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Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 06, 2019 2:32 am
by get_g0ing
Hi,

Being a Pakistani settled in US, I'm curious if there are any Pakistani Bogleheads here that are also investing in DHA - Islamabad?

This location comes up often as a prime investment and a lot of US-based Pakistani invest there. In my limited understanding of the Boglehead principles, the bulk of your investment (for a longer time horizon) would be: low-cost, highly diversified index funds (e.g. Vanguard total stock, total international). And focusing on Real Estate in just one city of just one country would not be recommended.

But on the other hand I've seen people make massive returns doing exactly that over the past 10 years.

So I am curious how a Pakistani who understands the Boglehead philosophy would view or comment on this. Do they invest in DHA - Islamabad property?

Thank you.

Re: Any US-based Pakistanis investing in DHA?

Posted: Sat Feb 09, 2019 10:20 pm
by get_g0ing
No one?

Re: Any US-based Pakistanis investing in DHA?

Posted: Sat Feb 09, 2019 10:30 pm
by Tabasco
I think you answered your own question bhai.

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 8:21 am
by Faisal
Two quick questions. Are you Pakistani or an ABCD/BBCD etc.

Secondly is it an investment or are you going to live there?

Oh yes who do you know in Pakistan you can trust?

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 8:36 am
by cdu7
My wife is originally from India, and while not exactly the same, I would say our investing experiences in this reguard may somewhat overlap. We know a lot of Indian Americans (first generation) who were pouring money into property investments back home. There was a real estate boom several years back that seemed like it would never end. It did, and now a lot of these people are stuck with properties they have no way of monotizing and endless complications. Overseas investment in developing property markets is only for those with a ton of knowledge and experience of the local market. And I hope you have someone on site managing everything, who you trust with your life. Just don’t do it.

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 10:19 am
by LadyGeek
This thread is now in the Non-US Investing forum.

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 3:17 pm
by toomuchRE
cdu7 wrote:
Sun Feb 10, 2019 8:36 am
My wife is originally from India, and while not exactly the same, I would say our investing experiences in this reguard may somewhat overlap. We know a lot of Indian Americans (first generation) who were pouring money into property investments back home. There was a real estate boom several years back that seemed like it would never end. It did, and now a lot of these people are stuck with properties they have no way of monotizing and endless complications. Overseas investment in developing property markets is only for those with a ton of knowledge and experience of the local market. And I hope you have someone on site managing everything, who you trust with your life. Just don’t do it.
I'm stuck with USD 2M worth of properties unable to quickly liquidate in India.. No transparency in transaction, unreliable buyers, useless rules, unstable governments, mostly corrupt people and govt officials, most population is trying to fraud you.. I need it here in US but it has been a struggle to liquidate.. I'm assuming it will take me 10 years to liquidate.. I'm not underwater or anything.. The investments cost was around 300K and was done 15 years ago. I wish I had that done that in US..

This is in India the fastest growing economy and the biggest democracy and I have a lot of relatives.. You are talking about Pakistan, one of the most unstable country in the world on the verge of bankruptcy. And close to a civil war every 3 years and every president and PM either getting murdered or jailed or driven/ran away from country. And no one day goes without a bomb blast. Wait til the currency hits 500 Rs per 1 USD... :oops: :oops: :oops: :oops:

So, don't do it.

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 3:41 pm
by LadyGeek
As a reminder, this is a "no politics" forum - for any country.

Please stay on-topic, which is "investing in DHA".

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 5:35 pm
by niceguy7376
toomuchRE wrote:
Sun Feb 10, 2019 3:17 pm
I'm stuck with USD 2M worth of properties unable to quickly liquidate in India.. No transparency in transaction, unreliable buyers, useless rules, unstable governments, mostly corrupt people and govt officials, most population is trying to fraud you.. I need it here in US but it has been a struggle to liquidate.. I'm assuming it will take me 10 years to liquidate.. I'm not underwater or anything.. The investments cost was around 300K and was done 15 years ago. I wish I had that done that in US..
Were you not aware of these when you were buying? What is a struggle to liquidate? It was never easy to bring money back to US without paying any taxes to either US or India.

What is your current visa status in USA? Were you filing tax reports on those assets ?

Re: Any US-based Pakistanis investing in DHA?

Posted: Sun Feb 10, 2019 7:33 pm
by cdu7
niceguy7376 wrote:
Sun Feb 10, 2019 5:35 pm
toomuchRE wrote:
Sun Feb 10, 2019 3:17 pm
I'm stuck with USD 2M worth of properties unable to quickly liquidate in India.. No transparency in transaction, unreliable buyers, useless rules, unstable governments, mostly corrupt people and govt officials, most population is trying to fraud you.. I need it here in US but it has been a struggle to liquidate.. I'm assuming it will take me 10 years to liquidate.. I'm not underwater or anything.. The investments cost was around 300K and was done 15 years ago. I wish I had that done that in US..
Were you not aware of these when you were buying? What is a struggle to liquidate? It was never easy to bring money back to US without paying any taxes to either US or India.

What is your current visa status in USA? Were you filing tax reports on those assets ?
A big issue with the Indian real estate market was that many transactions were/are done with a large portion being cash and then the remaining portion “officially” to under report the taxes etc. There was a big problem when modi did the whole demonetization thing, basically triggered a big time slow down in the real estate market due to a liquidity crisis. Most sellers are struggling to find buyers. It has started to recover, but is no where near the boom times. Also finding someone willing to buy a property 100% on the up and up is near impossible. Investing in India is the Wild West, not bogleheads.

And yes Pakistan is likely on another level of worse in terms of difficulty (although I can’t speak to it directly).

Re: Any US-based Pakistanis investing in DHA?

Posted: Mon Feb 11, 2019 12:22 am
by get_g0ing
Tabasco wrote:
Sat Feb 09, 2019 10:30 pm
I think you answered your own question bhai.
Ji meray bhai, you are right. It's still interesting to know if Pakistanis in US familiar with Boglehead invest in DHA or not.

Re: Any US-based Pakistanis investing in DHA?

Posted: Mon Feb 11, 2019 12:27 am
by get_g0ing
Faisal wrote:
Sun Feb 10, 2019 8:21 am
Two quick questions. Are you Pakistani or an ABCD/BBCD etc.

Secondly is it an investment or are you going to live there?

Oh yes who do you know in Pakistan you can trust?
Faisal bhai,

I am dual, Pakistani but currently settled in US. Not ABCD lol, I moved here :)

Plot investment to sell at higher prices (once the area gets more developed), like is 3-6 years.
Or second option: buy now at lower price, then build house 10-20 years later (assuming that buying the land then would be too expensive). Or can even sell at that point if not needed for house.

Trust: Parents. I myself go every year.

Re: Any US-based Pakistanis investing in DHA?

Posted: Mon Feb 11, 2019 1:21 pm
by toomuchRE
Lets assume you invest 100K USD and buy a plot. For 1.4 Crores PKR.
Lets assume PKR will be 300 in 5 years and the plot worth 1.4 will be 2 Crores.

You are bringing back 66K and lost 34% .. Its a great way to lose money... :moneybag :moneybag :moneybag

10 years ago USD was 60PKR. Now its 140. So it depreciated around 233%. so 140 to 300 is not far fetched.. Might be looking at 500..

Re: Any US-based Pakistanis investing in DHA?

Posted: Tue Feb 12, 2019 10:30 pm
by get_g0ing
toomuchRE wrote:
Mon Feb 11, 2019 1:21 pm
Lets assume you invest 100K USD and buy a plot. For 1.4 Crores PKR.
Lets assume PKR will be 300 in 5 years and the plot worth 1.4 will be 2 Crores.

You are bringing back 66K and lost 34% .. Its a great way to lose money... :moneybag :moneybag :moneybag

10 years ago USD was 60PKR. Now its 140. So it depreciated around 233%. so 140 to 300 is not far fetched.. Might be looking at 500..
That's interesting. But are there any forecasts of this 300 PKR, or just a random guess?

Re: Any US-based Pakistanis investing in DHA?

Posted: Tue Feb 12, 2019 10:31 pm
by get_g0ing
cdu7 wrote:
Sun Feb 10, 2019 8:36 am
My wife is originally from India, and while not exactly the same, I would say our investing experiences in this reguard may somewhat overlap. We know a lot of Indian Americans (first generation) who were pouring money into property investments back home. There was a real estate boom several years back that seemed like it would never end. It did, and now a lot of these people are stuck with properties they have no way of monotizing and endless complications. Overseas investment in developing property markets is only for those with a ton of knowledge and experience of the local market. And I hope you have someone on site managing everything, who you trust with your life. Just don’t do it.
Interesting. Thanks for sharing this experience.

Re: Any US-based Pakistanis investing in DHA?

Posted: Tue Feb 12, 2019 10:42 pm
by AlohaJoe
toomuchRE wrote:
Sun Feb 10, 2019 3:17 pm
I'm stuck with USD 2M worth of properties unable to quickly liquidate in India.. No transparency in transaction, unreliable buyers, useless rules, unstable governments, mostly corrupt people and govt officials, most population is trying to fraud you.
I also don't know anything about Pakistan but my experience in another similar-ish market -- Vietnam -- sounds pretty identical.

Purchases are often in cash. Usually you lie to the government about the price paid. Have a "real" contract and "fake" contract and submit the fake contract to the tax department. No such thing as escrow -- you just meet in person, hand them the money, and get a piece of paper back. No such thing as title searches or title insurance. You go the local planning department and bribe someone to let you look at the title records and hope it is up-to-date. Completing the transaction takes anywhere from 1-3 months depending on how much you bribe the right people.

If you don't physically live in the house and don't have tenants, plenty of stories of someone showing up and starting to live there, maybe even with a fake title. Maybe even using the fake title to sell to someone else. Then you get mired in years of legal issues.

Worries about currency controls when trying to get the money back out. Worries about sudden depreciation wiping out 10 years of profits. And so on.

I know people who invested into "sure thing" areas that have seen their investment go nowhere. A large plot of land near the site of the new airport...and the a change of government and the new airport plans get pushed back (at least) 10 years. Now they've got hundreds of thousands of dollars locked up that nobody wants. Someone buys land on a resort island where (rumors say) prices are doubling every six months. And the government passes a new anti-property bubble law for that island saying non-residents aren't allowed to sell until they've held for 5 years. Now they have an empty plot of land and have to decide whether to spend hundreds of thousands of dollars more developing it. People who bought apartments in the new luxury buildings that went up...until everyone realised that dozens of projects were coming online at the same time -- over 15,000 new units in a single year in one city -- and they can't even rent them out. A friend lives in one of those new luxury apartment towers and of the 10 apartments on his floor, only 2 are rented. The building have been open nearly a year.

The OP looks like the Pakistani equivalent of all the people that jumped into cryptocurrency when they heard stories about other people getting rich quick. Bogleheads are pretty against anything that sounds even vaguely like "get rich quick". Bogleheads are about "get rich slowly".

Re: Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 13, 2019 4:46 am
by Valuethinker
get_g0ing wrote:
Wed Feb 06, 2019 2:32 am
Hi,

Being a Pakistani settled in US, I'm curious if there are any Pakistani Bogleheads here that are also investing in DHA - Islamabad?

This location comes up often as a prime investment and a lot of US-based Pakistani invest there. In my limited understanding of the Boglehead principles, the bulk of your investment (for a longer time horizon) would be: low-cost, highly diversified index funds (e.g. Vanguard total stock, total international). And focusing on Real Estate in just one city of just one country would not be recommended.

But on the other hand I've seen people make massive returns doing exactly that over the past 10 years.

So I am curious how a Pakistani who understands the Boglehead philosophy would view or comment on this. Do they invest in DHA - Islamabad property?

Thank you.
Not Pakistani but I have read a lot of these threads wrt India.

The opportunity in Pakistan is clear - it's basically a cheap India -- India 20-30+ years ago in valuation terms. Human capital, energy, entrepreneurship (especially in Karachi, Lahore) but huge political and structural problems. I am old enough to remember when people talked about India the way we now sometimes talk about Bangladesh and Pakistan (and Nigeria) - as hopeless countries, starving. That's no longer true of Bangladesh and it's not true of Pakistan - westerners forget just how backward and corrupt the United States or Great Britain once were -- the Industrial Revolution that is happening in 50 years in those countries took 150+ years in Great Britain and the USA.

You basically have to accept that if you put money in, you might not be able to get it out on any time frame.

You either buy something that is of use to your family there (perhaps to live in?) where they can manage it for you OR you buy land and hope in 5+ years somebody needs that land for development or expansion and does not find a cheap way to expropriate you. Fringes of major cities and major transport nodes.

This is not a boglehead like investment. You won't be able to live on this money any time soon. It would be a total fire-and-forget strategy.

Re: Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 13, 2019 7:15 am
by cdu7
Deleted due to being potentially contentious/ political (relating to climate change impacts on investments)

Re: Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 13, 2019 7:29 am
by Valuethinker
cdu7 wrote:
Wed Feb 13, 2019 7:15 am


Something else to think about in the longer term with the three countries you mention is climate change. If the IPCC report is to be believed, most of Bangladesh will be under water and large parts of India and Pakistan will be physically uninhabitable. This is by the end of the century at the latest, assuming we don’t have a massive geoengineering project to stop it. Climate change is set to devestate the developing world.
Historically the moderators have banned any discussion of this subject as a forbidden topic (contentious, political). At the very minimum we have to make this directly connected to investing.

So I shall summarize it in investing terms: don't buy a home at sea level, and preferably several metres above sea level.

The implications for coastal cities, as well as for water supply, are suitably horrifying, but an index fund investing approach does not really allow for investment policy decisions that accommodate to these factors. You have to trust that the market as a whole knows more about the risks and opportunities than you do.

Re: Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 13, 2019 7:43 am
by cdu7
Valuethinker wrote:
Wed Feb 13, 2019 7:29 am
cdu7 wrote:
Wed Feb 13, 2019 7:15 am


Something else to think about in the longer term with the three countries you mention is climate change. If the IPCC report is to be believed, most of Bangladesh will be under water and large parts of India and Pakistan will be physically uninhabitable. This is by the end of the century at the latest, assuming we don’t have a massive geoengineering project to stop it. Climate change is set to devestate the developing world.
Historically the moderators have banned any discussion of this subject as a forbidden topic (contentious, political). At the very minimum we have to make this directly connected to investing.

So I shall summarize it in investing terms: don't buy a home at sea level, and preferably several metres above sea level.

The implications for coastal cities, as well as for water supply, are suitably horrifying, but an index fund investing approach does not really allow for investment policy decisions that accommodate to these factors. You have to trust that the market as a whole knows more about the risks and opportunities than you do.
I deleted the post to avoid an issue, I do think that climate change is a valid factor in making long term investment decisions especially in reguard to property.

Re: Any US-based Pakistanis investing in DHA?

Posted: Wed Feb 13, 2019 10:20 pm
by get_g0ing
AlohaJoe wrote:
Tue Feb 12, 2019 10:42 pm
toomuchRE wrote:
Sun Feb 10, 2019 3:17 pm
I'm stuck with USD 2M worth of properties unable to quickly liquidate in India.. No transparency in transaction, unreliable buyers, useless rules, unstable governments, mostly corrupt people and govt officials, most population is trying to fraud you.
I also don't know anything about Pakistan but my experience in another similar-ish market -- Vietnam -- sounds pretty identical.

Purchases are often in cash. Usually you lie to the government about the price paid. Have a "real" contract and "fake" contract and submit the fake contract to the tax department. No such thing as escrow -- you just meet in person, hand them the money, and get a piece of paper back. No such thing as title searches or title insurance. You go the local planning department and bribe someone to let you look at the title records and hope it is up-to-date. Completing the transaction takes anywhere from 1-3 months depending on how much you bribe the right people.

If you don't physically live in the house and don't have tenants, plenty of stories of someone showing up and starting to live there, maybe even with a fake title. Maybe even using the fake title to sell to someone else. Then you get mired in years of legal issues.

Worries about currency controls when trying to get the money back out. Worries about sudden depreciation wiping out 10 years of profits. And so on.

I know people who invested into "sure thing" areas that have seen their investment go nowhere. A large plot of land near the site of the new airport...and the a change of government and the new airport plans get pushed back (at least) 10 years. Now they've got hundreds of thousands of dollars locked up that nobody wants. Someone buys land on a resort island where (rumors say) prices are doubling every six months. And the government passes a new anti-property bubble law for that island saying non-residents aren't allowed to sell until they've held for 5 years. Now they have an empty plot of land and have to decide whether to spend hundreds of thousands of dollars more developing it. People who bought apartments in the new luxury buildings that went up...until everyone realised that dozens of projects were coming online at the same time -- over 15,000 new units in a single year in one city -- and they can't even rent them out. A friend lives in one of those new luxury apartment towers and of the 10 apartments on his floor, only 2 are rented. The building have been open nearly a year.

The OP looks like the Pakistani equivalent of all the people that jumped into cryptocurrency when they heard stories about other people getting rich quick. Bogleheads are pretty against anything that sounds even vaguely like "get rich quick". Bogleheads are about "get rich slowly".
Very interesting. Useful to keep these kinds of things in mind and not be gullible.

For Pakistan, I can't speak for each and every area, but for the area I mentioned DHA (which is a housing society), none of this is possible. Everything is official and legal, just like in US.