Bezos's Arrived Homes

Salam,

Has anyone investigated this to see whether it is a halal investment option? Aside from the leveraged option that I’m pretty sure isn’t halal, other options appear to be fully funded by pooled investor cash:

Jeff Bezos-Backed Arrived Homes Acquires Another $23 Million Worth Of … Jeff Bezos-Backed Arrived Homes Acquires Another $23 Million Worth Of Single-Family Rental Homes As Number Of Active Investors Doubles

Aside from the halalness question, whether this is a socially good thing appears questionable (probably not good for renters, but the same can be said for any institutional landlord). The argument they make in defense is people will own property where otherwise they wouldn’t. It’s true, someone can own a few hundred dollars in something and be renting at the same time. The same can be said for owning REIT shares, and I’m not sure there is any material difference of owning a share of a specific property vs plain old REIT shares.

If they were worse than average in responsiveness to legitimate rental issues, I’d think this should backfire via reputational damage such that “good” renters would avoid renting these homes if they were known to be bad landlords.

One concern I have about REITs that are in SPRE, as someone recently asked, is some tend to exceed the debt limit ratio of 1/3 as the market goes down, and it is clearly a bad deal to be selling when it is down after buying when it was up and clear of that ratio. There is some leeway given for exceeding the ratio when there is expectation it is temporary, though how much time seems to be a grey area. Having something financed with no leverage would entirely avoid this issue.

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The non-levered option looks good at a quick glance but it would be best to review their terms with a qualified scholar. In fact, it wouldn’t be a bad idea to email the company and encourage them to obtain a shariah certification as it’ll only help their business. I also agree that it’s probably a much safer option from an Islamic standpoint than REITs but the liquidity aspect could pose a challenge for some people.

How does this compare to Fundrise?

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Good idea, I just emailed them about it. I heard of Fundrise but hadn’t really looked into it until now. I saw your earlier post about it and the FAQ link about whether they had an interest free option and how they said they didn’t.

About the liquidity issue, you’re right, I overlooked that initially. What happens if I want to liquidate my investment before the end of the target investment period? | Arrived Homes Help Center

Based on this, I wouldn’t invest anything unless I was fine with keeping it there for 5 years minimum. If they get this “planned redemption program” accepted by the SEC then that would make it a better option for many.

I got this emailed response to my question:

The properties with no leverage that aren’t strategic refinance candidates will never had debt added.

However, the series cash reserves could be interest bearing and we are unable to verify if this would take place or not. I have shared your feedback with our team to consider for the future as we are built on accessibility.

Thank you again for reaching out and please do not hesitate to reach out if you have any other questions.

I responded to consider adding accounting visibility to make it easier for users to tell how much profit came from interest, for purification purposes. Hopefully they can follow through with that and update their FAQ.

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