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The Carletonian

Two students launch real estate company in Iraq

< securing a contract with the United States Department of Defense in March of this year, Carleton students and self-taught entrepreneurs, Derrick Turner ’09 and Ishraf Ahmad ’09, have seen their real estate company, Foreign Real Estate Consultants (FRC), grow into a profitable and expanding enterprise.

A jointly owned American and Iraqi company, FRC offers clients real estate and related brokerage services in Iraq. In short, they identify the properties that match a buyer’s needs. To do so, FRC takes the nation-wide real estate market and centralizes everything to provide clients with a list of available properties. This is a service that was previously unavailable, the pair said in an interview with The Carletonian.

Turner and Ahmad had been in talks about starting a company together ever since they collaborated on a small web start-up several years ago. In 2007, they came across a New York Times article describing the growing real estate market in Iraq. “This got us thinking,” said Turner. “There must be some money to be made in this market.”

The project really took off after they found an Iraqi partner to serve as their eyes and ears in Iraq while Turner and Ahmad manage things stateside. Though both are political science majors and have taken courses on Iraq, they have yet to travel there. “Having an Iraqi partner help us understand Iraqi culture and business practices has been really beneficial,” Ahmad said.

Initially, the group thought their clients would mostly be those interested in investing in properties in order to turn a profit. However, through further research, they have found a large portion of their clientele is people who were displaced from their homes during the war. Ahmad said, “With refugees looking to return to Iraq, there is a huge demand for property. Obviously, the U.S. government is also a major demander.”

The big break for FRC came in March when they secured a contract with the U.S. Department of Defense. FRC was selected after a rigorous two-month application process that included interviews, a host of paperwork, and a 150-page long application. “Landing that contract was pretty surreal,” said Ahmad. “It not only secured us financially, but having the U.S. government as a major client lends great legitimacy to the company as well.”

Turner added, “This provided the financial source outside of venture capital to expand our company. Also, the government is someone all the other clients, both from inside and outside the U.S., will recognize.”

Currently, FRC also works with other private investment firms like KCP Capital, and Winter and Manhattan.

In taking advantage of the free software available to the public, Ahmad and Turner were also able to keep their start-up costs to a minimum. “We’re a bunch of 22-year old students,” said Turner, “we definitely had to find cheap ways to run a business. This includes using skype, google-earth, and other basic free software. We even hired several of our employees through facebook.”

To date, FRC has 6 full time employees. All are predominantly like the company’s founders, young guys who are proficient with today’s technology. “These are the guys who know how to work a GPS system or a digital camera. It also helps that they are usually comfortable with English,” said Ahmad.

However, with operations expanding, they are considering hiring more staff, most likely for translation and administrative related positions. While this does entail rising costs, with the government contract, overall profitability for FRC has swung upwards. Also, thus far, it appears the global economic downturn has not adversely affected their business. “Luckily, we’ve been super insulated from the recession because Iraq is growing for reasons unrelated to the global economy,” Ahmad said. “The Iraqi real estate market is the exact opposite of what we’ve seen in the U.S.”

When asked if it was difficult to balance running a business with schoolwork, both agreed, “it is tough, but definitely manageable.”

“There really is no other way to learn how to run a business,” said Turner.

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