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