First-timer Goals

[Lisa Ryan]

I've been working on establishing what my goals are. The first time I spoke to my realtor she asked me if I'm more concerned about appreciation or cash flow. I told her I want it all. I want the property that's going to quadruple in value within 5 years and produce a $1,000 a month cash flow. Obviously I was kidding, but it was my way of covering that I didn't have a clearly thought out answer for her.

So here it is. I'm 23, single, with no kids and have a good job with a good salary and a well-defined promotion and raise schedule. That said, it's big 4 public accounting so the turnover (both voluntary and not-so-voluntary) are quite high, but I'm also confident that I'd be able to find another job somewhere between CC Philly and Princeton NJ quickly that would pay at least the same, if not more. With that said, I don't need cash flow now. Not that anyone ever companied about more cash, but I don't need money to put gas in the car or food on the table (set for 1). I've come to the conclusion that appreciation and a solid, reasonable cash flow is what I'm after.

Within Philly there are quite a few houses for sale for under 50k that produce very good cash flows, but the types of people attracted to those areas aren't who I want to be dealing with. It's great for some people, but I would rather spend more and be in a safer area and have a rental that appeals to a different clientele. Being a 23 year old 5`3 female, I do value my safety and don't want to put myself in danger.

Regarding timeframe, I bought my 1st house last January. This is the house that I live in and rent out 2 bedrooms for a combined $1,000 per month plus 2/3 of utilities. I'm submitting an offer on my 2nd house tomorrow and even if that falls through, hopefully within the next couple of months I'll have house #2. After that I plan on hanging low for a few years. The house that I'm living in could use about $10-15k of cosmetic upgrades (bathrooms being the main expense) so I plan on saving for that before saving for my next downpayment. The plan would be to buy house #3 right around 30 and call it a day. It's a very long term plan, but I'm already thinking about retirement. Have all 3 houses paid off by 55 and there's an extra $25k/year (in today's money) in passive income to supplement my 401k and IRA. It's definitely not a get-rich-quick scheme, but I think it's viable and will supplement my income & retirement.