Mohammed Ali Rashid a first generation Pakistani real estate expert is launching a tax-advantaged qualified opportunity zone fund in New York next year, a big opportunity by Mohammed Ali Rashid’s standards but small in the real estate development world with his $20 million equity fund that will invest in a small portfolio of properties and real estate equity investments in high-growth markets across the New York state area or where opportunities present themselves whether it’s in Allapattah outside of Miami or in Newark Jersey.
Rashid believes this fund will offer a mix of tax savings, investment returns, and community impact. He hopes to make it known that Pakistani immigrants who come to America can be as successful as they see or hear about overseas if they are willing to work hard.
What Investors Love About Opportunity Zones
Mohammed Ali Rashid’s first attempt at a qualified opportunity zone fund (QOF) is exactly what many investors have been searching for or that’s what Rashid hopes for at least. Investors want opportunities to minimize their tax liabilities while maximizing their long-term investment opportunities.
The Genesis of Opportunity Zone Fund
The Tax and Jobs Act of 2017 established opportunity zone funds. These funds were set up to stimulate economic growth in distressed communities across the United States. An investor who holds their QOF for over ten years will receive their capital gains tax-free.
Tax is a big headache for most investors. No one wants to struggle hard to make a profit only to end up paying a significant portion of the profit as tax and this is a rare opportunity for the opposite to happen in New York.
Rashid’s QOF offers investors the ability to lower and eliminate long and short-term capital gains tax liabilities. This is done by completing developments that have the biggest impact on the community and investing in professionally managed funds.
According to Mohammed Ali the young entrepreneur not the boxer, assets of the opportunity zone fund will be acquired at a discount relative to the current market prices now that we are seeing cooling in the real estate market with increased lending rates. This will be made possible by a proprietary acquisition platform that will be developed after we successfully complete 5 deals.
Ali Rashid will pursue opportunistic property investment strategies. This includes substantial renovations of existing assets, new construction, and new development.
Mr. Rashid has seen a unique opportunity in the current real estate market. With asset prices expected to fall further and many investors being faced with capital constraints, this offers an attractive entry point into particular developments where an opportunity zone was going to be developed but the owners are deciding to liquidate instead.
Portfolio of Investments
Ali’s first investment is expected to be at the heart of New York City where he has resided since he came to America. This project will be a up to a 10-acre mixed-use commercial development and is targeting a location around the city for the first project as locations are being scouted. He is also considering multifamily developments all over New York State.
With the current shortage of housing and skyrocketing rent prices, Rashid hopes to address this with new residential developments. He believes that affordable housing is a basic right of every American. Unfortunately, houses in major cities including New York City are beyond the economic reach of most Americans and even further for the global population at large.
For the third property to develop Ali plans to invest in a mixed-use sports complex and several residential treatment centers throughout the U.S. that are top rated but not in an opportunity zone. Mr. Rashid firmly believes that health is wealth and that is why he is making a considerable investment in medical facilities.
An Able Team
Rashid is confident that he has an able team to back up his ambitions. He is looking to bring on only the best of the best. Members of his last real estate team all had extensive experience in commercial real estate development or were eager to learn. Ali has developed deep relationships with different players in the opportunity zone market and is ready to capitalize on it now while positively impacting the community.
Apart from maximizing returns and reducing tax liabilities, Ali Rashid hopes that his fund will have community impact. He always has the best interests of the community at heart. According to him, it is not all about the money, but it is about the number of lives that are transformed.
About Mohammed Ali Rashid
Mohammed Ali Rashid delivers a full suite of alternative investments and was recently named a top 100 Asian American leader for his work in the real estate field and investment market contacts that is made up of family offices, high-net-worth individuals, institutions, and broker-dealers.
The views and opinions expressed in the preceding sponsored article are those of the author and do not necessarily reflect the views of The DI Wire.