00:00:03: Repkin and Wyatt.

00:00:04: sorry, I don't know your last step

00:00:05: back

00:00:06: wide back.

00:00:06: Thank you Good morning Thanks for being here.

00:00:13: Hey Ziv do you want to just confirm that all of the mics are working?

00:00:18: For online yeah okay good Okay um I've been working on yen loans four three years.

00:00:28: The first year was due diligence.

00:00:30: the second year was getting licensed.

00:00:31: That took almost a year.

00:00:34: We got our it's It's called Kashi-Kingyo Menkyo in fall of two thousand twenty four.

00:00:43: And then we had to go out and raise money, uh...and that took another year.

00:00:47: Sorry.

00:00:48: Uh so it..that take another year to raise both equity and debt because were on the business lending money.

00:00:53: you need borrow money.

00:00:56: We settled our first loan January thirtieth.

00:01:00: since than with done six loans total

00:01:05: two

00:01:06: settling this week.

00:01:08: And we've got a decent pipeline for May and the rest of summer, so it's an exciting time to be presenting here.

00:01:19: I don't want just read the presentation but i will...and this'll available anyone who wants it.

00:01:24: But as mentioned We are licensed.

00:01:26: So you should take some confidence in that

00:01:55: and just ignore me completely.

00:02:11: Okay, in terms of market context I think it's safe to say that everyone here likes Japan so don't really need to sell you on the opportunity but as a kind general point we've definitely seen an uptick interest in Japan real estate specifically our product.

00:02:30: there are few things driving that.

00:02:31: first of all japan is awesome.

00:02:34: also dollar yen being at one sixty means Foreigners look at property and although it has risen in yen terms.

00:02:42: It still looks quite reasonable versus other metropolises.

00:02:46: I should also mention that i'm american regardless of your politics.

00:02:50: the u.s.. Right now is very Polarized, and Japan just i think to many people seems like a Very clean safe And stable place.

00:02:59: so yeah there's A lot Of interest In it.

00:03:04: I should say up front that we can't compete on interest rate with Japanese banks.

00:03:09: So it's a tough kind of thing to market, but look anyone who can access direct financing from the Japanese bank at two percent or one percent should do that.

00:03:19: We're lending at Taibor which is floating rate plus three and half percent.

00:03:23: Taibore now around zero point nine.

00:03:24: so our all-in cost is about four point.

00:03:26: four percent Which you know The reception very binary.

00:03:34: It's either, wow this is great you guys can lend money at a rate which looks pretty reasonable

00:03:38: or

00:03:40: some form of no!

00:03:42: You're in Japan and should be able to borrow it.

00:03:43: two percent.

00:03:45: so anyway we were when...we can't compete with Japanese banks on rate but we definitely can compete in terms of speed flexibility an ease-of use.

00:03:55: So on that point We don't have any requirements for Japanese income verification, or even Japanese income.

00:04:01: You don't need to be a resident and start up your company in Japan.

00:04:13: Do you want this part?

00:04:18: I've kind of gone through it but we're very flexible.

00:04:26: So the top one I think is quite interesting.

00:04:28: We do equity out refinancing, which in Japan Is very rare.

00:04:33: so we'll see.

00:04:35: although our rates are higher than What Japanese banks pay will see people who have old mortgages From Japanese Banks where their property has gone up and they've amortized of the mortgage down?

00:04:49: So you know They may have.

00:04:50: let's say as an example Maybe you bought a property for a hundred million yen ten years ago.

00:04:55: It's now worth two hundred million yen, and the mortgage is even lower.

00:04:58: The mortgages probably down to like thirty million yen now And people want access some of that equity.

00:05:03: a Japanese bank will let you refinance.

00:05:05: So for instance if you had it alone with Mizoho You could get a better rate from RISONA.

00:05:12: but RISONA won't take out cash.

00:05:13: They'll only re-finance the amount in your original mortgage.

00:05:17: We don't care about that.

00:05:18: so on something Like That If we were going to lend fifty percent?

00:05:26: I think i kind of explained the other things here.

00:05:42: Okay, so all sort of present about the product itself.

00:05:47: There's two very important points that I want to address right away.

00:05:51: one we can only find finance condos or apartment units no detached houses No whole buildings at The moment.

00:06:01: and the second thing is when it comes to LTV And how that works.

00:06:05: So it's important to understand, the LTV is based on the appraised value of property and not purchase price.

00:06:17: so there will be a difference between those two.

00:06:22: It really depends upon the property.

00:06:25: just keep in mind Minimum loan amount fifteen million all the way up to five hundred twenty-five million.

00:06:35: As for the loan term, we can do a maximum of thirty-five years but that's also dependent upon the age of property.

00:06:44: So if it is a thirty year old property so what rule this?

00:06:48: as we take fifty minus The age of the property.

00:06:52: If its a thirtyyear old property then max loan terms twenty years.

00:06:56: and than Mark explained earlier interest rate consists two components Portion which is floating and then our spread, which is three-and-a-half percent.

00:07:10: another thing that might be of interest to property investors To increase your cash flow as we could offer Interest only loans For a maximum five years Through the fees here.

00:07:30: okay so.

00:07:31: We have a commitment fee Two hundred and twenty thousand yen, which includes consumption tax.

00:07:37: And then there's also an appraisal fee of a hundred ten thousand yen.

00:07:41: So when I get into the process Which is the next slide?

00:07:49: Oh yeah in our loan origination fee of two point two percent, which is due upon settlement Of the loans.

00:07:58: so it's at settlements.

00:07:59: When we get to settlement you'll be credited the loan loan amount, and then there's three debit items.

00:08:05: One of them is the loan origination fee.

00:08:08: The other is a principal in interest payment reserve which was either three months or six months depending on the type of use of the property.

00:08:17: And then the last debit item would be the stamp duty Which depends on the size of the loan.

00:08:25: To go over the process a little bit We'll start off with an initial assessment.

00:08:33: So we have a client intake form.

00:08:35: It's one page, takes probably ten minutes to fill out.

00:08:39: Consisting... Sorry?

00:08:40: Can I jump in?

00:08:40: Yeah Just briefly To maybe simplify this The way kind of typical client interaction would start is like if someone reached out to us.

00:08:51: We'd be talking today with you.

00:08:52: Otherwise it could be by phone or email But that will usually include you telling us what kind of property it is, and that's making sure we could in fact finance it.

00:09:04: So if he said to buy a TP in Chiba well we don't finance TPs so thats not gonna work.

00:09:12: but from then would say oh this something that can be financed?

00:09:16: And give some color on who are or your income assets and liabilities have From there will ask for the initial assessment form.

00:09:29: So we want to make this as easy as possible for borrowers, and we don't wanna waste your time or our money.

00:09:42: For me personally having dealt with Japanese banks... Yeah the rate is great but you don't get a lot of color along the way.

00:09:51: You can end up spending alot of time and money presenting things only four.

00:09:56: at the end they say, oh no we can't do this.

00:09:59: So really want to avoid that.

00:10:01: so I'm gonna pass us back to Wyatt.

00:10:03: but the point is after kind of initial conversation about whether or not it looks like its something were going be able then would ask you spend ten to fifteen minutes preparing for intake form.

00:10:19: yeah and once we get a client in take form then there's consists two portions.

00:10:25: The top portion is sort of about your finances.

00:10:29: So what we need to know, What's your monthly net income and what are you're monthly liabilities?

00:10:35: From that it called the DSR Debt Serviceability Ratio Calculation To figure out if how much leverage could be eligible for.

00:10:46: so thats a first portion in client intake form.

00:10:49: second portion is about property.

00:10:51: So, ideally you've already identified a specific property that your looking at and we will do an evaluation on the property.

00:11:01: And then advise of what value comes back out.

00:11:06: so how much leverage could get from it.

00:11:11: There's some people who just want to know, oh how much could leverage?

00:11:16: Could I get in general based off my finances?

00:11:19: and then you know How Much Equity Cash You Have Available To Commit Towards The Purchase.

00:11:24: But You Haven't Identified A Property Yet.

00:11:25: That'S Fine.

00:11:27: So Just Go Ahead And You Can Submit It.

00:11:30: Anyways We'll Consult With You.

00:11:32: Then You Can Go Out Look For A Few Months Or Something for a Property.

00:11:37: So once we've completed the initial assessment, We have determined that you are financeable.

00:11:44: The property fits within our mandate criteria.

00:11:50: then we would advise to go ahead and submit a loan application.

00:11:54: so thats when were going send an invoice for your commitment fee And the appraisal.

00:12:01: And then there's two links.

00:12:03: We'll send you.

00:12:03: one of them is the loan application itself and The other link Is your documents upload for all Your KYC docs.

00:12:15: I think a key thing to mention here,

00:12:18: we

00:12:18: are not in the business Of accepting application fees For loans that we don't want To fund.

00:12:24: That would annoy You and it will be A waste our time.

00:12:29: so The two hundred and twenty thousand yen application fee is, you know it's not small.

00:12:36: He called for the commitment fee.

00:12:39: It's partly because we don't want to do work of credit underwriting which by way with lots of expenses or unless your really committed doing but also as I mentioned this when we start doing credit checks And running numbers on our side some that are outsourced.

00:12:54: so there a real cost us.

00:12:55: So just last thing i'll say on this We have yet an application fee for a loan that we chose not to fund.

00:13:12: So, we've had people who applied the property traded away or they bought and I think they may come back.

00:13:19: but the point is really don't wanna be in business of annoying by collecting applications fees for something with refunds.

00:13:27: In fact i would quite inclined to refund an application if it didn't.

00:13:35: if it didn't happen, with the caveat that... The way I look at kind of the move from intake form to application is when we say you should apply You're highly likely to be approved as long as you are who said you were.

00:13:53: So for instance oh i have a Charles Schwab account with eight hundred thousand dollars on in and then when he documented only has forty K'init.

00:14:02: That's not good!

00:14:06: We, with all this said about high likelihood of being approved if we're asking you to submit the application.

00:14:15: That is assuming that you haven't lied in the application process.

00:14:18: and In the mortgage business there are lots examples for people who have tried say they had better finances

00:14:28: than really had it.

00:14:33: Okay so now once you've submitted your loan application Then the KYC process actually starts.

00:14:40: So within ten business days, we will have completed a whole credit underwrite and then provided you with formal loan approval which comes in the form of a loan offer letter where you indicate how much debt that you want to receive at settlement And then move towards settlement.

00:15:01: Just quick note We can only do settlement on the second and fourth Thursdays of every month.

00:15:09: Those are our designated drawdown dates, um... And then also at settlement I mentioned it earlier you will be credited-credited the loan and there's those three debit items.

00:15:24: so about twenty business days well exactly twenty business day prior to settlement is when we'll determine the TAIBOR portion in interest rate.

00:15:36: That's the floating portion.

00:15:38: So we'll say, okay at settlement that is what the Tiver portions going to be.

00:15:41: so now can actually calculate the amortization schedule and will create a debt side settlement statement for you.

00:15:49: You know exactly how much loan your receive at settlement Okay?

00:15:55: And then after settlement it just when start making payments.

00:16:05: We're gonna go through three case studies.

00:16:09: Are we okay on time?

00:16:11: So this first case study, this was actually our first deal.

00:16:15: It's pretty exciting to go through.

00:16:19: so here is sort of the profile of the borrower an individual non-resident living in Hong Kong citizenship with Australian.

00:16:35: basically that purpose for purchase to be owner occupied, so the borrower was being relocated To Tokyo through his company But it wasn't going to be until a few months off.

00:16:51: So in the interim he's gonna run as short-term rental as an MFA monthly furnished apartment.

00:16:58: and then If you can see the property itself, it's a really cool property.

00:17:03: I like the property a lot.

00:17:05: You

00:17:05: visited?

00:17:06: Yes!

00:17:07: Yeah...I visited and actually showed to his client.

00:17:11: His broker was on vacation.

00:17:12: i guess It is great property in Roppongi Probably five minutes from station And then another five minutes towards Tokyo Tower.

00:17:27: So the purchase price was yeah at just under one eighty.

00:17:33: The appraisal came back at one thirty four.

00:17:37: so Yeah, based off the intended type of use he could have gone up to fifty percent LTV He ended up taking out.

00:17:50: Think it wasn't sixty seven or sixty something like that.

00:17:54: Maybe worth mentioning

00:17:55: sure.

00:18:11: So this is something to highlight.

00:18:13: The appraisal came in at only a hundred and thirty-four million yen, which frankly it's kind of frustrating for most buyers.

00:18:23: To be clear the appraisals isn't... This is outsourced into an appraisable company.

00:18:28: I don't want spend too much time on it but appraisales are inherently backward looking And especially in this area Minato coup kind of the central five words.

00:18:39: prices have gone like this over last a couple years and so This, and this was a renovated apartment.

00:18:46: Yeah as well Yes So it was a renovation department which?

00:18:49: The appraisal companies give you very little credit for.

00:18:53: so You know if I were to buy her And i wanted To max leverage out I would be Kind Of frustrated that you Know the first price is one eighty in the brazil amount Was one thirty-five.

00:19:01: this guy didn't care That much because he only wanted to borrow I think kind of sixty to seventy million yen I would say in our experience, so in the essential five words of Tokyo if the appraisal is around eighty percent of the purchase price that's actually a decent outcome.

00:19:20: And it's hard for us to kind of fight for it to be raised at all above that.

00:19:25: Yeah

00:19:32: Also one more thing to mention about The Appraisals Is we tend to see wider margin between the appraised value and Or market price of a property if it's a new development or getting into the Luxury ultra luxury space.

00:19:50: There's more of a margin there typically.

00:19:58: Okay, so yeah property management.

00:20:00: actually this is very important point.

00:20:02: So if you do not have a Japanese bank account That's not a problem.

00:20:07: we can still lend to you but we will require that an approved property manager by us be appointed to handle your monthly P&I payments.

00:20:19: So it would be pretty difficult if you have an offshore bank account and kind of unpractical, impractical to keep sending us money each month.

00:20:30: so we require a property manager be appointed.

00:20:45: So just to finish up on this one, This is our first loan.

00:20:48: The application came in before the holidays so it took fifty-seven days.

00:20:52: Now this guy wasn't that rushed.

00:20:54: We can do it in less than thirty days.

00:20:57: but um...this was there kind of show what a slow process looks like Okay!

00:21:04: This second case we've called low touch yield hungry investor.

00:21:14: This borrower was

00:21:16: from

00:21:16: China.

00:21:18: I don't have to go through all of his income stuff, but... ...I don't think he's ever been to Japan.

00:21:26: So there is obviously a lot Chinese interest in Japanese real estate and you know the historical theme of Chinese wanting to get assets outside of China.

00:21:37: so this guy didn't tell me that.

00:21:38: But i'm pretty sure thats what striving it.

00:21:42: The other thing with striving it The developer that sold it to them Managed as an Airbnb.

00:21:55: So what?

00:21:55: That means is that the developer enters a long-term rental contract with the buyer and Then the developer runs.

00:22:06: It has an Airbnb.

00:22:08: I'm kind of have mixed Of mixed thoughts on this one.

00:22:15: I don't think it would be possible for this guy to be managing his own Airbnb by himself from China, so we definitely require that he has a property manager in place.

00:22:28: The return he's getting is close to seven percent which...I think if you were operating an Airbnb probably would be targeting something higher than that?

00:22:46: Maybe a net yield of eight or nine percent, maybe even higher.

00:22:52: But the way it's structured he just got long-term lease with the developer.

00:22:59: Now well you may not find this interesting but I feel especially when we look at where the appraisal came in versus purchase price.

00:23:11: So it was appraised for fifty one point eight million yen vs the purchase price is seventy five million.

00:23:17: think that this purchase place is somewhat inflated and I Think it's inflated by or the buyer Is allowing it to be inflated because of the high rental income.

00:23:29: what?

00:23:30: That means for us.

00:23:31: There's a fair amount of kind of risk Or risk around.

00:23:36: What happens after the two-year leases up, is this Airbnb?

00:23:41: Operator going to continue to lease his property at that seven percent?

00:23:46: so The all-in yield of six point five seven percent looks somewhat attractive to me, but I think there is a chance that in the future That yield actually goes down.

00:23:58: what i'm getting at.

00:23:59: Is?

00:24:01: I understand the attraction for this investment But it's probably not one that I would do and It leaves us with kind of real risk to the operator.

00:24:13: And so as I'm willing to do some of this business with this operator, but certainly wouldn't want them managing twenty-five apartments.

00:24:26: This one's a bit faster and it was forty two days... How are we on time?

00:24:38: Okay cool!

00:24:41: This is an interesting one A wealthy Japan resident from China But he doesn't have PR.

00:24:56: He has a job in Japan.

00:24:58: I

00:25:00: believe that the job was really just so he can have a visa, but it certainly wasn't high enough to support a purchase price of nine hundred ninety million yen.

00:25:14: This borrower had A bunch of income producing properties In China and Thailand.

00:25:24: we got comfortable with them.

00:25:25: We saw rental contracts on

00:25:26: all

00:25:28: And so we were able to lend him five hundred twenty six million yen.

00:25:32: So that's actually our biggest

00:25:33: blow.

00:25:35: The appraisal came in and this one the appraisals actually came in very close, but actually slightly above the purchase price.

00:25:43: It had been on the market for one point two billion yen.

00:25:45: Sorry sorry about that.

00:25:47: it has been on a market four One Point Two Billion Yen.

00:25:50: But he was able to get a bit of concession To such an effect that the appraiser will actually come in higher than the purchased price.

00:25:59: Oh, you know what I'm forgetting?

00:26:00: Sorry.

00:26:01: I should have mentioned this.

00:26:02: in the scenario before The low-touch yield hungry investor he actually opted to pay the extra zero point five percent To

00:26:11: only

00:26:12: to only pay interest.

00:26:13: so it's a pretty aggressive investment.

00:26:20: So for this last one years fifty nine days of funding i think A lot Of that was Actually on the borrower side.

00:26:24: we could Have done faster but He couldn't get the required equity Into japan For a while.

00:26:31: So I think that's it.

00:26:32: I hope we haven't gone too fast or bored you but at this point, We'd like to Open up two questions.

00:26:40: Let me I can help bring a mic over.

00:26:44: Thank You very much.

00:26:49: Hey um,

00:26:50: I'm Joe mo from Hokkaido.

00:26:51: Happy Homes.

00:26:52: Quick question the five-two Questions.

00:26:54: The first one is quicker answer and second one might

00:26:57: take more time.

00:26:58: But the First One Is

00:27:00: are you able To do Basically A line of Credit so?

00:27:04: a potential buyer can just have

00:27:06: that in their back pocket when they're ready to find the house,

00:27:08: and then you can approve

00:27:09: of the house.

00:27:10: And question number two is why do they only

00:27:13: allow you to loan

00:27:14: on mention?

00:27:21: Yes so we don't do a line-of credit but one would give preapproval which many sellers especially dealing with foreigners want can buy it, so we do that all the time.

00:27:39: In terms of... It's not a line-of credit but as I mentioned before We DO do equity release.

00:27:45: So people who for instance want to Do renovation or by another property if you have an unencumbered Property so a property without a mortgage Which fits our criteria?

00:28:00: We'd be happy to let You do an equity release and That'll Be much cheaper than a HELOC Or something you get in The US.

00:28:05: On the second point, so we're a lending business.

00:28:10: We borrow money to lend money and the way that financiers behind us protect themselves is by being very clear about.

00:28:20: I call it The Sandbox.

00:28:21: This Is The Sand Box That Were Allowed To Play In And The SandBoxes Is Only Condominiums And i'm Very Aware There Would Be Lots Of Opportunities To Lend On Houses & Buildings But...And We Want To Do That.

00:28:37: I think we will be able to do that at some point in the future, but it's just worth mentioning.

00:28:40: The required due diligence on a standalone structure is totally different than a condo especially when its developed by well-known builder.

00:28:52: you don't have worry about any of construction.

00:28:56: so wanted get off ground as quickly possible and agreeing this somewhat limited sandbox got us there And fortunately, we have been able to expand.

00:29:10: So we started with just Tokyo.

00:29:11: in fact We start.

00:29:12: it was only the twenty three words of Tokyo and then from April one week expanded two all Of Tokyo parts of Kanagawa Osaka Fukuoka Nagoya so and Sapporo Um...so yeah where were grown?

00:29:30: I think there's a question here.

00:29:33: Hang on, sorry.

00:29:34: I'll get the mic to you but just one from this stream beforehand.

00:29:37: Okay What about the financing of buying whole buildings?

00:29:45: Of condo and keeping one for only okay?

00:29:47: So i think that was just answered.

00:29:49: all buildings are still Still not there But when you

00:29:52: let me Just make one.

00:29:54: so our financier has Let's us approach them with it's called a guy in japanese.

00:30:02: We're allowed to approach them for exceptional approval, but they've said only for loans that are bigger than a billion yen.

00:30:09: So yeah if you want to buy two-billion yen building we should talk.

00:30:12: But um yep

00:30:15: Okay by the way I'm just curious.

00:30:16: this seven percent That you mentioned for the short term state property was that cash on cash or seven percent?

00:30:21: It's

00:30:21: six point five seven percent and that was that was

00:30:25: cash on Cash?

00:30:25: okay because i thought it Was a bit too high for Tokyo if he wasn't.

00:30:30: I also do, but my point was...I view that as kind of inflated.

00:30:41: So the guy answers a two-year lease with The Operator.

00:30:47: Two years from now is that lease going to get renewed at the same level?

00:30:51: I don't know.

00:30:52: and thats how they effectively can mark up their property.

00:30:55: It's not kinda business i really like But I understand why all parties are doing it.

00:30:59: It's kind of a fake-heel calculation.

00:31:01: is what you're saying.

00:31:02: Yes, yes.

00:31:04: But if you deposit in US

00:31:06: bank they give you more than seven percent

00:31:09: without

00:31:10: any investment

00:31:14: for fixed term deposits?

00:31:15: Fixed terms in the U.S now are like four but... Sir go ahead For second case study.

00:31:27: did you include

00:31:30: potential income

00:31:32: In your

00:31:33: calculations, you gave an income for the borrower.

00:31:35: But did you include the potential income from the property?

00:31:39: And

00:31:39: if you did

00:31:40: how is that included?

00:31:41: like a percentage or something... So in the decision to lend we look at all sources of debt and all sorts of sources of income and in The second case obviously he's getting that rental income That's included in the DSR.

00:31:59: in the third one the billion yen apartment the guy is going to live there.

00:32:02: So it would rent for a nice rent, but we can't count

00:32:07: that.".

00:32:38: They required that we go out and raise more equity.

00:32:44: And, we did that from a large fund in Hong Kong.

00:32:49: And are you required like say for US citizen or any citizen?

00:32:53: Are you required to look at their worldwide portfolio holdings?

00:33:01: It's not real... it's not required.

00:33:03: but what do I guess?

00:33:05: the whole The whole opportunity for us, I think it's just stepping back from what.

00:33:12: why did this is like?

00:33:14: by the way This is not an original idea.

00:33:16: But i realized there are lots of people in Japan that can't access Japanese banks.

00:33:21: That are great credits.

00:33:22: so and we're seeing more and more of them People who come here Who might have wealth that they don't Have a job in japan but They have some kind Of job overseas right.

00:33:31: japanese bank won't look at that or they Don't have assets in japon, but they have An apartment building in new york.

00:33:37: And so, we're comfortable.

00:33:42: We are very comfortable with people not having anything in Japan but the flip side is that they were super focused on what assets and income and liabilities have overseas.

00:33:54: What's the rate?

00:33:56: Is it fixed for a certain period of time or does it float every single month?

00:34:00: It floats every single months.

00:34:02: to make this quite specific calculate a fixed payment for one year, assuming the floating interest rate twenty days before this start of the loan.

00:34:17: Okay?

00:34:17: So we do that to make it easy.

00:34:19: so you have to pay three hundred sixty thousand yen each month At the end of the year.

00:34:25: We look back and see what has actually happened in Taibor And according to what's happening at Taibora and attribute more of it to repayment if Tiber has gone down, at less interest.

00:34:43: And we will attribute less of that to repayment in order for Tiber to go up.

00:34:48: So you do an adjustment on the principal balance?

00:34:51: Yes exactly.

00:34:54: I have a question If people not paying money

00:34:57: for

00:34:58: mortgage Do you do foreclosures or the foreclosures market existing in Tokyo or Japan, generally?

00:35:06: so you can go on auction and buy distressed houses.

00:35:09: That's what it is in

00:35:11: U.S.,

00:35:11: you know?

00:35:13: So I hope we never have to answer that question!

00:35:18: I hope for YOU and FOR ME.

00:35:21: but... You're asking good questions.

00:35:25: If you would ask me why haven't Japanese banks done this?

00:35:30: one of the reasons and it's specifically that foreclosing on people who are non-residents can be hard.

00:35:39: And actually they could be non-resident Japanese even, so its not about race or passport It is if the borrower isn't in Japan.

00:35:48: when you go to bankruptcy court let say defaulted me.

00:35:51: The first thing the bankruptcy court will says did you deliver proper notice of arrears and default?

00:36:02: If a guy was in japan There's a very, there is specific form of registered mail where I send it to you.

00:36:08: It effectively like serving someone Where...it doesn't matter if don't answer me Because i sent it and in bankruptcy court its called Naio Shomei.

00:36:15: A bankruptcy court will say Oh!

00:36:17: Ill say the bankruptcy court Yeah we did this Naio shomei And they'll say okay You can sell it In the..its called K-Buy The auction process If the borrower off shore You dont have that path.

00:36:32: Now We're all To me, this is kind of moot because we're only lending fifty percent.

00:36:38: I think that the situation where you might ignore me Is if i lent you a hundred percent right?

00:36:45: Because then your like.

00:36:45: it's kinda an option to pay more back.

00:36:47: But but now thing about its'like.

00:36:50: You bought an apartment for two hundred million yen and put in one hundred million.

00:36:52: yet.

00:36:52: First of all im pretty sure gonna make payments If u have any issues.

00:36:57: Your going answer my phone call.

00:36:59: So this...I see why Japanese banks are quite focused on this point, but I just like when i look at so my partner's business set up the same business in Australia.

00:37:10: they've done more than ten thousand loans of Ten Thousand Loans.

00:37:14: They've had less then twenty defaults and those defaults were usually around death.

00:37:19: I think we're gonna have...I Think We're Gonna Have No Defaults Two More

00:37:25: Questions And Then We Have To Finish.

00:37:27: Sorry

00:37:29: Earlier You Mentioned That you Were Boring Yourself's Money From Banks.

00:37:34: Are you also looking, for example on repackaging the debt and selling that to investors?

00:37:42: Yeah.

00:37:43: That's a good question.

00:37:44: so In me in the overseas model of this business.

00:37:52: That would be the exit for us.

00:37:53: So with their Japanese finance here we probably don't need to do that.

00:37:57: And then the terms from The Japanese Bank or like.

00:38:00: well they're very strict at what We can Do but the financial Terms are decent.

00:38:06: We're not racing to do a securitization.

00:38:08: If we had financed with the kind of typical, it's called a warehouse.

00:38:12: so if we'd financed for the typical financial warehouse... ...we would be under major pressure to securitate because they are only providing leverage for one or two years and were making thirty five year loans.

00:38:28: So uh..We may did that in future but I feel actually like Despite the rigidity, I do like our current financing because we're not under major pressure to ramp up the business very fast and sell a risk.

00:38:46: Can you clarify equity lending?

00:38:50: Does that have the same mansion requirements on the product at your...

00:38:55: Yeah so right now we can only do Kuba Montreal so

00:39:00: condominiums Okay And um Do you have time frame?

00:39:03: potentially that would lend onto other products or not?

00:39:06: I don't want to over promise.

00:39:08: I think it's something like somewhere between let's say nine months and twenty four months out.

00:39:14: but i also wanna be frank that given the due diligence requirements, our minimum loan amounts have go up just because of work required on each loan will go a lot rather than as compared

00:39:28: with condo.

00:39:30: Just to clarify, the collateral of asset needs a condo but loan can be for any purpose.

00:39:35: Correct

00:39:35: yes.

00:39:36: so if you had a condominium that didn't have a loan on it and wanted to take some equity out or buy house or TP or go in cruise or buy gold whatever... You could do this!

00:39:47: Alright thanks we will pull Q&A now But there is large session at end today same as yesterday.

00:39:54: So drop down your questions.

00:39:55: We'll get them to Mark & Wyatt later on.

00:39:57: Thank-you very much.