00:00:05: Quite a few of the very good agents that we've got in the crowd today.

00:00:08: We get guys from Plaza Homes, where are you?

00:00:10: Plaza

00:00:10: Homes

00:00:11: make some noise.

00:00:11: there they are!

00:00:12: We have Ayana Yamaguchi who is... Where she's still

00:00:15: here?

00:00:16: Ayana-san?!

00:00:17: No.. She escaped.

00:00:18: Well anyway yes if need introductions to good agent anywhere on country don't be shy to hit us up.

00:00:25: Oh so yes we're taking your questions.

00:00:27: If

00:00:28: any question

00:00:28: were piled throughout the day Anything form this stream

00:00:32: I gotta swap mics This one for the panel.

00:00:40: Raise your hand.

00:00:42: Tracy usually has survey questions, right?

00:00:50: There was somebody who asked a question on the survey about being seventy and wanting to move out of renting, so what opportunities at seventy are there with?

00:01:11: no I'm guessing for loans rather than, oh thank you.

00:01:17: For loans as a retiree?

00:01:21: So that was the question.

00:01:24: Loan person

00:01:27: here

00:01:28: and another

00:01:29: loan person

00:01:29: there.

00:01:30: perhaps I'll take it is general home loan which i think so.

00:01:35: if the questions about a general Japanese or in the Seventy, that could be very challenging.

00:01:43: Typical Japanese banks will give you a mortgage until your eightieth birthday whilst you're employed though.

00:01:49: so it's based on more of salary and regular income.

00:01:52: And even then if you get close to sixty A lot employment contracts say when You must retire by your sixtieth or now sixty-fifth birthday.

00:02:02: So for those people who are getting closer to that they'll say how do we keep paying their mortgage?

00:02:08: Another two to five years time.

00:02:10: So that's challenging.

00:02:11: if so are they already retired or their close retirement?

00:02:22: Yeah, so in your fifties?

00:02:24: the other question was yes I'm one in there.

00:02:25: fiftys can generally still get a home loan If you're in your seventy-if You are retired seventies and retired.

00:02:32: it could be challenging if you like sixty And you have four of five years left on your work contract.

00:02:37: It could be possible depends on the bank and they may ask for extra information about well, what's your investments?

00:02:44: Do you have Taishokakin?

00:02:46: so when you retire The company will give you a bunch of money.

00:02:49: or if you have a retirement Investments and say.

00:02:53: Well this is my assets.

00:02:55: This is how I'm going to keep funding myself after retirement.

00:02:58: They make consider that possibly flat thirty five who are permanent resident holder Japanese citizen Frat Sanjugo which is a government backed Japanese Home loan system.

00:03:09: They could be more flexible, but I don't have many experience.

00:03:14: The oldest I've done is someone like fifty-eight years old in terms of a typical Japanese homeland.

00:03:20: That's from me But I believe Mark.

00:03:24: Yeah mark and Lisa or mark in particular you may know.

00:03:30: Yes so yen loans For loan for loans from yen loans You need to repay by the time your eighties.

00:03:36: So we would lend to a seventy year old?

00:03:42: And if the seventy-year old person works, then obviously would consider their income.

00:03:48: If they didn't have working income we'd look at the rest of their assets.

00:03:52: What about international income?

00:03:53: It was another question I had earlier.

00:03:55: Like you've got income abroad... If there is income from International Income but not Japan based income Is that taken into consideration for a seventy year old?

00:04:08: So I can't speak for Japanese banks, but the opportunity of yen loans is we don't really care where they come.

00:04:15: We look at income from around the world.

00:04:17: Japanese banks generally do not and that's what we see.

00:04:22: All right, so for the non-resident loans really age does not matter.

00:04:34: What matters more is asset itself whether it produces consistent stable cash flow or not.

00:04:39: and location of assets as a real asset based loan has no nothing to do with age.

00:04:44: So they just

00:04:46: don't matter.

00:04:47: but if still When you say the income?

00:04:50: It has to be The typical long term lease income.

00:04:53: four for the lenders that you work with.

00:04:54: right

00:04:57: yeah You can steal financing at two point seven percent

00:05:04: Hands, questions from the room before we move on to another survey question.

00:05:08: Anyone?

00:05:09: You guys are really shy or you've asked everything throughout the day.

00:05:13: Oh yeah one in the back I know this takes here.

00:05:16: sorry

00:05:16: that one.

00:05:26: Sorry it's just a clarify

00:05:27: about The

00:05:28: age in relation

00:05:29: to getting the loans.

00:05:30: i think

00:05:31: part of It the conversation

00:05:32: was giving

00:05:33: A

00:05:33: personal where your gonna live yourself and then Of course they're wondering Where the money is going To come From.

00:05:38: And Then the other portion of That

00:05:40: Was for investments.

00:05:42: And I was just wondering like you know, I probably still have

00:05:45: a few

00:05:45: years But if i'm in my middle fifties or sixties

00:05:48: does it get harder and harder to get

00:05:50: A

00:05:51: loan for a multifamily building?

00:05:54: For example?

00:05:57: Well the answer is no.

00:05:58: It really doesn't matter of the boroughs age what matters more as an asset itself.

00:06:09: Okay Is it possible to get a loan, despite being unemployed or retired but able cover the purchase multiple times over?

00:06:17: Or do most banks only lend people with jobs and can't even pay cash for one unit.

00:06:39: answer the question, are you employed or not?

00:06:41: We're much more focused on what your balance sheet looks like and what kind of sources of income do have.

00:06:45: So frankly so I'm gonna highlight this tomorrow.

00:06:48: we have all sorts of borrowers that come through The Door Of Yen Loans but one significant source of interest is people who are wealthy on paper but don't have a lot of assets in Japan either because they don't Have A Job Or They Choose To Keep Things Offshore And Were Happy to Lend Them.

00:07:06: Not Having A Job In & Of Itself definitely does not disqualify you for a loan from yen loans.

00:07:11: I think that's quite different than the way most Japanese banks would look

00:07:14: at

00:07:14: it.".

00:07:18: So yeah, just wanted to elaborate because those questions are getting two different versions of answers from us.

00:07:24: so Mark is the founder of Yen Loans.

00:07:26: he speaking tomorrow its one our sponsors and they're a money lender for non-residents And Alicia as well works with financing.

00:07:37: When I talk about home loans, it's for residents with either a Japanese spouse or permanent residency visa.

00:07:42: They get the typical sub-one percent interest rates... ...for their personal homes.

00:07:47: so when i speak its really talking those kind of low typical homelones that you see in traditional Japanese home loan whereas Alicia and Mark speaks non resident financing which is why approaches are different.

00:08:02: we have different answers to similar questions

00:08:05: And just to clarify a little bit further, Alicia specializes in multi-family apartment buildings and Herlender I think requires corporate structure.

00:08:17: Corporate structure and their corporate representative director which they can arrange.

00:08:20: and Mark Yanlong's specialized condo units do not require corporate structure but don't lend for other types of properties at the moment.

00:08:28: Condos and single families stand alone

00:08:34: property as well.

00:08:35: And the other difference is that long-term leases versus any purpose in yen loans came.

00:08:42: So holiday home, minpaku, monthly rentals are also acceptable for yen loans but only condos at the moment right?

00:08:48: Further questions from The Room and he had wow this is the shortest Q&A.

00:08:55: oh you got more okay.

00:08:59: Now this is a question that's come up time and time again.

00:09:03: It about how to finance our home in Japan as a sofa, so thats military visa basis.

00:09:12: And in the past we've always said sorry.

00:09:15: however

00:09:18: So we actually, I think from next Friday will be advertising in the Stars and Stripes newspaper.

00:09:27: We waited because we were just doing Tokyo.

00:09:29: so From April first we can lend other metro areas of Japan.

00:09:34: so Greater Tokyo area.

00:09:37: it was Just The Twenty Three Awards Of Tokyo Before but we do the greater Tokyo Area Osaka Fukuoka Nagoya Sapporo.

00:09:46: I guess that's it.

00:09:47: But yeah, so we are going to be marketing loans to people with SOFA status.

00:09:53: So i think there should be.

00:09:53: Yes you're gonna

00:09:54: make a lot of people very happy.

00:09:56: Well but We only can do condos.

00:10:01: That is the limiting factor.

00:10:07: Hi actually im gunna

00:10:09: talk later about that.

00:10:11: for SOFA You said ONLY CONDOS.

00:10:12: Is that FOR NOW FOREVER?

00:10:14: Or

00:10:15: just part your growth strategy?

00:10:19: Since you're asking, I'd say... So what we can lend on is basically defined by our financier.

00:10:27: We are not a broker and we lend money but borrow to lend

00:10:30: money

00:10:31: And the sandbox in which were allowed play very strictly delineated.

00:10:40: The rationale for only doing condos was simply that required due diligence on a property is so much less if it's a condo.

00:10:50: So in the future, do I think we may be able to do loans on houses and buildings?

00:10:58: I think the answer is yes but i frankly think that the loan size-the minimum loan size...is going have to be a lot bigger just because its'so much more work for us to do proper credit under right on house.

00:11:16: I don't know what that minimum will be, but my guess is it'll be around fifty million yen loan which so a much bigger

00:11:22: house.

00:11:23: And you mean

00:11:24: half of it

00:11:26: from cash use?

00:11:28: Yeah So iIll go through all the details tomorrow But we lend up to sixty percent and thats of the appraised value not necessarily your purchase price.

00:11:36: A good way of thinking about it Is a decent outcome.

00:11:40: Appraisals are inherently backward looking especially given whats happened in last year Especially this area.

00:11:45: here Appraisals are coming in lower than market prices.

00:11:49: So if appraisals come in at anything above eighty percent of the purchase price, that's actually a good outcome and I don't control the appraisal.

00:11:59: so... The way i would think about it is If you can borrow fifty per cent from yen loans.

00:12:09: That's like a decent outcome.

00:12:13: We've got one question here.

00:12:16: actually

00:12:20: I'd like to know what people do escrow services

00:12:25: in

00:12:25: Japan when they are purchasing from overseas.

00:12:28: I run the brokerage firm in Tokyo and we have many

00:12:32: purchase requests,

00:12:33: especially from US.

00:12:35: And Americans typically expect escrow service.

00:12:39: but escrow

00:12:41: is not a norm for Japan.

00:12:42: so I just try hard to find out some

00:12:45: escrow firms with no money

00:12:48: around.

00:12:49: recently i found company who offered escrow services

00:12:53: for

00:12:57: for the deal of the sixty-six

00:13:00: point

00:13:00: five million Yokohama House deal.

00:13:03: So I don't know

00:13:05: if what

00:13:06: this

00:13:07: fee is

00:13:08: compared

00:13:08: with other

00:13:09: escrow companies

00:13:10: available in

00:13:11: Japan?

00:13:12: This a really common problem because we sell to so many foreign buyers that Escrow was just expected and when you tell them, um... Just bring all the money give it to seller.

00:13:22: they're like

00:13:23: What?!

00:13:24: We ran into that early earlier and got ahead.

00:13:27: Yes, so we got ahead of this and We actually have a license escrow trust account not through ourselves but Through a company called escrow agent Japan.

00:13:36: They're one of only three license holders in japan that can Actually create an escrow Trust account for purpose of real estate transactions And after months and months of getting set up with them.

00:13:46: We've had full escrow services That we can do.

00:13:50: Not similar prices at all.

00:13:52: It's only twenty two thousand yen per transfer.

00:13:55: So you're gonna have to transfers your earnest money and Your closing final costs, and then if you want to transfer from let's say a swift transaction so an international wire There's an additional I think five thousand in.

00:14:08: but most people find that it's a lot easier To use wise In order to do a kind of real-time exchange rate so that you get A much better rate than your bank is going give You on exchange rate?

00:14:17: So why are two whys, wise does their internal transfer in Japan?

00:14:23: And then why sends that to the escrow account.

00:14:25: In that Escrow management service we provide this.

00:14:28: all of our members who purchase houses with us.

00:14:30: there's a lot identity verification and kind of paperwork on Japanese side because it is like a thirty-two step process.

00:14:39: I'm not kidding actually thirty steps.

00:14:41: Emily The back has been learning full processes very fun.

00:14:45: they want be notified every single possible thing going on about the property, about the house.

00:14:51: When funds move and The authority to move funds is very complicated.

00:14:55: but we have an entire process for that.

00:14:57: so if you're looking to buy a House in Japan We do have full escrow

00:15:00: And

00:15:03: just To answer your question Suzuki-san as well In our case at least A lot of education.

00:15:09: That we do because that Question comes from people who are not that familiar with the Japanese real estate market.

00:15:15: Our job is the people supporting them to educate them on what exactly the market means.

00:15:19: I'll talk a lot about that expectation gap tomorrow in my presentation too, but one of things to explain to people as opposed no offense to states and other countries around the world.

00:15:30: Japanese real estate agents are very strictly monitored and licensed.

00:15:38: The chance for anybody pulling any monkey business or running with your money just so they can get two or three million yen and lose their license forever plus face jail time that it just the market doesn't work like That here.

00:15:51: It's extremely I wouldn't say impossible but extremely, extremely rare unless you're dealing with them very shady sellers And buyers which i'm assuming most of our clients in sellers are not.

00:16:02: Yep

00:16:14: Thank You.

00:16:15: Related With The Interest Rate Is expected to increase In

00:16:18: The Future.

00:16:19: Are These Loans Like A Fixed Rate Or

00:16:21: They Are Tied

00:16:22: With The Monetary Policy

00:16:23: Here?

00:16:23: What types of properties specifically or any?

00:16:26: Because investment loans are very different rates to homeowner loans.

00:16:30: To understand

00:16:30: a little bit about that, yeah

00:16:32: and which ones will be tied or not?

00:16:36: Most of the loans have variables but like Emil mentioned for primary residents you can get a primary residence if your primary resident is here.

00:16:45: You could get plus thirty five which has fixed interest rate.

00:16:49: But most people would choose to have variable interests.

00:16:59: Sorry, can you just repeat the question?

00:17:01: I was sort of focusing on some camera stuff that's going on here.

00:17:09: Oh yes definitely i do think interest rates well they have been increasing.

00:17:13: we did a monthly although we didn't last month away and this month were doing their rates having gone up so year ago will getting zero point Three nine percent zero point four five percent.

00:17:27: right now the cheapest is your point six for Presti's one point two percent, which Still feels a bit high.

00:17:36: I don't think.

00:17:43: Talking in decimals Yeah you guys don't understand decimal or was that metric anyway?

00:17:53: Anyhow Yeah, so I do think they're going up will.

00:17:56: They go out past two percent?

00:17:58: I don't know.

00:17:58: I feel there's too many small businesses more business loans Small other economic factors that are reliant on these really low loans and Really look really low rates to keep their business operating.

00:18:13: this too much.

00:18:14: I believe economic fallout lots of.

00:18:16: they call them zombie companies companies That are just running on the free mortgage at a free financing or very cheap you know, zero point four percent interest rate business loans that just keep them operating.

00:18:27: and so many of these guys will Go under like mom-and-pop shops if the funding is too expensive.

00:18:35: So I think there's a lot of other Things in the Japanese economy that will prevent The government from saying yeah let's just jack it up Let's just do what Australia doing with the US is doing And go to this.

00:18:46: You know for five percent sort of rates?

00:18:48: That's my personal feeling.

00:18:51: but Yeah, yeah.

00:18:54: Also that's you know I buy homes so i'm not an economist.

00:19:09: After a pretty basic question maybe for Emil.

00:19:12: um So for capital gains Is it better to buy a property?

00:19:17: That

00:19:17: you

00:19:18: actually own the land or versus lethal

00:19:25: When we say cap for capital gain tax.

00:19:36: Okay, so basically is it better to invest in leasehold or free hold?

00:19:43: Yeah.

00:19:44: All right which one will go up more I believe In general like if the market is going to go up ten percent for example.

00:19:52: i think both The leasehold rights and the freehold rights Will go up.

00:19:56: Ten percent Is my general sort of feel.

00:19:59: It's not gonna be a point where There's Gonna.

00:20:01: they're Going To separate because The difference between them, the mechanics are already present in market.

00:20:09: So I think it will be similar.

00:20:11: to be honest that's my feeling.

00:20:12: but yeah sorry and this is my opinion.

00:20:18: I just want say no i think its kind of supporting it.

00:20:20: looking at from another angle we deal a lot on condo units as investment properties.

00:20:26: if areas popular even a condo unit which comes with like fraction land have been doubling and tripling in price over the last fifteen years, if they're a very popular area.

00:20:38: So while the land is the only thing that tends to gain value... I would look at it more as the location rather than the land specifically.

00:20:50: A leasehold probably has less potential but if their areas are popular then they'll go up for sure.

00:21:00: You were all shy!

00:21:02: Start with that lady there.

00:21:03: She was

00:21:07: looking back one year and looking forward, One Year for anyone on the panel?

00:21:12: How have the challenges or opportunities changed?

00:21:19: I'll pass it down to line.

00:21:20: we've had them.

00:21:21: We've had a big drop when the new government came in last October.

00:21:27: Everybody was waiting on the sidelines and not knowing what's going to happen or not, now things have started going up again with lots of interest coming back.

00:21:35: but we lost all people who were banking for a five million yen business manager visa with a little Airbnb at the countryside.

00:21:43: they're gone unfortunately because that is no option anymore.

00:21:51: I'd say I think a lot more

00:21:53: people

00:21:54: are interested

00:21:55: in this, at

00:21:57: least like

00:21:58: what we're interested specifically affordable homes.

00:22:03: But also the

00:22:05: cheap yen weekend is

00:22:07: really helping foreigners to

00:22:10: take action because you know there's... We don't know whats gonna

00:22:19: happen?

00:22:22: you know, uncertainty in this world.

00:22:25: So

00:22:28: that might be slowing

00:22:29: some people down

00:22:30: but I would say

00:22:32: there is more activities compared to

00:22:35: especially the

00:22:38: last six months

00:22:39: and at least what we think.

00:22:43: Since they mentioned Chief Business Manager Vija has gone.

00:22:48: The new requirement requires thirty million Japanese yen investment, which is kind of perfectly fit into our apartment building investments.

00:22:56: so we have seen a need to park their thirty million yen into Japan and two apartment buildings because sometimes they just can't deploy all the thirty million.

00:23:05: all of sudden They rather put it in something like producing income for them Which is like thirty million.

00:23:10: you could park your apartment buildings get you good cash flow.

00:23:14: that's why we have seen.

00:23:16: I think one of the big things, especially as someone who started a business in the past year is The new lens on regulation In Japan Of home ownership or anything to do with real estate specifically for foreigners Is really good because the more concrete the laws and regulations become, The more we know framework that were playing in.

00:23:37: And it looks like Japanese government is making changes have made a good direction.

00:23:42: We think its actually strengthening position of foreign investor coming into Japan Because you're not playin areas where don't how things work or what's required.

00:23:50: They are saying exactly whats required now And that means you can work with someone like us, or try to learn it yourself and know.

00:23:57: this is what we have do.

00:23:59: They will let you do versus being.

00:24:01: maybe they'll change?

00:24:02: Maybe the rules are not black-and-white but grey.

00:24:06: We want more Black & White Rules!

00:24:08: There weren't here a year ago.

00:24:11: there's going be more in the future.

00:24:12: so thats good thing.

00:24:16: Thanks.

00:24:16: So

00:24:17: two parts of our business,

00:24:19: accommodation side and brokerage.

00:24:22: I was touching on it a

00:24:22: little bit earlier, but its

00:24:24: been pretty challenging in the

00:24:26: off season.

00:24:27: In winter for the accommodation

00:24:29: side.

00:24:30: But the Sakura season is fantastic

00:24:33: You know best.

00:24:34: two of our best ever months April's Best Ever Month.

00:24:37: So still strong.

00:24:41: Tourism

00:24:42: is still strong

00:24:42: in Japan

00:24:43: And in terms from an

00:24:44: investment perspective and brokerage I think we are

00:24:48: still getting more interest than ever,

00:24:50: so it's very strong and when there

00:24:52: is a

00:24:52: good

00:24:53: well-priced

00:24:53: property

00:24:54: moves pretty quickly.

00:24:56: And the hotel investment side has more interests then ever for

00:24:59: sure.".

00:25:20: It doesn't go up and down as much, it's a lot more like an undead or stable.

00:25:27: So right now you have war going on politics.

00:25:32: in most Western countries people are one side of the other.

00:25:36: no-one goes back and thinks my home country is just fantastic.

00:25:38: I love that there rather than here even two to three year expat contract they're reaching out hey i've heard about you.

00:25:47: we kind want stay idea for going back after being so chill and cruisey for the past three years, we'd go to Nomikai's hanging out here.

00:25:56: No talk about politics.

00:25:57: no talking about religion.

00:26:00: not every conversation is about war going on or petrol prices it doesn't have that they got back from a holiday in

00:26:06: U.S.,

00:26:08: all of this was what their surrounded by.

00:26:10: let us stay here longer.

00:26:12: The more turmoil chaos there are The more the Japan bubble, I don't know if i should use that term or not but this little space we have here.

00:26:22: Look at us look what you are right now and all those things just talked about.

00:26:26: yeah it is another real thing but there's like a space where they're out right now You know?

00:26:32: We haven't... All of these three things mentioned for the first time has gone.

00:26:36: oh yea thats right.

00:26:37: That was number one talking point anywhere else in the world Right Now And were here talking renovations and holiday homes, and catson islands.

00:26:47: What I'm saying is yes it was like this twelve months ago as well And its even more so now because we've got what?

00:26:54: Was a one or two wars?

00:26:55: i don't know.

00:26:55: We're up to right Now in the past Twelve Months.

00:26:58: So that's where I see people are enjoying The safety In the comfort of being in Japan A little bit longer and Are willing To settle down here.

00:27:09: So from a business point of view, I see that we've made real estate so popular for everybody.

00:27:18: Now many people want to do it and they think you know its easy.

00:27:32: you know, new renovation companies and all the stuff that are popping up on a market from like okay real estate agents.

00:27:40: then clients are complaining it's more of hit-and run kind service.

00:27:45: From experience me competing with some renovations company under Undervalue the quotations and then kind of argue for the extra money later, and stuff like that.

00:27:58: So I think the competition as well is changing.

00:28:02: There are more players on market And it's causing a little bit an issue because not all offer high quality service.

00:28:13: They're trying to bring prices down Not necessarily For good reason.

00:28:40: Yeah,

00:28:42: it's changed quite dramatically actually I think.

00:28:45: for the domestic market Obviously this is a pretty international audience and its four years running now that we've been doing this.

00:28:54: so like There's kind of established sustained interest in the let's call it like domestic international as well, is the International International Market.

00:29:03: but kind of the domestic domestic market has been a little bit slow to what may not slow But anyway It's taken some time and both anecdotally.

00:29:12: As well as business-wise I've noticed a pretty dramatic change In interest in motivation in actual This about government as well as owners actually making things happen and not just talking about it.

00:29:30: Kind of a boring anecdote, but to me was like pretty striking.

00:29:35: I remember maybe year ago now sitting on one the trains in Tokyo for first time.

00:29:42: there were two probably

00:29:43: I don't know fifty

00:29:44: five sixty-year old Japanese guys insuits looking very normal talking hushed but excitedly Which I had never, obviously like all of us are very aware the whole Akiya situation and opportunities there.

00:29:58: but it hasn't been really a conversation starter much less as sustained conversations amongst normal people in Japan.

00:30:08: And so just hearing that kind un-solicited natural conversation about honestly kind of subtly taboo sort thing I thought it was really encouraging.

00:30:20: And then after that, there's been a number especially over in like Shizuoka area.

00:30:24: for me anyway has been from the owner as well is like domestic government and municipality side much more proactive and honestly just active.

00:30:35: so actually doing stuff in real estate and lifestyle development definitely in the Akiya rectification let us say or rejuvenation.

00:30:44: i think That Was The Best Word I've Heard.

00:30:46: Thanks Is It For That One?

00:30:48: So yeah, it seems like things are starting to accelerate.

00:30:54: I'll

00:31:10: just speak from my point of view a little bit in that, I see lot people entering the short term rental market.

00:31:15: There's lots more licenses being issued and so will have some downward pressure on pricing as more competition enter.

00:31:28: but i think there is a little opportunity because As all of this sort-of race to the bottom happens with three star and below, it leaves a premium end wide open as Chai can agree.

00:31:47: There is still there's still a lot opportunity up at that premium end but you know And there's a lot of people coming into the market doing it badly, which is fine.

00:32:02: It just means that I'd have to do it differently and people who don't do generic—who have a point-of-view or want look after their premium end will still have great opportunity.

00:32:16: The other thing that I notice as well are prices really gone up renovation process have gone up.

00:32:23: So you know any sort of work that I need done within my houses, it's double but its' gone a lot.

00:32:33: so means i'm thinking about how much investment putting into my properties to take them out at premium level and just having to be creative design wise which is kinda fun though.

00:32:52: Just a few thoughts.

00:32:54: First of all, no value judgment here.

00:32:56: but I think it's worth mentioning that there is part the politics in Japan which are getting less friendly to foreigners and for me as business owner i want be very aware this.

00:33:07: uh...I think they will probably some kind tightening rules regulations around foreign ownership.

00:33:14: ah..i don't think it'll be extreme but it's something which would probably affect all of us in our room.

00:33:21: That is one thought, just in terms my own personal investment portfolio away from yen loans.

00:33:29: obviously prices have gone up a lot.

00:33:30: so given that rates are going up its hard to think there will be huge amount more capital appreciation.

00:33:37: where I see value

00:33:39: i.e.,

00:33:39: when putting marginal dollar is the creation short term rentals and Airbnb.

00:33:45: Basically, I want to be in the business of creating these and selling them rather than keeping them for the long term because Of a crowded nature things.

00:33:51: The last point which you kind of mentioned was i think given how much?

00:33:57: construction costs have gone up.

00:33:59: the relative attraction of Used buildings or used units in good condition is Much more now.

00:34:09: then it wasn't the past Because Used Units that are In Good Condition may actually be of better quality than the things which are being made right now.

00:34:24: Yeah, I just wanted to add one quick point to that.

00:34:28: we have seen as well yeah they use the renovation condo market is massive.

00:34:34: uh any deal that we get or that we do with a client?

00:34:37: We end up being on the mailing list for that renovation company and they bombard me every other day saying properties available.

00:34:46: Do you know anyone that wants to sell?

00:34:47: They cannot get enough and these are all central Tokyo properties between a hundred million to three hundred million yen, but they're just trying to get because they can not turn them over quickly enough.

00:34:59: yet there's no enough.

00:35:00: in Central Tokyo is not enough space for new developments.

00:35:04: it's very hard to acquire land.

00:35:05: so when I do acquire land its now going up be super premium like this low or mid tier development getting put out in central Tokyo anymore, it's you know three hundred million to five hundred million yen or plus for an apartment.

00:35:20: So now anyone in the mid tier is like well we have to go used because a new one is super premium.

00:35:27: so that's also driving up the price of these renovation ones and they just cannot get snapped up quickly enough.

00:35:49: Sorry if this question was asked, I came in a bit later.

00:35:52: So two-parts questions

00:35:54: and then they're both kind of related.

00:35:56: okay so my rental income that i will collect from fellow renters what sort of tax with holdings should i expect?

00:36:05: From japan?

00:36:07: That's part one for the question.

00:36:09: And as fellow investors in real

00:36:11: estate

00:36:12: What's the best incorporation

00:36:15: we should look For

00:36:16: when We set

00:36:16: up A company here.

00:36:18: thank you

00:36:22: Okay.

00:36:22: Yeah, I'll give this as if

00:36:26: so just to clarify you're talking about as a non-resident yeah As an on resident of Japan.

00:36:32: So from a tax perspective it doesn't really make sense To incorporate until you reach portfolio value of I'd say at least half million US dollar because Corporate set up and upkeep in accounting and bookkeeping is gonna be a few thousand bucks a year From the portfolio and annual cash flow.

00:36:54: It doesn't really make sense to pay over ten percent just in corporate upkeep fees.

00:36:58: That's the first thing with holding tax is Depending on.

00:37:04: depending on that type of the investment Is usually around?

00:37:06: Ten point two, but you claim all of that back when you file your taxes The next year.

00:37:11: so it's a very very temporary expense that ends Up getting back to you when you filed your taxes.

00:37:17: So that's not something we usually factor into considerations.

00:37:20: Anybody else wants to

00:37:23: answer?

00:37:24: The incorporation also depends on your citizenship.

00:37:27: For U.S.

00:37:28: investors, probably GK is a better idea than KK.

00:37:33: I mean the cost is not that much compared.

00:37:37: The annual skip-cup is only you pay for the CPA or you can do it on your own so It doesn't cost that much.

00:37:45: a CPA typically caught Japanese local CP.

00:37:47: Doesn't speak any English to be like.

00:37:49: only cause about need.

00:37:51: you go almost at two hundred fifty K on Japan's yeah, which was equivalent to like

00:37:57: fifteen

00:37:59: hundred.

00:37:59: Well,

00:38:03: if you have income yes.

00:38:05: But I mean the basic amendments cost is only seventy Japanese yen which is like five hundred bucks or

00:38:11: something.

00:38:13: So what we recommend to a lot of people that are buying one or two portfolio properties Is put it under your name Don't do IGK don't pay corporate tax on It and then for US citizens specifically The Tax Treaty its gonna offset most Of That.

00:38:26: anyways Whenever you get into the half million dollars and what?

00:38:29: definitely now, do want to incorporate it?

00:38:31: Just pay the corporate tax.

00:38:32: And then depending on one thing that we found out recently is the fifty-one percent ownership of a U?

00:38:38: S foreign entity as A US owner means That all profit On The GK even if It's Already Taxed Is Going To go.

00:38:44: Do Your Personal Income Taxes.

00:38:46: So That Is Definitely Something You Have To Keep in Mind If You Do Want to Incorporate Versus Keeping It As Personal.

00:38:53: Got Talk Alot.

00:38:56: No, it's not here.

00:38:57: You've probably explained quite a bit.

00:39:00: Yes or company that has CPAs in your home country or tax accounts.

00:39:05: and here in Japan

00:39:08: We got time for a question from the chap on

00:39:09: of the last two okay?

00:39:11: Yeah.

00:39:11: So this summer from the jet they said I was told even though the Japanese property is held in corporate

00:39:16: entity we as

00:39:17: non-resident foreigners Will still be taxed heavily upon death.

00:39:21: if there's true.

00:39:26: And then there's a follow-up, which is what about passing properties on to EZ?

00:39:30: Yeah that's an inheritance tax question.

00:39:32: So yeah if you have asset my understanding even if you've never stepped foot in Japan If you have an asset IN JAPAN Then it will get treated like that asset itself.

00:39:41: We'll get treated with the same inheritance tax rules as in Japan.

00:39:46: so yes Oh, yeah.

00:39:54: But it still falls in whether or not that exemption rules yet but that's part of inheritance tax.

00:39:58: It is subject to inheritance tax and the rules and whatever waivers come with it.

00:40:03: I was talking to another gentleman before when he said their inheritance tax guideline and diagram...I can follow most guidelines on diagrams.

00:40:10: The inheritance tax flowchart?

00:40:22: Using proper entity is the one way to kind of carefully plan, legally avoid inheritance tax.

00:40:28: Because you can give a very small percentage off your company each year and at end it gave away everything while you're still alive so that won't be able- That's

00:40:36: right!

00:40:37: You cannot break up property but you could break up companies.

00:40:39: Exactly thats why we have to use corporate entity for our inheritance tax

00:40:43: purposes.

00:40:52: People should try to avoid dying.

00:40:56: And also this is seriously, avoid dying in Japan.

00:41:09: I would like some advice for non-resident loans ways of getting like loan for thirty to forty year old property.

00:41:26: And what is the minimum or maximum long amount?

00:41:32: So,

00:41:32: thank

00:41:32: you For Yen loans.

00:41:33: we have a hard cut off in nineteen ninety so We can't finance anything built before nineteen ninety.

00:41:40: as A general point and I say this not from The Yen Loans perspective but it's personal my own experience i've found that um...a lot Of the difference in cap rates between properties can be explained by ability to leverage.

00:41:56: So what I mean is like if you look at, the way that i looked it was my net return on capital invested.

00:42:04: so for instance there's lots of stuff that yields seven eight nine ten eleven percent built.

00:42:12: its very old And it has to yield that much to find a buyer.

00:42:16: Because so if you, If its all cash your getting let's say You're getting eight percent on the hundred percent That you put in whereas if Your buying something thats newer you might be able To finance fifty sixty seventy percent of It and your Getting what appears to Be lower cap rate but Cash-on-cash return is similar or even higher.

00:42:36: So I guess i feel like Im trying to say Like I invested In alot old stuff in The past and thought Its great because I was Buying Stuff at you know, at much higher rates.

00:42:45: But like if I had bought stuff that i'd gotten better leverage on At the end of day it probably would have been better and also kind of painfully The high yielding stuff which I bought didn't rally.

00:42:57: It didn't go up nearly as much.

00:42:59: As You Know If I just bought one nice thing That actually wanted to live in In this area Just wouldn't be so much better off.

00:43:12: Okay So thank you.

00:43:15: The question I have is

00:43:16: mainly directed at the

00:43:17: Akiya guys, but anybody who has an opinion can jump in.

00:43:21: So what do you believe it's a

00:43:23: long-term solution

00:43:24: for growing Akiyaproblems?

00:43:26: In

00:43:26: Japan does

00:43:26: that simply change policy?

00:43:29: Do you think they're helping foreigners buy so most of them don't get bought

00:43:33: up?

00:43:33: or do

00:43:35: we need to change culture from Akiakimoe and Akiyas

00:43:40: are attractive to

00:43:41: Japanese people like... What do?

00:43:44: It's very multifaceted.

00:43:46: I would say my previous comment two or three, four questions ago...I've been seeing a lot of Japanese especially owners starting to not only just recognize the potential again it depends on property but are kind-of fed up.

00:44:04: i think there is one anecdote we'll be talking about tomorrow which honestly like seriously one of the most powerful experiences I've had in Japanese real estate,

00:44:15: where

00:44:17: nobody's there to help them.

00:44:20: from an official point-of-view or like a standard you're supposed do this and then sell it.

00:44:28: God knows they tried years trying to do right thing and established avenues

00:44:36: for

00:44:38: unloading the property that for whatever reason or however they

00:44:44: own,

00:44:44: That just doesn't work.

00:44:47: And They're starting to recognize and again act.

00:44:50: this is something I've been working with quite a bit in over The last year.

00:44:52: so it's starting To Act on all right.

00:44:55: well that Just Doesn't Work.

00:44:56: We tried It.

00:44:57: we gave it our All-that Doesn't work.

00:44:59: What are the other options?

00:45:00: what Are the alternatives?

00:45:01: to talking to A local real estate agent going into your Local Municipal Ward Office

00:45:06: For

00:45:07: assistance In offloading an asset?

00:45:09: So there's that.

00:45:10: That is what?

00:45:11: The domestic owner point of view or situation I see.

00:45:18: Municipally, I do not think policy-wise it will get maybe worse Or more convoluted.

00:45:28: There are a stacking on existing policies that still janky.

00:45:37: So why are you adding more to it when you could just kind of fine tune this thing that already exists?

00:45:43: I'm certainly keeping my eye on that.

00:45:47: It might improve, but not

00:45:49: we'll see.

00:45:51: There's the international investment for things like what Chai works with as well as Tracy and kind of bigger things.

00:45:58: think That still pretty viable so far is like

00:46:03: home

00:46:04: More affordable housing stuff.

00:46:05: again Yakiahub guys they definitely have.

00:46:09: Yeah, yeah.

00:46:10: But that's another point and really what I focus on is there's a narrative that needs to be developed basically straight up.

00:46:21: the common narrative about not...I've come to calling it just Not Tokyo Is.

00:46:26: don't go There Right?

00:46:28: And its easy believe in That or deal with that as A place you're not supposed To Go too when there are no alternative.

00:46:38: Kind of stories or narratives, you know YouTube channels are whatever saying hey actually that place where I supposed to go Actually has a waterfall.

00:46:46: That's there.

00:46:46: You don't like what it?

00:46:47: There was a lifestyle thing going on right and so being able To develop lifestyle narratives outside of just the property narrative

00:46:54: Like

00:46:54: to me that's probably The most promising Approach to the whole rural rejuvenation.

00:47:01: really do love that phrase And Akia and just the issues that real estate and economies, and populations in Japan are kind of facing is there needs to be not replacing what currently exists but adding.

00:47:16: To it saying well you could do that.

00:47:17: But then also this other thing.

00:47:19: And so I think encouraging people to explore Be that via investment or short term rentals Or renovations or stuff like that Documenting documentation again That can be video, property documentation all these things In my mind, like really the crux of issue with digitization in Japan is that these problems currently exist because despite fact we have those tools to address issues they're not being used all up until this point.

00:47:51: and so encouraging stuff.

00:47:53: I think it's extremely important.

00:47:55: Write your local congressman?

00:47:57: Yeah!

00:47:58: Like that it works.

00:47:59: Sorry for looking at short but out here hotel said three minutes Joking, seven minutes to clear the room.

00:48:07: But anyone who's got gala dinner tickets will see you all down there at six o'clock and most of you I think we're seeing tomorrow.

00:48:14: if you want to come tomorrow but don't have a ticket yet?

00:48:17: I think Ozan opened up their ticket sales for Sunday again.

00:48:20: they were closed in the morning.

00:48:21: They are open again so...