Have questions about how the Home Investment Program works?
At Halal Inc, we believe that the best customer is an informed customer so we have done our best to provide you with as much information as possible.
To your left is a list of some of the most frequently asked questions that we hope you will find useful. We have also put together a detailed overview of How The Home Investment Program works. However, if you still have questions that are not answered, we are always happy to help.
We can be reached by phone at (703) 755-0678 or you can use our online contact form.
How does the program work?
Halal Inc. works with you, the Lead Buyer, to form a true Partnership that purchases the home you are interested in. Each partner (you and Halal Inc) owns a percentage of the Partnership based on the amount of money contributed. For example, if you want to purchase a $100,000 home but only have $10,000. Halal Inc will invest $90,000 and you will invest your $10,000 giving Halal Inc a 90% share and you a 10% share. Over time, you can purchase Halal Inc's share and your share will increase while our share decreases. During the life of the partnership all expenses, profits, and losses will be shared by both partners in proportion to their share at the time. If the roof needs to be repaired and you now own 23% and Halal Inc owns 77% then we carry 77% of the cost while your portion is only 23%.
You as the Lead Buyer have the option, but not the obligation, to rent the home while you purchase ownership share. Should you decide to rent, one, three, and five year lease agreements are available. All lease agreements conform to the norm, including all rights and responsibilities. If you do not wish to rent, but would like to continue your investment in the home, a suitable tenant will be found to lease the property. All income from property rental is also shared in equal proportion to ownership.
At the time of sale, the profit or loss on the home is shared in the same way. So, if you own 50% and we own 50% and the house sells for $125,000 you will get $62,500 and so will we. If the house sells at a loss for $80,000 you will get $40,000 and so will we. Even when the property depreciates you will always walk away with your portion of the sale. You NEVER owe money, and you are never obligated to purchase or rent.
Click here for a more detailed overview.
How is Halal Inc. different?
Unlike other programs, the Home Partnership Program is a true debt-free, riba-free, mortgage-free, Shariah based solution. It is a chance to invest in a home without riba and without obligation to rent or buy.
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Do I sign mortgage paperwork?
No. Since there is no loan there is no mortgage paperwork. The home is fully owned by the Partnership from day one and there is never a debt owed from one party to the other.
No loan = no interest = no lien = no foreclosure ...EVER.
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Do I owe money?
No. The Home Partnership Program is a simple agreement by two parties (you and Halal Inc) to invest jointly in a property and to share in the risk as well as the reward.
It is just like buying a cow with your brother. You both put money in, you both share the cost for care, and you both get the benefits from its milk or meat. Only in this case, we offer you the opportunity to live in the home, if you like, and to purchase our share over time.
The only monetary obligation you ever carry is the same as any standard rental agreement if you decide to rent the home while you are purchasing our share.
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Am I obligated to rent?
No. However, since the goal of the Partnership is to invest in real estate and to make profit for all partners, the home should not remain unoccupied for more than 60 days.
If you do not wish to rent, and a suitable tenant is not found within that period of time, the Partnership will sell the property and distribute the sale proceeds to each partner in proportion to ownership share at the time of sale.
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Am I obligated to buy?
No. You are never obligated to buy ownership share. Because we adjust the cost every year to reflect the true market price, we encourage you to purchase as much as you can afford during market downturns. In fact, a market downturn is every real estate investor's favorite time to buy - think of it like a clearance sale on the home you want. We in turn, welcome your increased share purchase in market downturns because we are then able to invest that money in other homes at an equally great price. Just like everything else in the Home Investment Program, your benefit is also our benefit.
Even during market upturns, we encourage you to make a yearly purchase of at least 2% to 3%. Although it is not required, and the share price is higher, it is always preferable to have a steady stream of share increase since the housing market may continue to rise. Your purchase also expresses your commitment to the continued purchase of the property and frees financial resources so we can fund other homes for families just like you.
If at anytime, for whatever reason, you are no longer interested in the home, the Partnership will simply sell the property and distribute the sale proceeds to each partner in proportion to ownership share at the time of sale.
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Is the rent fixed?
No. Just like any other rental lease, the rent is set for the term of the lease but upon renewal may remain the same, or may change. Unlike other programs that pretend to "rent" you the property at a fixed rate of return based on the amount of your loan (which is identical in terms to the prevailing interest rate), our rent is based on the real-life market rate for rent in your area.
You are never obligated to renew your lease and leases are available for as little as a one year term or as long as a five year term.
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Is the cost of shares fixed?
No. The cost of ownership share is set based on the fair market value of the property at the time you purchase them. This is determined by a yearly assessment based on other similar properties in the area and not by a pre-determined rate of return. If the property value increases, so does the cost of ownership share - if it decreases, then so does the cost of ownership share. This way the home is always purchased at its fair market value.
Since it is a true partnership, we share equally in both loss and gain on the property. This is the most acceptable way to do it according to Shariah, and it is the only fair way to do it for both partners.
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What if I want to sell?
You can sell at anytime without restriction. In accordance with Shariah, as your partner, we have the first option to buy your share at fair market value. If we decline to purchase your share, it can be sold to another interested Lead Buyer or the Partnership can sell the home on the open market.
If your share is sold to another Lead Buyer, you will collect the proceeds from the sale, our share will remain unchanged, and the new Lead Buyer will become our partner.
If the home is sold on the open market, proceeds from the sale with be distributed by the Partnership to each partner in proportion to ownership share at the time of sale.
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Are expenses shared?
Yes! ALL taxes, insurance, Home Owner's Association fees, and normal property repair and maintenance are shared in direct proportion to each partner's share.
Normal repair and maintenance includes but is not limited to:
So if, for example, the deck needs to be replaced due to normal wear and tear, or storm damage, it would be fully paid for by the Partnership.
Just like any other rental agreement, abnormal damages caused by recklessness or neglect on the part of the renter, whether it is the Lead Buyer or any other tenant, may not be covered. So, if the deck needs to be replaced because reasonable precautions were not taken while grilling and the deck was set on fire, the cost would be solely borne by the negligent party.
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Am I a renter or a buyer?
You can be both. You are first and foremost an investor in the Partnership which is formed with the goal of investing in the real estate market by purchasing a home that you as the Lead Buyer are interested in. You have the option, but not the obligation, to continue to grow your share over time until you are the sole owner.
You also have the option, but not the obligation, to rent the property and enjoy the comfort of living in the home you love while you invest. Your identity as an investor is separate from your identity as a renter. A good example is that of someone who owns shares in a hotel chain but still needs to rent a room in order to stay there.
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Are there limits on buying?
No. You can purchase as much or as little of our ownership share as you like at anytime.
Unlike a mortgage, where the profit is made from interest on money lent over time, we are not harmed in any way if you decide to purchase our share at an accelerated pace. Likewise, we suffer no ill effects if you decide to purchase at a slower rate. Because our main purpose is simply to invest in the real estate market, it makes no difference if we are partners with you, or partners with someone else.
We encourage you to purchase more in market downturns to take advantage of the "reduced price" on the property, and to continue purchasing a minimal amount even during a market upturns to ensure a steady increase in your ownership share, but there are no obligations or limits to your purchase amount.
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Can I make home improvements?
Yes. In fact, in cases where the resale value of the home is increased, the Partnership will cover all or part of the cost.
For example, if the home has an outdated kitchen and the total cost of renovating it is $6,000 and the home value will rise by $6,000 or more, the full cost of the renovation will be covered by the Partnership with each partner contributing in direct proportion to ownership share.
In the case of a $6,000 renovation that will increase your enjoyment of the home but only increases the home value by $4,000, the Partnership will share in the cost of $4,000 and you are welcome to cover the rest.
In the case of remodeling that will not increase the value of the home but will increase your enjoyment, such as interior painting, you are welcome to undertake it at your expense.
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Is there a minimum to start?
There no minimum percentage requirement, however, each partner will be asked to invest an initial dollar amount based on the price of the home and the area where it is located upon formation of the Partnership.
The initial investment of each partner will be calculated as a percent of the cost of the home and that will be the starting ownership share. For example, a $5,000 initial investment in a $100,000 home will give you a 5% ownership share. Please bear in mind that the higher your initial investment is the more rental return you receive from the outset and the sooner you will achieve full ownership.
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Can I get cash for my equity?
Yes. Because this is a debt-free program, no partner can borrow against the property, however, Halal Inc offers a unique buy-back program that allows you to get cash for your equity.
In times of need, we will purchase back a portion of your ownership share so you can have cash on hand. We try to satisfy the needs of everyone but, based upon our ability, we prioritize emergency cases over those that are less urgent to ensure the most equitable outcome for those in need.
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Does my credit rating matter?
No. Because the home is fully owned from the beginning, there is never a debt from one party to another so there is never a credit risk.
These are the only factors we look at when qualifying potential partners:
In fact, this program can be a perfect way to build your credit rating if you are just starting out and have no credit history or to rebuild a bad credit score.
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