How to Build Passive Wealth Through Real Estate Investing with Mustafa Ladha

Mustafa Ladha (00:00)

that led me to medicine, the idea of like I would help people with their physical health. Then that led me to, hey, I don’t think this is the most efficient place for me to spend my time. From an opportunity cost perspective, I don’t know if I will enjoy this or if I will be able to help people as much as I want to at a very visceral level. I want to own the hospital, not work in the hospital. So that transitioned to, hey, I want to help people with their financial literacy.

Michelle Tack (00:08)

Mm-hmm. Mm-hmm.

Right.

Right.

Mustafa Ladha (00:23)

and this is something that’s really important to me. And then that led to, hey, what’s the most efficient way to help people make money? To me, it’s real estate.

Michelle Tack (02:03)

Hi everyone, I’m Michelle Tack. I am the leader of today’s event at Real Estate Pros. Happy to have everybody on the podcast today. Super thrilled to have Mustafa Ladha on the podcast today. Just say hi to everyone so they can get used to your voice Mustafa.

Mustafa Ladha (02:21)

Hello everyone, nice to hear you.

Michelle Tack (02:23)

Thank you. Mustafa is based in New Jersey and really has a great strengths in being able to find properties to invest in, help investors invest in funds for returns, financial wellness, does, know, finds properties, ⁓ construction, the whole bit, as well as general wellness in terms of ⁓ finance.

For those that may not come from your world, Mustafa, in terms of what you do, et cetera, can you explain your core business and what markets you serve?

Mustafa Ladha (03:03)

Yeah, great question, Michelle. So I come from Earth, that’s my world. I think everyone listening to this is on that same world. ⁓ What I do fundamentally is I build passive real estate investment opportunities for people. And that can sound like a mouthful, it can sound like it doesn’t exist.

Michelle Tack (03:09)

I love that.

Mustafa Ladha (03:21)

What I do at a very basic level, Michelle, is I break it down for people. A lot of people are looking to get into investing in real estate, but they don’t know what that means. They think the house that they own and the mortgage that they’re paying every month means they’re a real estate investor. So typically I have to start very respectfully to kind of help people know what they don’t know, help people to identify what might be their investment strategy, uncover why it might be their investment strategy.

and then build out that solution for them. It’s one of those situations, Michelle, where I can show you a syndication where we’re doing ground-up construction in an opportunity zone where you’re going to make 20 % plus IRRs. But if you don’t know what any of those words mean, you can’t really value it. And so to me, that’s the problem when I look at real estate. It’s typically that a person is very good at what they do, but they’re not able to explain it at a fifth grade level.

So a lot of times, and with this audience it’s different because everyone’s very knowledgeable with real estate, so it’ll be more technical than most of my conversations. Most of my conversations are at a fifth grade level to talk about how to make money and to really move very slow. And the reason is because people are very

Michelle Tack (04:11)

Yes.

Mustafa Ladha (04:28)

good at what they do, they might not be very good at what I do. So it’s important to talk to people at their level for what I do, if that makes sense.

Michelle Tack (04:32)

Right?

Yeah, and stuff I wouldn’t presume that everybody or assume that everybody on this call or in the podcast has a level of knowledge that you do, and that that’s clearly what makes you different. And the amount of we were talking earlier when we were getting ready for the podcast, the amount of time and effort that you put in and have learned.

So you are the SME, subject matter expert here. ⁓ So for those that are listening, certainly you have great wisdom. In terms of the markets, what markets do you serve, both from a location standpoint, but ⁓ types of markets that you’re serving?

Mustafa Ladha (06:04)

Good question, Michelle. So I invest a lot in opportunity zones outside New York City in New Jersey. I do do some other investments in other markets, but I would say 97 % of what I do is in New Jersey.

Michelle Tack (06:11)

Mm-hmm. Mm-hmm.

Got it and you live there so clearly I would think the reason is is that you understand it. You understand the people and you understand the locale. Would that be accurate accurate statement?

Mustafa Ladha (06:31)

I think it’s a valid assumption, but it’s not really the reason. The reason fundamentally

Michelle Tack (06:34)

Accurate. Okay. All right.

Mustafa Ladha (06:36)

is that I was able to build out a very strong team. I was able to build out a very strong team in New Jersey with a developer that has over 30 years experience developing. So the way I look at it, Michelle, is people can make money in an infinite number of ways. But if you realize that you’re very good at something, you spend five, 10 years being an expert in your trade, and then you find other people who are very good at what they do, then you can efficiently talent stack and create more value for the market. The way that I create value

Michelle Tack (06:41)

Mm-hmm.

Mm-hmm.

Mustafa Ladha (07:05)

for the market is by getting my investors the highest return possible. The more money they make, the better my product is. So that’s really what I focus on. When I come across that developer who’s doing amazing work in Texas or California or North Dakota, wherever it is, then I will be very interested in that developer and those opportunities. But it’s to say that a lot of the deal flow that I typically come across in New Jersey is very lucrative. So that’s where I typically spend a decent amount of my time.

Michelle Tack (07:36)

That makes sense.

You know, one of the strengths that I noticed about you when we were again prepping for this call today is that, you know, you’ve done a lot in terms of the size of funds that you have been, size of the amount of investment that you’ve been able to accrue, you know, by at a young age, by 26 or, know, or 28 years old.

And then have it very programmatic in terms of understanding the gating factors from, you know, the particulars of the numbers, etc. ⁓ Can you talk to you know how you’re able to do that and have the? ⁓ Company run smoothly.

Mustafa Ladha (08:21)

Yeah, think fundamentally, I think fundamentally Michelle comes down to being very blessed. I’ve been in a very good position. ⁓ So I’m one of those people who views, you know, everything is kind of from God, whether it’s good or bad, it’s a test. For me, this is not where my life started, Michelle. This is not how I thought my life would be necessarily. I studied genetics. I went to medical school. I worked in big pharma and it was a transition. The whole goal of my life has always been like, how can I help people?

Michelle Tack (08:21)

your company.

Mm-hmm.

Mustafa Ladha (08:48)

that led me to medicine, the idea of like I would help people with their physical health. Then that led me to, hey, I don’t think this is the most efficient place for me to spend my time. From an opportunity cost perspective, I don’t know if I will enjoy this or if I will be able to help people as much as I want to at a very visceral level. I want to own the hospital, not work in the hospital. So that transitioned to, hey, I want to help people with their financial literacy.

Michelle Tack (08:57)

Mm-hmm. Mm-hmm.

Right.

Right.

Mustafa Ladha (09:12)

and this is something that’s really important to me. And then that led to, hey, what’s the most efficient way to help people make money? To me, it’s real estate.

That doesn’t mean that that’s the answer for everybody. So when I get on calls, when I’m talking to people, typically it’s a stranger who I met on WhatsApp or LinkedIn or something like that. I’m trying to understand them. I’m trying to actively listen to their strengths, their weaknesses, do their SWOT analysis, so to speak, and then dissect that for them on the call to say, hey, this is what I’m hearing. Maybe real estate is not the right answer.

Michelle Tack (09:21)

Mm-hmm.

Mm-hmm, yeah, sure.

Mustafa Ladha (09:41)

Hey, this is what I’m hearing maybe real estate is. And I think that authenticity speaks volumes versus like a salesman type approach of like, everyone is a lead that I need to close. I need to efficiently, aggressively track my metrics. I need to close, you know, 20 % of my calls or 100 % of my calls.

Michelle Tack (09:42)

Right. Mm-hmm.

Mustafa Ladha (09:58)

I’m not there yet where I track all those metrics. I will be at some point in time. But even when I’m tracking those metrics, the goal isn’t to drive a sale and raise capital. The goal is to provide genuine

and

value, which is very qualitative.

Michelle Tack (10:12)

Yep.

Mustafa Ladha (10:48)

And when I started out, Michelle, you know, I started out, let’s say in 2018 or so, there was a certain image and impression of a salesperson. Today, that impression has changed where you don’t need to be as boisterous per se, but typically the louder personalities typically fill the room. You nicely gave me many compliments, which I appreciate on like what I’ve been able to accomplish. But I think a lot of times,

Michelle Tack (10:56)

Mm-hmm. Mm-hmm. Yep.

Mustafa Ladha (11:10)

The way that I understand the value that I create is by talking to my clients and trying to understand why is the CFO of a hedge fund investing with me? Why is the CIO

Michelle Tack (11:14)

Mm-hmm. Yep.

Mustafa Ladha (11:18)

of investment of another major company, why are they investing with me? What value am I creating for them? And I think that market feedback is really powerful because then you can look at AUM, you can look at the 291 investors that I’ve made over $20 million in distributions too. I’ve made people a lot of money. You can look at those metrics and you can gain a

of value and satisfaction from that. But to me it’s not that. To me it’s to look at the

Michelle Tack (11:43)

Yep.

Mustafa Ladha (11:45)

people and the lives that you’ve changed.

Michelle Tack (11:47)

Yep, you know. I’m just really impressed by you know that answer from from a couple perspectives. One is that. Your passion to be of service is allowing that attraction of the type of people you want to help or people in general, right? You want to be one helper or you wouldn’t have been in medicine. You want to do that in real estate and you’re not putting.

The dollars ahead of that and that is very unusual and when we talk to we talk to our company as a large membership and we talked to a bunch of people, but the most successful people we find do that. They’re not putting the actual dollar is the most important part of their entire business. So I commend you on that in terms of you know every operator I talked to has a moment where things got real.

And what I mean by that is, you know, maybe they didn’t have an answer or a deal slipped or you had to save something or it could be a relationship. Can you talk about anything that maybe, you know, a deal went sideways or a time that you had to pivot fast relative to your business? I think it’d be instructive to learn from you.

Mustafa Ladha (13:01)

Yeah, that’s a great question, Michelle. I think there’s a couple different angles to take the question from. So when it comes to the relationship, right, I had a client who I’d worked with maybe for about five years or so. He was invested in a diversified fund and he wanted to exit his, let’s say, 400K that he had invested in capital that represented, let’s say, around maybe 7 % or so of the fund.

Michelle Tack (13:02)

Saf, are you still there?

Mustafa Ladha (13:25)

So as a percentage, it’s a sizable amount that he’s looking to exit. And it’s a situation where we’re saying, hey, give us three months, which is the normal process, and we’ll be able to exit that position. And he’s explaining why he wanted to exit his position. In my mindset, it’s your money. I don’t really need a reason.

Michelle Tack (13:36)

Mm-hmm. Mm-hmm. Mm-hmm. Mm-hmm.

Mustafa Ladha (13:43)

like it’s your money, you want it back, no problem, hold periods over, you know. And he’s building out that conversation to say, hey, I’m looking to build out an investment strategy for my son to kind of create a job for him. And I’m like, okay, great. Here are some avenues that might be worth pursuing, right? I don’t run those companies, but they might be worth looking into to deploy this 400K when you get that money back.

Michelle Tack (13:49)

Mm-hmm.

Mustafa Ladha (14:04)

Ultimately, he got that capital back and he ⁓ eventually redeployed it with us, let’s say over… ⁓

Michelle Tack (14:10)

Mm-hmm.

Mustafa Ladha (14:11)

Maybe there was a

year gap where he tried different things and then he decided to invest again. In that process where he’s exiting the capital, sometimes it’s like, hey, why is it taking three months? Because real estate is illiquid, we have to sell positions. So it’s about also communicating to investors like your limitations, where you’d love to just press sell and immediately have 400K liquid, but that’s not how it works in real estate.

Michelle Tack (14:22)

Right. Yep.

Mm-hmm.

Mustafa Ladha (14:33)

you’re only making money because we’re deploying that capital into physical assets. When we sell those physical assets, it takes a little bit of time. So it’s about communicating that gap. But also for somebody else, that gap can be annoying. You know, maybe he wants his 400K today and I have to say, hey, like, and I’m not going to somebody saying, hey, it’s written in the contract here that it takes three months. I’m just saying it like as a friend, as a person, like, hey, this is our process, but it can create friction. Now for somebody like me,

Michelle Tack (14:38)

Mm-hmm. Mm-hmm. Sure. Mm-hmm. Mm-hmm.

Yep.

Mustafa Ladha (14:58)

I like to live a frictionless life. I don’t like to have any friction. I don’t necessarily like to be a public facing person or anything like that. I like to be very private. But it’s to say that if the ethos, if the mentality was to help people, then you have to help people where they’re at. And sometimes that means a little bit of discomfort. So for me, that conversation was uncomfortable. And then it’s to get that feedback. And the gentleman’s response was very educational for me.

Michelle Tack (15:02)

Yeah.

Yeah.

Mustafa Ladha (15:21)

to say, Mustafa, we’ve been working together for five years. If this is the most difficult conversations that we have and that we’ve had, then I’m fine with that and I think you’re doing a great job. I’m not exiting my capital because of performance issues or because of you know, let’s say etiquette issues or lack of trust or anything like that. I’m exiting because I want to create a solution that makes more sense for my family. And I’m like, great, this is your money to help your family. That’s the goal.

Michelle Tack (15:25)

Yep, yep.

Yes, right, yeah. Yep.

Mustafa Ladha (15:49)

So awesome, good luck, let me know how I can help. Now that’s one situation

on a person, which was maybe one of your questions. The other question was on a deal or an opportunity or a project, right? We do like rezoning.

Michelle Tack (15:58)

Right. Yep.

Mustafa Ladha (16:41)

In the process of rezoning, it’s not a situation where you go in for 15 units and you always get 15 units, right? We’ve had situations where we’ve gotten 11 units and we’ve sold that entitled land, made a profit, made the investor more money than they expected in a faster period, but through a sale and not a refinance, which means it’s a taxable event. We’ve had other situations where we’ve…

Michelle Tack (16:58)

Mm-hmm. Mm-hmm. Right.

Mustafa Ladha (17:03)

rezoned for less units developed and then sold the building and the investors made more than he was projected to make. In both situations that rezoning was less than we projected, but how we pivoted was important and it really depends on the project. So there’s a lot of nuances that come into like project management and it’s just to say, hey, how do we optimize to make the investor the most as a time-weighted return?

Michelle Tack (17:11)

Mm-hmm.

Mustafa Ladha (17:27)

And that’s our skill set to say, if the investor is making a lot of money, then we will also figure out a way to make money. And that’s really what we optimize for versus maybe optimizing for acquisition fees or something like that.

Michelle Tack (17:28)

Right.

Mm-hmm.

Yep. That. Yeah,

that’s awesome. I love that. What’s the next big goal for you in the next year? Six months, etc. What are you working on?

Mustafa Ladha (17:46)

That’s a great question, Michelle.

I think it’s hard for me to answer because a lot of times people like qualitative answers, right? It’s nice to say I helped 291 plus people. It’s nice to say I’ve made them over 20 million. It’s nice to say that I manage over 64 million, which a number like how much I manage as investor capital is irrelevant. You know, the equity number, let’s say is over 150. That’s irrelevant. The doors is over 1,723 doors. That’s irrelevant. It doesn’t mean that the cause of cashflow is there or anything like that.

Michelle Tack (18:06)

Mm-hmm.

Mustafa Ladha (18:16)

It’s just a metric. So for me, Michelle, like when I look at my life, it’s not a certain capital raised. It’s not a certain, you know, number of projects funded or anything like that. It’s to say that I want to help as many people as possible. And I want to notice that trend going up. But also I want to be aware of my limitations, right? If you’re always helping more people, that’s great. But you need to build the right systems to efficiently help people rather than saying, hey, I’m, helping you. I’m here to help you. And then you fall short.

Michelle Tack (18:19)

Yep. Mm-hmm. Mm-hmm. Mm-hmm.

Mustafa Ladha (18:45)

So to me, it’s to say that right now I spend time on LinkedIn. I create educational content there. I run my own educational podcast. I spend a decent amount of time

Michelle Tack (18:54)

Mm-hmm. Mm-hmm.

Mustafa Ladha (18:56)

increasing people’s financial literacy because that’s the goal. That’s the ultimate goal.

Michelle Tack (19:00)

Mm-hmm.

Mustafa Ladha (19:01)

But along the way, I do spend a decent amount of time also managing the portfolio and actually fundamentally making people money because that’s more tangible than working on the soft skills, which is more exponential. When you help somebody with soft skills, you empower them to go fish. When you make people money, it’s like you’re giving them a fish. Both are valuable. They’re just at different, you know, life cycles, if that makes sense.

Michelle Tack (19:02)

Yep. Yep Yes Yep It does

You know, you’ve been ⁓ a great guest. want to thank you for everything that you’ve brought to the table today. I’ve been impressed by the level of it’s heartwarming to hear the level of your perspective from doing the right thing for others and being of service. And then the money comes. so Mustafa, before we wrap up, I’m sure people would love to get in contact with you.

Can you provide your contact information and then we will wrap up?

Mustafa Ladha (20:00)

Sure, Michelle, it be my pleasure. It’s been an honor to be on the podcast. I appreciate the invitation.

The best way to connect with me would probably be on LinkedIn. My name is Mustafa Ladha It’s spelled as in Mary, U as in Unicorn, S as in Sam, T as in Tiger, A as in Apple, F as in Frank, A as in Apple. That’s the first name, Mustafa. The last name is Ladha . It’s L as in Leo, A as in Apple, D as in David, H as in Harry, A as in Apple. Again, that’s Ladha . And then the other option is to email me. It’s ML, so that’s as in Mary,

as in Leo.

the @ sign, velocecapital.com That’s V as in Victor, E as in Elephant, L as in Lion, O as in Orange, C as in Charlie, E as in Elephant, that’s veloce, and then capital. C as in Charlie, A as in Apple, P as in Peter, I as in Igloo, T as in Tom, A as in Apple, L as in Leo.com. So either way is gonna be a good way to reach out to me, and then ultimately,

provide value for you. If that means investing in real estate, okay. If that means helping you scale however you’re looking to grow, then that’s going to be what’s going to drive more value for you and that’s where I’m going spend most of the time.

Michelle Tack (21:15)

Yeah, we did cover this in the time allotment, but one of the things I would encourage people to to know is how you use WhatsApp. We won’t review it today, but how you use WhatsApp to create an investor community that is really your network. So it’s pretty impressive. Again, Mustafa, thank you very much for those that are listening to the podcast today. We encourage you to.

continue to check in. have some great operators in all types of businesses related to real estate that have great detail like Mustafa does about their business. ⁓ If you aren’t a subscriber, please feel free to subscribe. We encourage you to do that and again Mustafa great success ⁓ wishes to you ⁓ going forward.

Mustafa Ladha (22:00)

Thank you so much, Michelle. It’s been a pleasure being here.

Michelle Tack (22:02)

Absolutely. Thank you.