The Time-Proven Way of Becoming a Millionaire
By A.H. Cemendtaur

Khawaja Ashraf

There is something seductive about ownership. Man wants to own things. And for most people the pinnacle of ownership is buying a place they can call home. But increasingly people have started looking at a house beyond being just a place to live; property is an investment. Talk real estate these days and people gather to listen.
A lecture arranged by Koshish Foundation on ‘Buying and selling real estate’ attracted an audience of Pakistani immigrants, majority of them renters, interested in living out their American dream. The lecture arranged under Koshish’s Knowledge Exchange program was given by Dr. Khawaja Ashraf, editor of the online PakistanWeekly.com.
Dr. Khawaja Ashraf who is mostly known as a community leader with strong political views has been dealing in commercial and residential real estate for the last twenty years. Ashraf spoke in a casual manner sharing real life stories with the crowd. The mother of all such stories being how he got his first break in business. Very early he realized that through work one creates wealth, he told the audience.
“It is better to work for yourself, so that you create wealth for yourself instead of making someone else rich.”
Having also realized that the economic system in the US favored corporations and businesses Ashraf decided to be in business. He didn’t have any capital so he opened a reproduction business -- without any copiers or printing equipment -- by registering at the city under ‘Action Copies’ and putting a sign at his apartment mailbox. His friends would make fun of him telling Ashraf there was not much action at ‘Action Copies.’ His friends had to eat their words soon. One day a city administrator looked him up in the phone book and called to check if ‘Action Copies’ could produce one million facsimiles of a document by next morning and deliver them at the court at 8 a.m. Khawaja Ashraf said he could. The administrator was happy to get the affirmative answer as she had been calling reproduction facilities and getting negative replies. She asked if Khawaja Ashraf had a big operation with a lot of copiers. Ashraf told her he didn’t have a large facility but that he should be trusted to deliver. On obtaining the document from the city Khawaja Ashraf quickly made 30 copies of each original. Then he went to 30 different reproduction facilities in the area and gave his order for the highest number of copies each outlet could make by next morning. In the morning he rented a U-Haul truck, gathered copies from the 30 copy shops and showed up at the court at 7 a.m. The customer was delighted to see him an hour earlier and delivering what he had promised. That deal alone earned Khawaja Ashraf a net profit of $30,000. He used that seed money to buy a small place in San Francisco to house his copy shop. Ashraf has never looked back -- always willing to go the extra mile and sagaciously investing in business ventures and real estate.
Talking about real estate, Khawaja Ashraf told the audience he never took a course on that topic - his knowledge was based on personal experiences.
“Never lease, always buy. Don’t rent a property, buy your own.” Ashraf passed on the advice to the audience one Mr. Chin gave him soon after Ashraf landed in the US as an immigrant.
“If property is too expensive in the area you presently live in, buy it somewhere else. Drive the extra 30 or 50 miles. But if you want to reach financial independence do buy property as soon as you can. You should buy a property that you can afford to pay monthly payments of. The money you save in taxes is worth buying property. In fact you only pay the down payment. Because the mortgage is mostly interest, it is tax deductible - in essence the government is paying for your property.”

A section of the audience

Ashraf said having a business and buying property using the money made in business was a great idea, “as the tax on business revenues is offset by the mortgage interest.”
He urged the young audience to take risk as the time was on their side. He encouraged people to use the incentives government has created for first time homebuyers.
“The type of money you make in real estate you cannot make anywhere else.”
Ashraf said he never buys a property at the spur-of-the-moment.
“Take your time. If you like a property, go and see the neighborhood at different times of the day. Go there at noon, then go there at night; you will learn about the environment the property is located in.”
Hinting on the power of knowledge Ashraf asked the participants to attend city council meetings of the area they are interested in buying property in.
“City council meetings are open to all. Benefit from the knowledge. Because it is in a city’s interest to make itself more desirable to live and work in, cities do go through schemes of restoring neighborhoods. Property values increase when a neighborhood is cleaned up, trees are planted, roads are repaved, and new streetlights are installed. Keep an eye on such projects so that you can invest at the right time.”
“If you live in a house for two years you don’t have to pay any capital gain tax when you sell that property. A lot of people are taking advantage of this law. They go to a new neighborhood, live in a house for two years, then sell it, buy another property and live off the equity they had built on the first house. They keep repeating the cycle.”
Ashraf also spoke about the variations in housing markets.
“Housing markets are not homogenous throughout the US. You can have great regional variations. When big businesses move they take a lot of people with them and such an activity creates peculiar housing markets. You should be aware of such situations and use this knowledge to your advantage.”
Khawaja Ashraf did not think the inflating housing market was the classic case of an economic “bubble” destined to burst.
“Unlike stocks, property is a tangible asset.”
He thought the housing market may take a downward turn but homeowners need not worry. They would have the option of waiting till the market bounces back.

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