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Loving Muhammad Series 3: Episode 5 | Invest with Intention

Shaykh Alauddin ElBakri (unverified)

Transcript

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It's
[Music]
good. Okay.
So I intend Ed not to take more than
five to seven minutes from your time uh
just to lay you know always enrich
ourselves with the hadith of the prophet
sallallahu alaihi wasallam and um we're
constantly talking about you and the
workplace and also you and your
relationship with
wealth. How do we Muslims look at
wealth? How do we value wealth? Why is
it
valuable? So, alhamdulillah, we've been
going one class today is the fifth
episode
uh in in on this
journey and we've been learning laying
mindsets and I'm big on this idea of
mindset. Your mindset determines how you
make choices, how you make decisions,
how you speak, how you walk, how you
talk. The mindset is the most important
thing. And and when you read the Quran
and read the hadith, you it will find
you will find that it's changing the way
you think. And that has to change
first. Not only the way you feel, but
the way you think. And we live in the
Silicon Valley. We are in the state of
California. The Silicon Valley, the talk
of the town is money and
wealth and startups and making more
money. And did you make 10x or 100x? How
much did you multiply your money? So
this is the talk of the town and you
guys are many of you went to school
here. You're working here. You're
surrounded by that conversation.
You need to build your own conversation
in your head based on the Quran and the
Sunnah of the Prophet sallallahu alaihi
wasallam. And
um just a quick reminder for something I
said
before from what we can read in the
Quran and in the prophetic way, you
divide your wealth into four sections,
not equal but four pockets. One is your
daily spending and monthly spending. And
for that Allah said seek the middle
ground. Don't be stingy and don't be
extravagant for Allah does not love
those who are extravagant. So be in the
middle. Second pocket is
savings so that if something happens to
you, your family have something to live
on and to
survive. Three is your uh
reinvestment. You need to
invest. And why? So that you can grow
your wealth. Why do you want to grow
your wealth? So you can pay more zaka.
So you can pay more. And so that you can
help more Muslims and create jobs for
more people. And that becomes the
um the the heart of the matter. To us,
wealth in of itself is not valuable in
the Quran. If you find like if you're
just trying to achieve wealth for the
sake of wealth, so many warnings in the
Quran. So you have to want to have
wealth for a bigger reason than
yourself, a bigger reason than your
immediate needs, a bigger reason than
indulging yourself in luxurious
life. There has to be a bigger reason.
Otherwise, you're straightforward
seeking and forgetting about and Allah
told us there's people who will
say people will say Allah give me this
world. Give me this world and you will
have nothing in the
hereafter and there is amongst people
that who
say those are the believers. So um
subhan Allah there is a hadith I wanted
to mention
it and this is in Ahmed
and in which the prophet sallallahu
alaihi wasallam
said
another what a good
match between good wealth
What is good wealth? Halal wealth did
not harm people. Not built on cheating
and lying and stealing. Not built on
interest. What a good match. Good wealth
with a good person. Which means when
good wealth is in the hands of a good
person, he's going to use it for
something good. And that's going to
benefit the whole world, not only
Muslims. He's going to do something good
with it. So it's a it's a beautiful
hadith and the prophet sallallahu alaihi
wasallam was in a conversation with a
sahab. He said I'm going to send you on
this trip and you're going to make a lot
of money. He said yeah Allah I did not
become Muslim to make a lot of money. I
became Muslim for Allah and his
messenger. He said that's okay.
What a good match, good wealth with a
good
human. So the prophet sallallahu alaihi
wasallam went answered back the Sahabi.
He said, "Oh, I'm not here to for the
wealth." He said, "That's okay. It's
good for you to make good wealth."
Um when it comes just one thing, it's
very interesting how times
change. Our sister here will talk with
us today. You know two days ago uh a
brother saf came and talked about
finance nia how can you finance your
house in a halal way and he offered you
a model but today how can you
invest in real estate even if you think
you cannot invest in real even if you
think I don't even have I can't buy a
house I don't have a million dollar I
don't even have the down payment for
that we we will learn today how
inshallah you actually can have a halal
non-interest way and you might not know
about it. I'll tell you one
thing. I wish when I came to the US 25
years ago, someone told me just she just
give me like5
$10,000 and forget about it and meet you
after 30 years. I will invest it for you
in real
estate. That 510,000 would have been
$100,000 now. I wish someone did that
for me. And what I want to educate
Muslims because ownership to own your
own house and to have investment
property is very important for us and
Muslims and for the strength of Muslims.
But I believe that like in my wild
dreams I dream of like there's a fund
and even a high schooler will put $500
and we'll invest in real estate and some
big shots will manage that fund so that
everybody can participate in this.
Right? You got to you you know one of
the beautiful things they say in America
and it depends why you're saying it.
They say don't work for your money. Let
your money work for
you. Oh, that's music to my ears. If my
money can work for me and I can go and
do all of my dawa and all of my reading
and all of
my traveling and all of this and sign me
up for that. Right? So this is the
thing. One interesting thing land at the
time of the prophet sallallahu alaihi
wasallam had zero value. Land was not
bought and sold. What is on the land was
valuable. If you have house on the land,
you sell the house. You don't sell the
land. Nobody buys and sells it. And this
concept was also with Native Americans.
They didn't understand the concept of
selling the land. To them, they're on
the land belongs to God.
If you have a farm on the land, the farm
is worth money. The land is not worth
anything. If uh for some reason there's
no more farm on the land, nobody's
interested in the land. So at the time
of the prophet sallallahu alaihi
wasallam, land itself was not bought and
sold. Today it's bought and sold. That's
fine. But at least it's it's a piece of
information that I want you to have as
times change. And now it became a big
discussion. If you own a land, how do
you give zaka on it? So that became a
discussion because there's nothing in
the sunnah that talks about that. Talks
about similar things but not about
owning land per se. So with that just
few ayat and few
hadith. Why do we want to make more
wealth? Because
wealth is the
means to establish what Allah asked us
to establish on earth. Wealth is the
means, not the
goal. Wealth has rules and regulations
that makes it halal, not haram. So with
that um I want to pass it on to sister
Sadia and for us to talk to us about her
uh you know ideas and and and mashallah
she has dedicated herself to this work
sister for coming may Allah bless you
quickly you're a software engineer you
just not long ago you resigned from
being project manager with T-Mobile
so that you can go full-time on this
thing. And I was one of the people that
encouraged you to do that.
Alhamdulillah. I'm glad uh you're doing
this. And um you were born and raised in
Pakistan. You're married. You have one
boy, one girl. Mashallah. So she managed
to be a parent. She managed to go to
school. She managed to be a wife. She
managed to do many things. Mashallah.
her husband is here and they both are uh
investment gurus. If you want any advice
about investing in the stock market
after we're going to do like question
and answer collectively and
individually. So we have sister who's
going to do the presentation but if you
want a word of advice I also recommend
talking to her husband brother
Azim. I'm going to turn this to you and
you can take it from there inshallah.
Asalam alaikum. Uh, can you hear me
well? I think they can hear you but not
well. Can you hear me well? Shall I
speak louder? You have to put the mic
up. Okay. Is it better? Yes.
Okay. Is it better? Oh, now it's better.
It's better. Yes.
All
right.
Asalam alaikum everyone. Thank you so
much Bakriaso Institute and Yasin
Foundation for hosting this evening
tonight. Uh I'm really privileged and
honored to be here and sitting right
next to Sheikh is our teacher for a long
time. Not for myself but for whole my
family. Mashallah my children grew up in
his company in his halakas and myself as
well. We have been attending his alakas
from last decade around a decade at WVMA
and have been alhamdulillah been blessed
to have him in our community. Um and
just a little bit about myself I grew up
like said in Pakistan Karachi
Pakistan um I graduated from ND
University um Karachi with a bachelor's
of computer systems engineering. I got
here when I got married aim and I have
about like almost 18 years of working in
the high-tech here in the Bay Area. Um
while we were uh raising our childrens
we realized that a need of halal
ribbafree some income side income not
just our primary income which we work 9
to5. So and I've always been passionate
about real estate. I was always thinking
about the strategies what if if we do
some alternative investments but always
the problem is always the price loans
leverage of loans and all that. So we
wanted to keep our family free from debt
for our ch for our child education
keeping all these thoughts in mind
searching always that if there is
anything where we can go and invest
halal ribbah free but there is none that
we found like it's about a decade ago so
but we started ourselves learning real
estate we joined like azim took me put
me in some real estate investment
education he did with me so we did like
with our high-tech working full-time we
were like always working feels like we
have always working from last decade or
so. Now we are to at this point um I
decided to quit and then I decided to
completely become a full-time real
estate investor although we have been
started already long time like when we
were educated and then we first founded
our company Serin Homes and Solutions
and then very recently we formed another
um company which is Serene Equity
Investments which is a pure debt-free u
halal fund where anyone can u come in
and be a partner with us uh passively
and we are active GP partners. Uh just a
disclaimer which is very common that uh
Seren homes and solutions and serene
equity and investments and it its
employees we are not financial advisors.
We are real estate investment company
and we don't endorse any specific real
estate products. We will talk about
holistically different investment
vehicles today. Uh but I'm not endorsing
any products. Uh and all the materials
and information that I'll be sharing
here, it's only for your education
purposes. Um feel free to consult your
advisor, financial advisor for your
investment needs. But definitely feel
free to come in after this presentation
and ask any questions or set up any um
consultation appointments as well.
Um so agenda for today is very quick and
sharp and we have a time crunch so I
will go as fast as possible. Uh but
definitely hold your questions to the
end. Definitely for any slide you can
take notes and ask me any questions. We
can come back always to any slide. So a
pure agenda for us tonight is we will
learn we all know different vehicle
different investment vehicles. We also
know most of us know which ones are
halal potentially which ones are not
right. So we know holistically at least
some of them but do we know what are the
five most important things to analyze
while you are choosing your investment
vehicle if you are new to the
investment. Just real quick I want to
ask are do we have any investors already
in this room who are maybe investing in
stocks, crypto, real estate like just I
want to get the idea and sense of the
audience. So yes mah we have so are
these all stock investors? Yes. Can you
raise and are there any real estate
investors here in this room? Mashallah.
We have one sister. Um, okay. So now I
get the idea what like to what to
present and where to emphasize. Um, so
we will also look at the growth of the
real estate because I'm in the real
estate obviously. I will take you to the
information how does a three decades of
a data of a real estate looks like. I
will also be sharing uh returns of the
ROIs for different types of investment
vehicles among the real estate as well
as stocks and ETFs. I will also be
sharing profit centers in the real
estate investors. The there are four
major profit centers and um how to
invest these type of deals or how to
fund these type of projects.
understanding of some very basic lingos
which is very important while um you are
ready to invest in any real estate
vehicle. uh and then in the end I will
be sharing a investor investor
calculator with you and then I will also
be sharing some quick photos of before
and after um pictures of our projects
that we have done in the past and in the
current year and then you'll you'll have
our information as well at the end of
this workshop or later you can connect
with us
so our traditional investment is very
common that we all know it's anywhere
from CD DS, bonds, stocks, crypto,
options, mutual funds, ETFs, real estate
assets, nuts, collectibles and coins.
But obviously not all all of these
investment vehicles are not halal,
right? So for example u these two which
I have just cross crossed out actually
these earn fixed interest and where the
fixed interest comes obviously that
makes it makes unfortunately or
fortunately it makes it makes it makes
us for us not permissible. Mhm. Um for
instance, most of the CDs and bonds,
right, they always have fixed interest
rate where you will never lose money,
but you will continue to grow your money
from your principal investment. But yes,
there is almost like no risk to the bank
CDs. But unfortunately, it's not a lot
for us. So we'll go we'll take care of
all the stocks. But so the five things
that I'm going to share with you how to
choose your investment vehicle. So there
are five things to remember. First
obviously you pick what you are your
your gut is telling like like I I like
stock I like real estate but that's not
all right you have to the second step is
you start your due diligence of that
specific vehicle that you you have got
interested in there are so many ways to
obviously continue to do due diligence
for example you should be aware if you
are picking ETF where they are investing
are they investing in casinos or are
they investing in healthcare or are they
investing in high-tech or pharmacy or
marijuana, right? So that's definitely
that's second step for knowing what
they're doing. Similarly, if you are
invest uh interested in finding the real
estate, what due diligence you needed to
do, right? So you need to know the third
step is you needed to know for every
investment what your ROI is going to be.
What ROI stands for rate of return on
your investment. When we say rate, rate
means it's a physical science term. Rate
means time. Anything where where the
rate comes, it always has to be
respected with the time. So ROI is the
rate of return on your investment, it
always gets calculated for your 12 month
period. If you have picked up any
principal amount that you have set aside
for your investment, you will be
definitely interested while evaluating
each of these vehicles that what is my
ROI going to look like and what is the
formula of ROI? I think we most of us
know here, right? Do we know what is ROI
stands for? Like how do we calculate
ROI?
So let me share quickly but we have a
follow-up slide also while we will do um
investor calculator I will share again
what is ROI looks like. So main thing is
in short we have to look for ROI. Then
the next thing
is risk. So as we all know if it's halal
why it's halal because it carry risk.
Yes you can lose your principle. you can
completely lose your principle. Maybe
you can double your principle. Maybe you
can even 10x your principle. Right? So
there are always risks are associated
with every investment vehicle. So that
is your fourth strategy like you have to
look for your risks and rewards. So when
we talk about risk in the investment,
there is always a corresponding reward
for it. For example, if you look in the
slide, I have pulled out for you um
every
risks type with respect to investment
vehicle and its reward. So for example,
if we pick crypto, crypto has been
considered not even high but high high I
would say exponentially high risk. Why
there are so many risks associated with
it? Because once it is started like in
2014 there was no regulations for it.
Right? when there is no regulation SEC
rules was not there for it there is no
compliance rules initially it was it was
high risk now at least some of the
cryptocurrency like Bitcoin has been
regulated by SEC so but there are still
others which are still not regulated so
if you are considering crypto definitely
it's a high volatile you may not know it
can go down it could go up but right now
as we look its performance from 2014 to
now we will see in The next slide, it
has outperformed all other investment
vehicles as of now. Similarly, stocks.
Stocks are also considered high-risk
because it can dip overnight. Like we
have seen two weeks ago, the market was
bloodbath. So yes, it can dip
completely. Your principle, your
profits, all can go down, all can sink
and all can go up, double or
exponentially up. So does it does have
obviously high risk but it does have
exponential rewards as well. Now we can
talk about we can look at the mutual
funds and ETFs. ETFs and mutual funds
again there are different types of ETFs.
ETFs can be high risk. Yes. I have a
question about crypto.
Okay. Can we hold the question and can
you write it down? We'll come back to it
inshallah because we have so many uh
slides to cover inshallah. So for ETFs
definitely there are multiple types
ETFs. If you are researching ETFs, you
need to understand what's in it, where
they're investing, what their product
look like. So it can be high risk, it
can be medium risk and it can be low
risk and definitely it has a
corresponding reward. If you are picking
any low-risk ETFs, it may not be go grow
exponentially but yes it will grow
consistently. And another one is real
estate. Real estate I have kept here
medium to low. Although there are real
estate asset types that is high risk as
well. I think I kept it here as a medium
because the real estate asset types
where we are investing we are not
investing in high risk ones. We are
investing in medium to low-risk assets
and then yes it does have moderate
rewards. It does not rise exponentially
like stocks or crypto but yes it does
give you consistent rewards. And then
Nvys I'm not covering it's just like
interest based and then collectibles and
coins. So the fifth thing that you
should look is your position in the
investment which is very important. So
for example what is your position in the
stocks? You are a shareholder. Similarly
in the ETFs what is your position? Your
position is a shareholder again. What
could be your position in your real
estate investment? For instance, you
could be solo investor like alone like
you are purchasing a property, managing
actively doing everything alone, taking
whole risk by yourself or you can invest
in the fund. While you invest in the
fund what your position looks like, you
will be limited partners. You will not
be doing any active work of operations
and you'll be running and enjoying the
active uh mailbox money for yourself. So
your position is obviously important. So
those are the five things. So we will
move it to the next slide now. So this
is a growth of a stock versus the real
estate in a last decade. If you look
closely this diagram there is a gray bar
here. Every gray bar I'll I'll share
next slide. There's a three decades of
data. This one is just a last decade of
data and since again we are from
engineering. So we did all this research
while we jumped into the real estate why
we started investing. This is the first
and foremost reason why we started.
Actually that's my true secret. So if
you look the red line denotes the stock
market and from when actually I have to
get my glasses on. Um so the stock
market is from 2015 and until now 2024
the blue line is the real estate market
and this is the chart from case shiller
index. Case children index is the most
authentic US history real estate
recorder. So this site contains the
historical data of decades of data of
real estate. If you look how smooth this
blue line curves are versus the stock
market, right? So this bar is actually a
pandemic recession. It denotes a how did
it perform? How did the real estate
perform in the recession versus how did
the stock perform? Take a look the white
the gray bar that was the recession that
was a pandemic recession actually. So
you can see stock market was crashed at
that time it had a so even people who
had profits and even exponential profits
at that time it was even gone even
principles were declined right they not
only have lost their profits but also
their principle whereas look at the blue
chart blue graph how steady it's always
it goes it grows over time but yes it
does not grow exponentially but yes it
has continued and it has outperformed
certain times you can see the graph when
the red line goes up it means stock
market is outperforming real estate
whereas when the bar gets inverse right
then it means real estate is continuing
performing so that's just I'm giving you
just one idea like a mindset of a real
estate investment versus the stock
investment so the next slide is a three
decades of data that's 30 years of data
it starts from 1988 until today 2024 and
these four again vertical bars are
recessions. First recession 1991 and
another one is two prior to
2002. The third one is the biggest
double recession. We had double
recession in 2008 and
2009 and then the last one pandemic. So
this is again this is just only the real
estate market real estate data in 2008.
We all remember whoever was here that
yes we felt that real estate had a
significant deep sink right even though
it's not as deep if you again look at it
in a double recession when the market
has recovered how quickly it has
recovered over the years and and see
every time when the real estate recovers
from the recession the graph tells us
that it performs well before the way it
was before right like whichever prices
were next time when the recession
recovers it even jumps higher and this
is the information this is the inference
that we can take from this data another
data this this is another data this is
actually u an information of last so the
rightmost column is the last 15 years of
data versus this first column kegger
kegger is actually a compounded annual
growth rate of the last 2024 before this
past year just past year what I'm
sharing here is all these asset types
which we just learned in the previous
slide we have a stock we have S&P we
have high-tech
NASDAQ gold bonds real estate and
bitcoin you can see the highest annual
growth of the year past year is bitcoin
right bitcoin is is outperforming as of
now we cannot disagree versus all others
are like medium right like it is 10% %
ROI. So this is the ROI, annual growth
rate. It's 10.7, 14.7, 4.1 and the real
estate is 4.8. Why again I've
highlighted uh real estate again because
I'm a real estate investor but also what
I like to share here real estate growth
is not only the real estate growth but
real estate has another profit centers
like I was talking about which I will
still share in the following slide. So
for example all these invest investments
has just one returns right you are
making profit on your stock that's your
return and that is not even liquid yes
you can liquidate anytime whenever you
want but what is the benefit what is the
luxury of real estate is that real
estate has seen appreciation 4.8 And by
the way, this is rental real estate
appreciation. This is not homeowners or
actual houses
appreciation is way more. For instance,
in last five 25 years, for example, Palo
Alto has appreciated 750 times
percentage
750%. So that's homeowners appreciation
is very different than the investment
properties. I'm only talking about
investment data here. So this 4.8 8 is
the average USA it's not about Silicon
Valley it's average across the USA uh
growth rate 4.8 And it's obviously very
conservative. For example, here if you
would have investment property in San
Jose, last year we have seen 8% growth.
So every every neighborhood has its own
data. So if you plan to invest,
definitely don't look the holistic
number, right? Don't look at the whole
United States number, but it start
drilling down further to the details. So
in the real estate what is another
benefit is you are not only enjoying the
appreciation of your rental property but
the other which I have shown you it's a
rental cash flow because you have a
rental property you have placed a tenant
in it you are enjoying the rental income
as well on top of your appreciation so
that's our second profit center in the
real estate in the following slides I'll
share more profit centers this is
another view uh bar view a chart view of
the same data that we just have seen in
the previous slide. So there's nothing
more to add here. Like you can see
Bitcoin have performed well versus we
have NASDAQ second number and then S&P
and real estate and
gold. Um so in this slide we will talk
about merits. So what are the benefits
of passive investments versus solo
investments by yourself only alone
right? So in the real estate um there
are three different categories of this
investment. So if you're looking to
invest in the real estate, what is the
major um categories of their real estate
right? So the major categories are these
three residential, commercial and raw
land. Obviously commercial again have
about like eight to 10 different
categories. For example, commercial
contains multifamily apartment
buildings, commercial contains office
buildings, retail buildings, shopping
centers, strip malls, all that. So again
obviously you will first choose which
type of asset you like to invest. Now
you will look at holistically what could
be my benefits if I wanted to be alone
or if I go as a group of investors and
what are my duties and and and and
rewards right so as a solo investor
obviously you will be fully invested
with whatever you are doing in the
daytime 9 to5 additionally you have your
property to manage you will be actively
looking at operations you will be
actively looking and dealing with tenant
issues tenant complaints toilets and
tenants against leaks, bathroom leaks,
this flooded, that flooded, that broke
broke, maybe tenants go on default,
right? They will not pay. So you have to
go through with whole layer of eviction
process, right? And then you will be
only alone in that risk. It could be
honestly a blessing and it could be a
nightmare. The nightmares that we see
every day in since the time we are doing
this, it's enormous. It's literally it's
enormous nightmares and again it's the
risk obviously everything contains the
risk whereas as a opposite if you want
to become a passive equity partner what
you can do is it will be your choice you
can choose a small amount you can choose
large amount you don't have to actively
manage at all if you are a part of a
passive investment joint venture or
passive partner in the fund you don't
have to be actively involved at all
you'll just sending your cash, your
check of any sources and then you'll be
receiving your distribution, your
mailbox money. You don't have to worry
about any active management. You don't
need to have any real estate education
at all. You don't need to work at all
and it will be all divided risk among
all the equity
investors and most importantly what we
offer is actually debtree. So our
transactions are mashallah and
alhamdulillah it's purely loan free. We
never take loan. We never leverage
loans. We only raise private money and
then we do profit sharing.
Alhamdulillah. That's a that's a beauty
of it.
Alhamdulillah. Um so other two so we
already talked about two profit centers
which is one is appreciation of the your
rental property. One is your cash flow.
What are the other two? So the other two
actually the other most important
benefit is tax savings. So we have
always heard how like we we have seen
our Mr. president, right? Like how he
saved. Like people always claiming that
he doesn't pay tax. Why he doesn't pay
tax, right? Because he's a smart real
estate investor. That's why he doesn't
pay tax. And because real estate allows
investor to save on taxes. There are
different tax strategies that you never
have to pay tax. I do I should not say
this online but for example 1031
exchange you continue to roll out your
investment property one after the other
one after the you never have to pay tax
at all and then if you invest through
your self-directed IAS and
401ks you don't have to pay any taxes at
all zero taxes you will be completely
working on your uh portfolio
401k but the 401k has interview from
your previous employer if it has to be
if it is with your current employer you
cannot convert it to the self-directed
you can go at our website later on I we
have several blogs about it every time
when I share this in any speaker event
it's a jaw-dropping because it is a
jaw-dropping for us as well when we
learn and we didn't like we were not
realizing that this is true and it is
true we did it ourselves and now
alhamdulillah who ever have invested
with us because they were in speaking
event like this one. They came and asked
we followed them. We we we showed them
the steps. We are not custodians. We
show them the steps. They did it and
they are alhamdulillah able to invest
with us.
Mashallah. And then what is the fourth
one is the good returns. So obviously
this is not like an exponential reser
return returns like I said but like we
just saw at least 8 to 10% is the good
return I would say right like it's
you're not doing anything if passively
but if you are earning 8 to 10% returns
why not right on your 100,000 investment
if you are getting a check of
$8,000 without lifting your finger or
doing anything that's great right who
does not want an extra check extra
mailbox money so these are all four U
profit centers. Uh we already talked
about passive income stream and tangible
assets. So obviously real estate is a
physical tangible asset versus crypto is
all virtual, right? So you have your
asset, you can go to your asset like our
investors are very like mashallah like
we share monthly progress with them.
Every every month we send them an email.
We list out all projects. We send them
the progress photos. We send them all
the information even though we don't we
are not obli ob obliged to because in
the fund we have to send I think two
twice information but we are sending
monthly because we want to keep them
engaged we want them to be aware we want
to be them we want them to be we want
transparent to be uh with them so
alhamdulillah we are doing that
um how do we fund these real estate
projects so the investors who have like
they can bring cash home equity lines
liquidated securities stock investments,
self-directed retirement accounts, which
is the great huge opportunity for all of
us. And by the way, I think until today,
we have 8.9 trillion. Maybe this number
could be wrong, but 8.9 or 6.9
trillion of 401ks right now we have in
the USA as 401ks with the government.
What that money is doing, whoever is
aware, they have invested that. I think
I pulled the data but it's in my notes
somewhere like at least 70 million
accounts of 401ks are actually using
those and they are investing in
different vehicles but all of them rest
of them are even unaware they don't even
know so it was also a news for us when
we were started learning and this is why
I'm sharing this here and then yes you
can bring endowment accounts like for
example if there are mosque who have
endowment accounts endowment funds they
can invest passively with us or with any
another investment like this and then
trust accounts obviously if you have
created your will you have your trust
accounts you can directly invest through
your trust
accounts so understanding uh let's look
at the time so it's 7:55 I think we have
a hard stop we are almost like at the
second last or last slide so
understanding lingos we have been
talking about ROI ROI so ROI what is ROI
rate of return return on your investment
so the net income that you are gaining
that you are earning in the profits over
the period of 12
months divided by your total principle.
So for example, you set aside $100,000
or we can use any example 50,000. So
let's let's use 100K example. You set
aside 100k maybe you have chosen two or
three investment vehicle like you can
diversify your portfolio. You can choose
one or two or three, right? It depends
upon your risk
appetite. Sally may be having a 200k in
extra bank. Tom may have like 200
million in their banks, right? So, you
can choose your risk appetite. You
should know your risk appetite, what you
can afford to lose, what you can not
afford to lose versus your principle,
like how much principle you can set
aside for the investment. So, the net
income that you will be earning through
all the investments, you will add them
up. Let's for now, let's use one
example. Let's assume you set aside
$100,000 and you are earning $1,000 a
month of profit per month for 12 months,
which means you have earned throughout
the year how much? $12,000. And it it
should be your net income pre-tax, not
after tax. So ROI we determine at the
pre-tax income. So $1,000 12 months
12,000 divided by let's say you have
done 100k what is your ROI looks like?
12%. Right? So that's your 12% ROI. We
will use this information in our
calculator very shortly. And then cap
rate. Another very important metric for
the real estate is cap rate. How do you
determine? So cap rate actually being
used mostly for commercial properties.
It could be for single single family as
well. If you are putting it aside for
your rental income, right? So cap rate
typically actually is actually a
formalized written here. It is a net
operating income that you have earned
again in the 12-month period divided by
the purchase price of the commercial
property or single family property that
you have purchased. So for
example, let's assume a hypothetical
example. Let's assume you have purchased
we have together purchased let's say
200k thou 200,000 property in Memphis
Tennessee, right? For rental that
property can earn $2,000 gross rent from
the tenant. Okay. So, gross rent versus
this is net. So, how will you find your
gross? How will you find your net from
the gross? You will subtract do not
subtract the tax except the tax. You
will subtract all your expenses such as
all your utilities, bill like
electricity, gas, water and then uh
insurance and then property management.
All the expenses that you have, you
subtract. So, like let's say
hypothetically we are earning $2,000. We
purchase together 200k property. Let's
say 1,200K is the net income for us
after subtracting all $800 are gone in
the cash. We have $1,200. Now do $1,200*
12. What is that like $14,000 or
something? Then divide that by 200 which
is your purchase price, right? It will
give us the cap rate for that building.
I think the number comes 7.2%. So you
are purchasing a property at a 7.2 cap
rate. Why? Look at this picture. Why I
drew this picture? When I was learning,
my mentor told me this. So remember this
up arrow and the down arrow. So what cap
rate is? We are at 7.2 cap rate, right?
So if the cap rate goes high, your
purchase price goes down. And if the
purchase price goes up, your cap rate
goes down. So but why investors do that?
Because we use this number, we use this
metric to analyze the property. how much
profit we can make for our investors or
for myself if I if I'm buying solo, how
much I can make a profit on the rate and
wise and how much this property can
potentially generate for me. For
example, if I get properties for two cap
rate, I don't even look at it. I tell my
uh agents don't bring me anything, don't
send me anything which is less than
seven cap rate for instance or six,
right? I don't because if I buy anything
for two cap I would not be able to give
any income to my investors at all. So we
have to buy at a discount strategically
so that we can make good distributions
for them. The third thing is investment
property value. This is the most common
question when I hear and I think we have
to may have to start at stop eight. So
what is my investment property value
look like? So this is very simple
formula. This is the same formula which
is a cap rate formula but it's twisted.
So you take your purchase price is also
a market value. So for in for instance
now same property which we purchased
today at 200,000 which is making for us
$1,200 after five years. Let's say every
year what happens if we are tenant our
landlord keeps rising our rates right
rate which $50 maybe $30 or $100. So our
rent will continue to rise for five
years right. So those 1,200 net may
become 1,400 net at the end of five
year. So what we going to do we are
calculate on NOI new NOI which is now
$400 we are saving times 12 divided by
market
cap then what it what it does is market
cap is actually in investors tool when
we go purchase in any neighborhood we
find out first what is the market cap
here what it means is what other
investors are buying at what cap rate
other investors are buying and there is
always a reason why they're buying on
this and there is always a set cap for
certain neighborhoods, right? For
example, in in our area here in Silicon
Valley, we had reached before this
interest rate hikes in 2022, we had
reached at 2 to three cap rate. There
was nothing in the deal honestly, but
people were still buying. We're just
sitting on the property making no income
expecting appreciation. That's all two
to three. Now after interest rate hike
now we are like last year we are I'm
sometimes I'm seeing at least six
hitting six but we are close to 4.5 to
5.5 last past year which is good like
cap rate is rising which means purchase
price will come down. So the last screen
is about the investor calculator. So
what we are going to do what investors
do I'm sharing another recipe of
investor it is a double game investors
call it a double game what they do what
they look for is how quickly I can
double my principal amount so let's
assume again you have kept aside
$100,000 how quickly this $100,000 can
become two 200k and then this is a
double game let me Say 100K becomes
200K. 200K becomes 400K. 400K becomes
800K. 800K becomes 1.6 million. It's a
double game. So investors play a double
game. What you would do? This is the
barcode for the investment calculator
which is Azim have created it on our
website. I asked him especially when I
was uh coming here that if we can get
this calculator for the audience. But
let me just quickly share what this will
do. The there are independent variables.
So your investment amount, forget about
it for now. Whether you can start with
$500, your $500 will become $1,000,
$1,000 becomes $2,000. $2,000 becomes
$4,000 and so on. So choose any dollar
amount that you have in your mind. Set
aside. This calculator is independent of
this variable. You can choose any
amount. And also this calculator is
independent of any investment vehicle
that you choose from the previous
slides. Right? You can choose crypto,
you can choose a stock, ETF or any
anything investment vehicle. But
obviously in the end I would say don't
go greedy. Investors whenever investors
go greedy things fall apart or things
starts falling apart right so investor
has to manage the greed and they have to
control themselves not to go crazy but
be more realistic and do your due
diligence. So if you go at the website,
if if we go um I think I need to go or
maybe if
uh can we go in this computer or
say 816 you can go on. Yeah. So but if
you have gone there at the website go in
the hamburger menu click calculator go
use this barcode and then that will take
you to our website. From that website
hamburger click calculator then go in
the calculator. What is it's asking?
It's asking only one question. What is
your desired ROI? Right? And we just
discussed ROI over and over. So what it
does, you can play with this field
actually in the website, enter your
desired ROI. For example, if you are a
if you want to be in the low risk, you
if you you don't want to take higher
risk, right? Because you you don't have
like enough to invest, right? But you
want to be very cautious, you don't want
to lose your principle. So you will
enter your desired ROI here like 5 8 6
10% ROI or 15 or 20. We have seen in
crypto crypto is giving you 34% ROI. So
if you enter that number just enter the
numeral number and click calculate. The
next field appears is it will show you
how many years it will take to double
your principle. If inshallah your
investment goes well right but obviously
investment has the risk it
can increase your profit it can decrease
your profit depending upon the
situation. So that's all this is where I
end my presentation. These are some case
studies of our own project that we have
done in the past and some before and
after photos of our renovations. U
sometimes people love checking it out
like what how it was look like before
and how it looks like after. So we
purchase like definitely distress
properties which no one buys but we buy
and we maximize returns on investment
for our investors on those. These are
some of rehabs which is local. These all
these showcase um case studies that I'm
sharing is was local here in the Bay
Area. We do do webinars also where we
share more details like we share what s
systems we have built over the years
what due diligence we do how our teams
looks like what we do how we do so
everything else we share in our uh
webinars um this is another before and
after tour but we can ignore we have I
think prayer time this was I I have
actually one favor if you all can do the
top left left uh barcode is our LinkedIn
page if you can please click follow or
tag tonight if it's beneficial for you.
If this information was really
beneficial for you, please share maybe
on our page. Tag us, feel free to tag me
with you and Serene Equity Investments.
And another barcode is for our investor
community, private investor community on
our WhatsApp. Um there are people
whenever I go to speaker events, they
like to learn, they like to enjoy, they
like to know what we are doing. So we
share we do every quarter u education
serieses as well where we invite
speakers uh which can help our investors
grow uh in their education. Uh I share
our project photos and some web you know
pictures over in those groups as well.
And then another barcode is our website.
Um you can set up an appointment
one-on-one appointment with us. Um you
can share your specific goals if you
have any questions or need more clarity
on real estate investment or stock
investment like she said uh like he said
so inshallah we are happy to help
inshallah and asalamu alaikum thank you
for listening and hosting yasin
yes yes hold on to your questions
yes and we will be here inshallah as
much as time you all need and you need
to talk aim is here uh he's my business
partner partner, my life partner.
Alhamdulillah. So, um you can ask him
any question. You can stop me or him and
we both will be here inshallah to take
any of your questions and we have a
session of Q&A as well inshallah. Asalam
alalaykum. Thank you for
[Applause]
listening. Thank you so much. Thank you.
Please turn off. Yeah, I turned it off.
You can um I'm sorry that you asked. Oh,
you have to leave. Thank you.
Um yeah, I was going to say you can.
Sorry. When you asked if you could go on
the link, you can if you want to do that
after show after. Oh, yeah. Yeah. I
don't know if people were able to um
check it out. For me, the QR code is a
little far. Oh, I see.
was a little small. We can Yeah.
Otherwise, we can because this is your
right. So, you can go to Serene Equity
Investments uh invest.com invest. Yeah.
Just go in the browser invest. Yeah.
This one. And then go in the hamburger.
This one. Yeah. Hamburger. And click
calculator.
Yeah. That's it. That's where the
calculator. That would be cool to show,
right?
Yeah. We can exit from here and also
keep it here because sometimes people
want to look at the slide and ask
questions.
So where is the hamburger? Hamburger is
here. Oh that Oh you and then
calculator. Okay. Does that feel okay?
Sure.
So the prayer happens here. Uh in there.
Oh over there. I don't know if you heard
me but is at 8:16. Oh 8:16. So I haven't
heard you this is so we No, it's okay.
So I was um Oh, because like 8:10. Oh, I
see. It's okay. I think because I think
an hour um Oh, maybe it's 810 or 8:08.
Yeah, I see. Oh, are we still going
live? Yeah, but she someone's running
it. I think she paused it. Oh, come on.
We are not going live.
Yes, sure.
We can leave
Obviously not about hair
presentation. If you want to invest, you
can give me your money.
There was a donation and
then donation
for Yes.
So that's the type of investment I am
inshallah. That's why we have to bring
you sister Salia so she can grow your
money so that you can give more
inshallah.
Okay. So I have a question for you
sister. I will start with that. Um, a
lot of young professionals maybe they
they're first year or second year at
work and they barely they say they have
a saving of 25,000
$50,000 and they think I don't have
enough money to invest.
um in general like funds
um like your fund would you take someone
with that 25 50k or does it have to be
100k and more? Um definitely certainly
we can this is here. Sorry. Sorry I
didn't realize I
exactly what's the minimum h
what's the minimum investment that's a
good question. I was asking her that
question before salah and she said
something. Yeah. So can we hear? Yes.
So um although uh we started with the
minimum investment of $50,000 uh we
raised in just this February we raised
it to
$100,000 but since we are here with the
Vaso Institute with Shehal Shikhal Bakri
and obviously we can make an exception
and it's not like written anywhere but
uh because obviously our fund is
regulated under securities SEC laws and
has been structured
thorough thoroughly with a attorney who
has already 30 years of experience in uh
forming these type of real estate
syndication funds. Um though in his
experience he said this is the first
time in his 30 years of experience that
he's making a fund that has no debt. So
subhan Allah. So um but yes inshallah we
can definitely make exceptions right for
the audience and we have made an
exception
for investors. So except international
investors like
anywhere outside from USA, Canada,
Malaysia, Asia or anywhere um there
definitely the currency is really right
different. So we made already an
exception for some international
investors.
Based on that, does the money have to be
US dollars or could it be in whatever
country they're in? Um, so the way the
escro is we received US dollars like we
received in our bank account. Yeah,
sure. Like that. All right. So yeah, it
was when it arrived it was US dollars
because it arrived directly because it
has to arrive directly in our funds um
account. So yeah, it came as dollars.
That's a good question actually. They
had to convert it first and then I guess
indeed
or or if they have a already a US dollar
account in whichever country they are
living in then it's much easier. Yeah.
For the self-directed
IRA someone has their own business. Can
they form an
Yes. Yes. That's possible. There was one
clause with one of our self-employed and
she had her own business but I think she
did not have
employees. This is why she was unable it
was there is definitely a depth of
everything right. So most of the times
all the investors who have got on
boarded with us everyone was able to
convert their IRA accounts to
self-directed and was able to fund
except one for now until now.
Yeah.
Yeah. But the thing the the the tip here
is it has to be self-directed. So
whichever you have as of now Roth IRA or
401 you can convert. Yeah. And then we
guide you like we have um some
custodians whom we have personally
worked. Uh we give you on the list. I
send whoever ask us we send you the
list. We even give you people's
custodian like contact names. You can
contact them. You can then you have a
due diligence process again because they
have different fees right some ask you
to create LLC's some like directly from
the trust account. We have different
varieties by the way every investor who
came in and there was a learning for us
also and for them but yes we know the
way how to do it. We will guide you
through that. What you say initially
that's for previous employers. Yeah. If
if you are an employer if you are
employee an under an employer right then
you can roll over your previous employer
to self-directed but not with the
current invested with your company right
so that way you cannot self-control that
yeah that's a tricky one when you change
a job then you can keep doing so because
we have $ 8.9 trillion dollar existing
in the bank accounts across the USA from
everyone's retirement income we wanted
to tap those accounts and be able to
invest because nobody tells you their
secrets. No one tells you because you
have to you will save all your taxes on
those accounts. No one shared this
information and we are going live. I'm
sorry. We are at the very end. So yeah,
good question. Do you know why your
current
employer that doesn't count? That's a
good custodian question. Maybe Azim can
answer that. your own company and you're
now employee. It's like what you got to
fire you and then be someone else from
the employer actually because you your
employer has a control that's why
it's usually an employer sponsor they
designate because they go with the
custodians that's usually very
restricted and they allow you know so
you can't take it over there and until
you have that job you can until you have
that job so I have to buy but if you
have a business or let's say you have a
regular IRA or Roth IRA that you can do
as self direct.
Yeah, you can convert it into
self-directed and then you can invest
and one of my mentor actually yeah you
can invest in not just real estate you
can invest in any alternate assets
because usually traditionally what
happens in um in the IRA or 401 is you
are restricted to only mutual funds or
ETFs in general or stockless if you have
you are managing your IRA uh then you
are restricted to stocks but with
self-directed you have opportunity to
invest in diversified alternative
investments it can be oil it can be
crypto it can Anyway,
so can I stop the my current 401k and
just go with another company and do
another 401k and say this one close that
one? That's a complicated question. Oh
yeah, you need to consult them with a
custodian and assume. But I think if
online users if they were hearing the
question was if
uh we can uh what type of accounts can
be converted to self-directed accounts,
self-directed IRA or a 401k. So only the
accounts which is your previous employer
where you are not working currently. But
if you are working currently with an
employer, you cannot self-direct that
one because that is like a your employer
controlled accounts.
So if uh I had a previous employer and I
rolled over my 40s from that to
employers. Oh
no. So you should not do that.
I not the 401k because if you if you do
then you have to pay taxes but you will
save from the future. There are
different
basances but recommendation is usually
to then you have more control because
you can invest in even in stocks you
roll over your employed with
allowed fun.
So do we have online users? Do we need
to answer this for online users or um
are there any online
users? We can just go to the next
question. Yeah, let's do two quick
questions. Can can someone contribute uh
as a like besides just funds like can
they be part of the process of whatever
the uh investments are like renovation
of the house or anything like that.
That's my first question and second
question is if someone actually becomes
like puts their cash in there are they
able to pull it out easily or is there
any restrictions? All right. So the
first question is if you can become an
active partner
right so as of now um we are the only
active partners there are no other
active partners in the fund as a GP uh
whereas all the onboarded investors are
limited partners where they definitely
have to not involve in day-to-day
operations
um in the past we have done partnerships
with an active investors as well when we
have not syndicated ated this one before
that we were doing like project by
project classic style and as long as
obviously if the other partner has that
capacity and ability to uh work with us
right because at that skill level
obviously if you have any anything that
you can bring into the table um we can
think about it right like we can the
more the marrier um but for now uh we
don't have any other active partner
except BC and your second question was
um for someone invested they would for
any reason they want. Okay, good good
question. So we do have two type of uh
we are offering two type of shares
actually class A shares and class B
which we go thoroughly the difference
between the advantages and what we are
offering in both of these types. Class A
actually is for five years period where
we hold and we continue to invest in
different types of assets which we talk
about with one-on-one and in webinar.
Whereas the other class B share types
yes there's a liquidity there at every
project exit those are only offered to
flip investors. The first class A offer
to flip as well as multif family and
rental investors. So class B yes you can
exit at a flip um exit as we exit flip
you can take your principle at your
profit or you can come back to the next
profit but class A also even although we
are holding for 5 years but god forbid
if any emergency comes right inshallah
we'll replace your portion with any
other investor's portion if they willing
to invest or we will try to manage or
from the group to or per or or how often
um so like how frequent when we purchase
acquisitions. Um so in the past while we
were full-time working with high-tech um
we were just doing one to two or three
projects per year very like slowly right
now we are scaling. So alhamdulillah but
the time I have become full-time from
last six months. So we have mashallah
completed four projects. Alhamdulillah.
And right now one is in the escrow and
uh we are closing. Alhamdulillah or
flip. Alhamdulillah. And alhamdulillah
we always make our projections.
Alhamdulillah. It's nothing to brag
about it only. It's only Allah's baraka
that we all see. And the beauty is that
it's all halal beauties. I call it
actually for fun halal beauties. So our
halal beauty is in escrow.
Alhamdulillah. And all of the other
halal beauties are already done,
renovated and have started earning from
January. Mashallah.
Yes.
Uh is it one month for all the projects
or every project? Okay. Good question.
So this is only right now we have only
one fund and it's like an ETF example
which mostly Azim gives to be able to
understand. So if you know ETF what ETF
looks like same as the real estate fund
looks like under one fund we are
acquiring buy and hold rentals we are
also acquiring flip projects we are also
um acquiring multif family apartments
which these are the three um assets that
we have expertise and experience and a
skill and we are focusing only on that
based on our previous experience. So
certain asset types we do not touch
based on again risk and reward. So
although they are high risk, high
rewards, exponential but we are not
playing with those assets at all in
strategically. You can choose if I want
to be in the flip or in the hold and buy
and hold side. Yeah, you can choose
class A share or class B. It's all your
choice. Uh what we go what we do in
oneonone or webinar there is
differences, right? There is four profit
centers like we already talked about
four profit centers. In class A, we
offer all food full coverage. By the
way, we also even give you tax
depreciation write offs, K1s that you
will take it. And the way we all because
we all are in it together. We all take
tax benefits, we all take appreciation
gains, we all take rental income, we all
take flip profits in. So it's all
together. Those all four flip four
profit centers are with class A. Class B
only has one which is flip profits
because obviously we are not holding
your principal right. So we cannot give
you tax depreciation write offs. We
cannot give you buy and hold rental
income. We cannot also give you we we
will only give you flip profits right
because we don't know what your ROI will
become annualized because we are not
holding your money.
Yeah. Yeah. Oh, no. I don't think so.
Right. Because it's your money is invest
your funds are invested in buy and hold,
right? It may not be easy. Um maybe it's
an attorney question.
That's easy. It is class B switch to
class A. But it may be not our question,
an attorney question. So, we'll have to
consult him. Yeah. Yeah. But we can find
out the answer.
cycle. Yes, please. So the the question
was um that if an investor have invested
in class A shares, can they switch to
class B because class B is providing a
liquidity at every project exit whereas
class A has to have your principal
invested for five years. So the question
was can he convert from class A investor
to class B in our read?
Um actually we'll have to check with an
attorney because what happens in class A
you you're a buy and hold investor right
you are receiving K1s now you want to
switch your position to class B which is
very different um possibly
yeah possibly someone has to buy out
that share because your money is
invested in the property right we have
we don't have a cash for that right but
you need your money back so we will ask
all other onboarded investors if someone
wants to take that position and then you
will leave all your profits there right
right there you will not be able to gain
any appreciations after that right like
all the rental incomes that you have
already enjoyed that's good but then you
are switching your position completely
so this is a completely different share
but I'm sure it's possible attorney
answer will be possible but yes
obviously you have to understand the
consequences of it right you won't be
able to get text appreciations or rental
income at all or appreciation at all
right going forward once you convert
you know one of the advices that I want
to give Just general advice. You know
how we said in general we have these
four areas. Spend moderately, save,
invest, zak,
and every one who knows anything about
finance in America will tell you the
worst idea in the world is to keep your
money in the bank. So you can actually
combine these two buckets, the save and
the invest in one. So instead of
saving in a cash account that will be
depleted through inflation and all of
that, you can actually take that and
invest it. And God forbid if something
happens to you and you have a trust,
which is another thing I would like to
bring to this crowd is to educate you
about trust.
uh especially if you own a property and
you don't have a trust literally the
judge in the court is the one who
becomes the one who will decide how the
money is divided between the heirs. So
to have a living will and a trust is
another building block that you need to
have in
place. But let's say you you're instead
of saving you put the money in the
investment. If something happens to you,
they will offer your share to someone
else and it needs to be liquidated. But
instead of giving your heirs the
100,000, maybe you will end up giving
your ears
125,000 because you were not sitting on
the money, you were investing it. And
that's that's my advice. And and another
thing, one of the things I've heard and
like I have tried to implement as much
as I have is that when you have like a a
$10,000 or
$25,000 and you have them saved some way
somehow, take them, invest them, and
consider that you don't own them. Forget
about them. The problem is when we think
we have money, we start
itching. I want a new car. I want a new
this. I want to go vacation. I want
this. So then take that money especially
when it reaches a good critical amount.
Take it put it in investment and then
you say once I save again inshallah I
can go vacation. But the idea because we
are human beings and we are affected by
the environment around us and the
environment around us is instructing us
to spend spend spend. The economy is
established on the consumer
spending. So they want you to spend what
you don't have. You don't have money to
spend. Oh, don't worry. We'll give you a
credit card. You can go and spend it.
You can pay us later. So the we have to
change the self-t talk. When you talk to
yourself, start thinking not when am I
going to buy the next item, what am I
going to do next, how am I going to
start thinking when am I going to invest
again, when am I going to gather money
and invest. And from that investment you
pay zaka you pay and you have more money
and you can open a business and you can
create job opportunities for other
people. This is how we think as Muslims
and um if you look at the life of
Sahab they saw them they they they were
afraid of money itself like they if they
wanted money they wanted it to spend it
and spend it and spend
it. They did not uh they did not worry
about it like as as a target as a goal
in themselves. And
um the prophet sallallahu alaihi
wasallam instructed us to leave our
children with something. But if you look
like modern example when Bill Gates is
deciding to leave only $20 million for
his children and even that he
decided there is actually a club Bill
Clinton is part of it and that when you
die 90% of your income will go to
charity of your entire net worth and you
will not leave your children except with
something very little. And when they
asked why, they said because if we give
them the money, we would have robbed
them from the drive to wanting. Tell us
you have the money. You don't we robbed
them of the drive. We don't want to rob
our children from the drive. So it's
also teach your kids how to to do this
like these four things that we have at
the we're designing right now. One of
our short courses is three to four hours
for our children, elementary, middle,
taught by high school and college, which
is to teach them about zaka and about
how to spend your money with these four
areas. But you know, teach your children
that your younger brother and sister, if
you're not married and you have a
younger brother, teach them that. In I'm
sorry, sister, you had a question. You
raise your hand.
Is there a difference between class and
class? Um earlier it was one was class A
was 50 and class B was 100. We now have
raised for class A as well but inshallah
we can make exception um for the
audience here for outside the country
investors and they don't have social
security they don't have neighbors here
or anything like that that's still
possible and doable. Yes. So we already
have worked with an attorney. He um
guided us what needs to be done for the
intern international investor. It was
even easier by the way. So here when you
um sign up there are two um documents
that is required from the SEC rules that
we ask you to fill out. We send you
docuign. Those are two also those are
very easy questionnaires. One is actual
subscription agreement and another one
is questionaire. Whereas for the
international investor we did not even
have done the questionnaire right we
only have done the subscription even
it's easier so here because our fund is
actually
for accredited or nonacredited investor
we are accepting both type of investors
um only for the foreign investors there
will be withholdings
yeah someholdings tax withholdings for
foreign investors
for foreign investors at the end of
for foreign investors at the end of the
year there will be tax withhold taxing
will be different like no for the
foreign yeah tax in their country not
here um withhold means withhold means
they will be it will be hold here and
then they I don't know which whichever
country they belong to they will figure
it out but at least what compliance per
compliance with our fund we have to do
what we have to do per per SEC
compliance so yeah
And talking about zaka like she was
mentioning it was very interesting
question because the Ramadan just passed
and since we have onboarded investor one
of the investor messaged like whether am
I be paying zaka on my like he had like
in both class A and class B and by the
way like some investors do in both right
sometimes they want a liquidity for some
reasons for certain amount and then they
don't want certain amount liquidity
right so so that investor had both so he
asked like if I'm paying zakon this or
this And what and then I'm like boy I
have to think about and by the way once
we learn real estate what we realized
was another eye opening thing which I
never knew that once we purchase rental
asset we don't have to pay zaka on that
amount that we have invested it was a
astonishing for me the amount of zaka
that we were paying after we purchased
it becomes decreased actually because it
is your rental asset versus if you have
invested in the other class B yes you
have to because it's your active Because
the intention matters in the zaka right
your intention is to give it for 5 years
but if your intention is no you are just
liquidating any time at the exit then
you have to pay like class B you have
and class A you don't have yes are there
any management fees for the fun yes
there it's only very minimum like it's
2% 2% acquisition 2%
disposition even like I'm working right
now for free honestly because my goal
for providing this halal debt-free
investment fund was bigger than what I
was earning. I decided to for now I have
no because we have deferred also all our
acquisition fees and even this is
minimal 2% even our attorney was asking
please don't do that 6% otherwise you
have nothing and still I'm working for
free for them but um we have also even
deferred that until because we are
giving mashallah pref returns not even
returns pref return what pref returns
are that active investors will not earn
a dime name until all our onboarded
investors will earn 8% ROI. We were
talking about ROI, right? So we will
earn only if we make it 8% and we pass
it this investment distributions to them
then we will go start. So we have really
made it like a sweet even it's halal
it's halal like there's no loan but then
further cherry on the top for
investors and inshallah my our beliefs
our our intention is pure or we are
offering this to our community Allah la
we'll make it happen inshallah we will
have inshallah more investors we will
acquire more properties there will be a
time inshallah which will happen
inshallah we'll start earning
So any other questions? Yeah.
[Music]
Yes, it's affecting real estate market
as well because can you repeat that
question? Yeah, the question is if
tariffs increased tariffs are affecting
um real estate. So the answer is the
tariff situation plus interest rate
hikes that we have seen starting
2022. Yes, it's affecting but it's it
was not affecting as much after the
tariffs have arrived. It has like right
now the investors in every investment
vehicle has a fear right we have fear in
a stock market. We have right now fear
in investments, real estate investments.
What we have noticed in last two months
when we listed our recent project um we
used to so that area the neighborhood
where we have um this project was
already had 30 days of market meaning in
30 days we typically used to receive
offers in that market uh when we
received offer now actually is actually
it's affected like because of tariffs
and plus interest rate hikes already
present I think we have received offer
in 45 days five 45 daysish
We had to continue to open houses but
alhamdulillah off our arrive because for
renovated houses there's always a demand
because the main issue here in the Bay
Area is supply and demand. We do not
have a fully renovated ready to live
beautiful houses available. What we have
is 1958 from 1900 anywhere to 1958
houses and it requires major renovation.
Everything seems broken like if you'll
go in on our set in equity investments
page on LinkedIn um the one which is in
escrow I have put a video there before
and after take a look what was the
condition and how it beautifully looked
like so definitely impact is there but
we still are having offers what we are
seeing overall um from other investors
because we are in the investors group
where there is a 30,000
investors only in the USA we are in a
part of that network we are reduc seeing
reduced offers on everyone's properties
and less offers obviously less because
buyers have fear right now they're
thinking what if if my job if I get laid
off or if I lose my job because right
now job situation high-tech market is
still I think the job growth is still uh
coming as positive every time in every
quarter so we are still seeing offers
but yes less offers so we have more fear
here right now which is very
unidentified obviously like we don't
know
I'm going to give you a simple formula
just you walk if you can remember or you
can write it down or we can send it on
the
uh on the text uh how we do a summary
for the class we can send you a summary
if you buy a house to live in it or you
have a property that you live in it your
house you put down payment 100,000 or
you bought the house cash or you put a
100,000 down
payment and the house is worth 1.5
million. You have a loan on it. Let's
say complain loan for half a million and
you gained appreciation 1 million. It
doesn't matter how much you put down
payment. It doesn't matter if you paid
it all in full. It doesn't matter if you
gained appreciation if you live in the
house. There is no zaka on it.
Done. Period. Never ask that question
again. You put the down payment. Oh, but
when I bought the house, I put
100,000. Do I next year pay a zaka on
100,000? No. You live in the house. That
money is no more
zakatable. Option number two, you bought
a property to sell
it, to flip it.
You bought it with that intention. It's
in the process of flipping. It has not
been
sold. Whatever money, real money you put
on it, when the one hij year passes by,
you pay 2.5% of that because it is for
flipping intention. Intention. I bought
it to flip it. The money that you bought
there that you have in there, you still
did not gain the money. You're still
waiting, but the money is there and it
could be sold. It's not like completely
loss. Then you have to pay zaka on that
money. Option number three, scenario,
you bought, you put a 100,000 or 25,000
or 500,000 or 1 million to buy a rental
property.
So now you own the house or part of the
house and you're making
income. If that income that comes from
the property after one year is more than
the level of zaka which is the 83 grams
of gold and you it's saved and you did
not spend it on your
necessities then you pay zaka from the
income that came from the property. Not
I put $100,000 in the property. I'm
going to every year pay zaka on h
100,000 plus the rent. No, you pay zaka
on the rent, the income, not the
capital. Are we clear on that? Yeah,
thank you for correction. I think I said
it that for rental. Yeah. So, no, what
you said is right actually, but it just
flipped their mind. So I thought this is
A B C
depends on on the class B but class A
you will only pay when we are making you
distributions right on the income like
you said your principle because it's
tied up to with your intention that it's
invested so on not on your principal but
on your income distribution class is on
the principal class B is also on the
principle exactly yeah so because your
intention is not to give away from you
it has to come back to you that as well.
So he it was a question for everybody
like in our fund and even for us
question on the value of the
home or whatever
I bought a house to invested to flip it.
So I bought the house uh for a million
and a half and I put money half a
million. I will pay zaka only on the
money that I put that I am expecting to
recover it and make profit on the top of
it because half million is yours his
right because he purchased for 1.5 but
not all of the money is his money. He
may have raised money. So the 1 million
might not be might be a loan like halal
loan or it could be someone else's
money. So you don't pay on the value of
the house. You pay on how much you have
money in the
house. Very good question. And then when
you sell it, do you pay on the whole
house? No, you pay when you sell it.
When you sell it now, you you the money
came back into your account, right? So
we do the law of averages. Let's say I
started the year I invested half a
million. Uh in the middle of the year
the house got sold. After 6 months we
were able to flip it. The next 6 months
I have I made 100,000 on my half
million. So now I have 600,000 in the
bank. When the year flips I pay zakan
600,000. Law of averages. Let's say I
had
500,000 and in the middle of the year we
sold the house and god forbid we lost
100,000. So in my bank now there is
400,000 because I lost I pay zaka on
400,000. So it goes both ways. What the
year ends the year end law of averages
right? So it's not like I bought it for
500. I mean I put 500
but then I made now another million on
top of that. The house you know is it
appreciated. It appreciated. So every
year when you pay zaka you look at the
money that you have that you actually
own and you pay because it will be
impossible to calculate every penny that
you got. Oh, I got this dollar on March
13 and I got this $10 on April 15 and I
got this dollar so I'm gonna pay zaka
next year on March 15. And anyway, it's
not based on March. It's based on which
is the hij year. So you every year you
look at what you have in the bank and
you pay zaka on it. Some years it will
be less, some years it will be more. It
averages. Now you you bought the house,
you sold the house. Uhhuh. You sold it
January 1. Uhhuh. So the next year,
January 1st, do you pay the debt on the
1.5 million or just the 500 or the
difference between the five and so I had
500,000, right? I must have had it
before I bought the house, right? So the
year of that started on the 500 must
have been must have started
uh before I bought the house. So let's
say 6 months before I bought the house,
I have a half a million. Then an
opportunity popped up. So I bought the
house. If by year end I already sold the
house, I'm going to pay on the final
number. If by year end the house is not
sold, I will only pay zaka on the half a
million that I still have trapped in the
house because I did not make profit yet.
We didn't sell the house. So I will just
make zaka on the original amount. I'm
talking way after you sold the house.
Uh-huh. So now you sold the house. So
600k. That means for example in his
example he made 100k on exactly 500. So
now when I when I made the 100,000 right
I gained back my 500,000 and I gained on
the top of it
600,000. Next
year I will pay zaka on
600,000 and it averages because
otherwise you're going to end up paying
zaka every month. You can do that but it
will not you you will go crazy because
every penny one year every because at
the end of the day when you look do I
have
the when you have the you don't say
oh you know what hour did I start the
you know so you just once you have
the you have you reach the level of zak
and one year passed on that two things
have to happen from that date I go above
the minimum required and one year passed
on that then I owe
zaka. Very
good. Yeah. These are the three simple
three cases of real estate. I own the
house. No zaka. I bought it to flip it.
There is zaka on the whole amount that
you invested. I bought it for rental.
You pay zaka from the rental not on the
original money. You
You want to you want to confuse us now?
No. I mean that's still possible, right?
Like you bought it for flip now you are
in love of that house. Now you wanted to
own that, right? So then for flip yes
you arrive you were eligible for the car
but now now you are owning it then you
no longer yeah once you live in it once
you have decided to own it and once you
own it then no longer.
But did you decide that after one year
passed or before one year passed? If you
decided before the one year passed then
you don't pay zaka. If you decided after
one year pass last year has zaka
starting this year it's my house like
that. Yes brother. So I heard that
something just want to
clarify somebody bought a property for
500k next year the property value come
up to like 900 or
800k and they sell it sell it. are they
make a tax for the profits they're
making or there's no tax? Oh, so um I
heard under the $500,000 profit, you
don't need to pay tax that much. That is
like a kind of Yeah. blow my mind. So,
but there's a condition again on
taxation. If you intended to purchase as
a owner
occupied then when you sell owner
occupied house and if you have a 500,000
of worth of equity you will pay no tax
married for merit. Thank you for 250 per
person years and you have lived in the
house for 2 years at least or 3 years
aim I think no two years and so one
person can save 250k and 250k now let's
say you bought it for 500k you are
living in it for 3 years now 500k house
has become 1.5 million now and you have
your spouse with you so your net profit
let's say 1 million right from 500 to
1.5 I'm not charging any commission or
anything. Let's say this 1 million in in
your hand for 500k because you are with
your spouse. You
[Music]
[Applause]
can you will pay only 500. I have
another good question. That's a good
question. You knew this, right? You are
you an investor already? I'm planning to
do that but uh I heard another weird
story. My friend also is going to do the
same thing but he is facing a challenge.
His wife is back in his country and he's
living in US. tried to buy property.
Uhhuh. Because of his marriage, they
asking your wife need to sign a
document. His wife don't want to invol
that thing in the US. Uh oh. How does
this possible to buy property? Oh my
goodness. So that is a title issue
man. You cannot purchase a property if
one of the owner who is on the title.
I'm sure she's on the title because um
if two person on the title and there is
so many clauses actually there is joint
tenency there is community property no
but he said his wife is outside outside
but can she come because signing signing
can happen
throughout any paperwork she wants you
by yourself so then okay I have one
solution she he can do the quit claim D
so
to sign.
But no, but if she's on the title, no
matter what, she's not on the title. Is
she on the title or not? That is the
biggest question. She's not on. So title
is when we purchase a house, there is a
grand deed that we all get in the state
of California. And on the grand deed,
whose name is there? We can check like
with our tools. They never buy a house.
They buy it right now.
Okay. So, he can still purchase a house
without her because uh he can only be on
the title. Yeah, that's
Yeah.
Yeah.
Okay. So, so it's easier even if she
disagree to sign only one person can be
on the title and there are different
types of titles also. There's five types
joint tenency community like you have to
um go through there are different types
of title positions as well. So um um
escrow officer also can explain you
really well or or real estate attorney
but it's so easy actually. Inshallah
let's wrap up then you can continue
because we are doing live stream.

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