Property Investors Diversify Locally as Well as Internationally
By Saghir Aslam
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
Years of education, hard work and determination will likely leave you with a pot of savings at your disposal. Many tend to leave this hard-earned money stagnant in a bank account. But there are a few practical strategies that can be followed to make your money work for you as you seek to invest.
Diversification is the key for any investment and it is even more important for real estate investing. There are many different ways you can diversify locally in America. Let me list few different ways to invest: Single family homes, duplexes, triplex and fourplex. Each one has its own advantages.
As a beginner with very little amount of money, let me share personally how I started investing real estates in 1960’s. My First purchase was a duplex where as I lived in one unit and I rented the other unit. This means I did not have to worry about making payments as payments were coming from the rent to take care of my loan obligations and I was living with free rent. What can be better than this? No payment worries and do not have to pay rent. Doesn’t it sound great? Sure it is. It’s a really fantastic way to begin investing in real estate.
After this sky is the limit. You can invest as I have listed in the beginning of this article. Then you can move on to buying apartments, strip shopping centers, mini markets and you can continue to grow into bigger and better opportunities as they arrive such as larger apartment complex even upgraded better apartments and can move in to the regular malls. Keep in mind for real estate one golden rule Location, Location, and Location. Keep in mind the location and you win.
In last few decades in California we have had big price jumps in real estate at the same time we also had big decline in pricing.
There were times in 70’s when the market was so hot that you had to stand in line so your turn would come early to buy new homes. Almighty God blessed me I bought several homes while they had just to build. Holding the property with only $100000 down the house would be completed with next 6 months. Remember I had only invested $100000.I would go talk to the sales man on site who is selling homes for the company. Company is paying 1% commission to sell their homes. I would offer him 3% to sell my home which is now ready to move in. Whose home do you believe salesman is going to sell company’s home or my home? This is no-brainer naturally he will sell my home in matter of days. Market was so hard within 6 month period with hard real estate market thanks to Allah (S.W.T) I was able to sell each home with the profit of $10,000-$15.000.You can figure out the return invested $1000 for 6 month and making $10,000-$15,000 that’s many fold luckily almost unbelievable .I call this nothing less but Almighty God blessing. Bring at the right place at the right time.
I must share one other example with you. There was an apartment building on sale. We all know usually the buyer offers several thousand dollars less than seller’s asking price but I had learned from one of the seminars I offered him few thousand dollars than his asking price. He couldn’t believe it. He had to say yes but there was a catch. Catch was I will pay him very little down money which means my investment is very little.
I took the possession did some cosmetic improvement which caused small amount of money but made the property much more attractive. By doing so I was able to increase the rent. What does that mean? When you increase the rent you increase the value of property as rental properties are sold based on income.
In a very short period of time thanks to Allah (S.W.T) I was able to sell the property at a fantastic handsome profit.
There are many other strategies I will write about some other time. Meantime I want to share with you investing in UAE particularly in Dubai so this means you will not be diversifying locally but internationally. Definitely after Dubai you can go to other countries as well but mean time read below about Dubai next week.
(To be continued)
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)