrial design. Also applied to every open ID position in the city. I made a big spreadsheet of every design studio in Chicago and just went down the list, either finding connections via LinkedIn or just cold-emailing. I was able to get some interviews here and there, but nothing panned out.
At one designer meetup, someone told me about a makerspace/incubator downtown that was specifically geared toward physical products. I hadn’t heard of it before. I ended up connecting with them and becoming sort of an in-house design consultant, helping develop the space itself while also doing freelance projects and revamping my portfolio. This was how I first got my foot in the door. Makerspaces are great communities where you can be around other people making things, and I definitely recommend joining one. Developing just a little bit of professsional experience made a world of difference when talking to potential employers. Six months later, I got hired as a full time IDer at a small company that creates its own physical product brands. But it all goes back to that one meetup! One interaction with one person.
Advice for you:
I haven’t actually been in the industry for that long, so take this with a grain of salt… Two things. #1, it’s all about the portfolio. Sounds like you already know this. Everything else is irrelevant until you have a solid portfolio of projects to show people. #2, it sounds like you have some solid engineering experience. Why not apply for Design Engineer positions at companies that also hire IDers? While you might not be doing hardcore ID work, like sketching, you’ll still be part of the creative process and work closely with IDers. Design consulting firms would be a good place to look. Good luck!