Financial Planning for Single Motherhood

Chapter 2 - Where I am now

So – we pick up where we left off with me getting a good job, getting out of debt and buying my multi-family property.

My cute little unit

I moved into my fourplex and rented out the other three units. It is a building that consists of three studios and one itty bitty two bedroom. It isn't a flashy building, it doesn’t have parking, or even a washer dryer… but it's rentable!

I had all three units rented within one month. With the rents I receive, less my impound mortgage account and utilities I pay for the building my out of pocket comes to $383 a month.

So there I was, making $90,000 a year, debt free and living for $383 a month in my own property. You would think this would be good enough… but wait! It gets better!

New Job – New Property!

After working at the agency for a year, my same favorite person Minh, had another opportunity for me to work for him directly as a Project Director. It was a slight pay bump, but mostly it was a good opportunity to be part of a start-up and work with Minh again! Because they were a start-up I was brought on once again as a consultant. I liked this because I like getting all of my money up front (just make sure to save for taxes!!).

Phoenix Four-Plex

After four months working for Minh I had $35,000 in savings and was ready to purchase another property. I explored all my options and decided on Phoenix. I could purchase a fourplex there for as little as $100,000 (less if I wanted a fixer-upper). I found a fabulous little fourplex, completely renovated and occupied.

• I purchased it for $110,000. With all four units rented, after my impound mortgage account, utilities and property management fees, my take home after all expenses is $600 a month!

So now I’m making bout $90k per year with my living expenses equaling $383 and I’m making an extra $600 a month. How could it get better?!

Ironically enough two weeks after closing escrow on the Phoenix property I get pregnant!!

Back to Corporate America
I go!

The same week I found out I was pregnant I get a call about a job to work for a consulting firm onsite at Toyota. It’s through a friend and former colleague of mine. I’m not sure I want the job – I like working for Minh. But this job will save an hour a day commuting and the company is large so the benefits are a little better. I’m not sure what to do so I throw out a larger base salary - this time knowing I will not barter. They accept!!

So now I’m making over six figures, my commute is shorter, and the hours are better… and I work at Toyota which was on my list of places I'd love to work!

Where I am today...

So now I’m really set-up perfectly the way I am financially, but not in terms of comfort.  Although I love my little fourplex in Long Beach it’s missing four essentials for me: two big bedrooms and two bathrooms, parking, a dishwasher and a washer/dryer. Plus, my street can get a little loud sometimes – screeching tires and loud bass bumping out of cars are not ideal when you want to keep a baby sleeping. All things I can handle when it’s just me, but not as much as with a baby.

So I start looking for condos. My goal:  Keep the monthly out of pocket to less than $1500. Why? Well, combining the $600 from the phoenix property and the $600 I expect to net from renting out my current unit means $1200 a month. If I keep my expenses on the condo under $1500, I’m still only out $300 a month. :-)

New condo - closing escrow next
week!

As luck would have it - I found a fabulous condo just three streets down from where I live. I haven’t closed yet – so knock on wood people!!!

• My impound mortgage account plus HOA comes to $1470 a month and I’ll pay roughly $60 in utilities.
• With the profits from my other two properties my out of pocket will come to $330.

So now I make six figures at a good, stable company, I will own three properties, and my living expenses will be roughly $330 a month.

Note: This condo needs some love inside - popcorn ceilings, blue carpet from 1982, awful blue walls, ugly cabinetry, frosted swans on shower doors, Formica, and the yellowest kitchen you have ever seen! Stay tuned - I'll be doing a before and after post. Luckily Baby Daddy is amazingly handy and I have made some awesome contractor contacts in the LBC!

Once I am all up and running this set-up is how I can afford daycare, diapers, nannies, babysitters, etc. as a single mother. I didn't know this is what I was preparing for – but I feel very confident about how I set myself up.