00:00:06: He read my bio, didn't he?

00:00:07: Well done.

00:00:09: Welcome, everyone.

00:00:10: This is what?

00:00:11: How many times we've done this like seventh time.

00:00:14: so really grateful.

00:00:16: if this was your first time welcome.

00:00:18: If it's just Seventh Let me buy you a beer.

00:00:20: So I'm Really happy that You know Your spending some Time with Me.

00:00:25: i realized Time Is our only Commodity.

00:00:27: So Im really Grateful That You're Here and I'm Hoping to Provide Some Value for You.

00:00:33: There's A Lot Of Hype Right Now And I'm Not Wanting To Sell You A Dream.

00:00:36: Actually This Talkis Gonna Be couple of like horror stories and I think that's been a bit of theme these last couple days.

00:00:45: And, the due diligence making sure you know what your doing before.

00:00:54: Oh yes, so it's just really important that you don't believe the hype.

00:01:03: The influencers are great.

00:01:04: they're good at selling your eyeballs on YouTube but let us have some real talk here.

00:01:12: So who am I and why should listen to me?

00:01:16: So i've been in Japan for twenty six years came as a software engineer which has nothing to do with real estate.

00:01:25: I'm the vice president of my family business N-Four, we make language learning software applications dictionaries phrase books but in a former life i actually used to be chemist and blow myself up alot.

00:01:41: so um...I was just not destined for laboratory so retrained.

00:01:45: IT came Japan twenty six years ago.

00:01:48: So lived couple different lives.

00:01:51: I've been a chemist, biochemist but also used to run a bar in Goldengine with my husband here.

00:02:00: And i have been an author and you know lived couple of lives there that are old.

00:02:05: so... Tokyo Family Stays started as a kind of side hustle.

00:02:11: My life really has been in a series of side quests.

00:02:15: It started in two thousand eleven when my son who's now fifteen was a baby.

00:02:20: We had too many people coming to stay wanting to come say with us and in our small Tokyo apartment not possible.

00:02:27: So I took the leap and went okay Well, let me rent a second apartment just down the road And then we use it for family and friends.

00:02:35: when it's not being used, we'll put out for rental.

00:02:38: My goal was to break

00:02:40: even."

00:02:42: That was thirty houses ago!

00:02:43: So... It took off like a rocket.

00:02:46: I really discovered that i enjoyed the hospitality side and loved showing people my town and behind-the-curtain of what its actually liked as a migrant which is called myself a Migrant in Japan is interesting for people, and people want to pay that.

00:03:05: So I've leant into it but around between two thousand sixteen-two thousand eighteen where life really changed.

00:03:16: short term rentals in Japan.

00:03:17: It was the Wild Wild West.

00:03:18: before then we thought well Okay, let's get serious.

00:03:23: So that meant getting licensing, getting the CUNDI license, getting properties we wanted to be licensed letting go of ones who were not going work.

00:03:33: and with the Olympics looming it was like okay five year plan lets do it!

00:03:41: Lets lean in and lets get serious and professional about it.

00:03:45: And then business grew.

00:03:46: Seven figure business.

00:03:47: and actually Sarah Furrier is sitting here.

00:03:50: I remember talking to you when we hit our first a hundred thousand dollar month and that was just like wow.

00:04:00: We built this from nothing, I remember celebrating with Sarah who's sitting right here hosted countless guests in the last fourteen years.

00:04:10: but other thing i've been very serious about is building strong community ties.

00:04:18: I think the difference to create a business that is profitable and sustainable, one that i'm actually really proud of.

00:04:27: But let me get into some other things that ive learnt.

00:04:31: hopefully this will be value for you if your looking at creating a business yourself.

00:04:37: but real talk lot of influences are out there saying oh its easy it's just like that.

00:04:44: The reality is somewhat different.

00:04:47: People see Japan as safe, reliable.

00:04:51: As a rule of law absolutely makes it easy to do business here in terms of understanding.

00:04:57: predictability doesn't make it simple.

00:05:02: It makes it predictable but you have to lean into the regulations and also compliance which is very strict.

00:05:11: The other thing is Minpaku is not passive.

00:05:15: It's not a business that you can just think, oh I'll put it up on Airbnb and make a bit of extra money.

00:05:21: I hear that a lot but i'm just wanting to adjust the mindset moving forward.

00:05:29: Its an active compliance business And its community business and is not passive.

00:05:36: So MIMPACU rewards structure.

00:05:39: so if your approach things in structural way You will be rewarded.

00:05:45: If you assume that things will work as they do elsewhere, leave those assumptions at the water's edge.

00:05:52: It is a different animal here and your capital would be punished if you assumed it.

00:06:02: Roll back a little bit.

00:06:03: What I'm going to talk about here is mimpaku, but i'm using that term to encompass anything That's a furnished rental so not sure like long-term rental which is unfurnished?

00:06:18: Anything that's furnished, I'm talking monthly corporate rentals service departments hotels.

00:06:24: I'm using the Minpaku term to encompass all of those things.

00:06:28: they're slightly different paths and there are different regulations but i am here really just a talk about The approach rather than the nitty-gritty Of each individual deal because as you'll hear it is all local And its all case by case.

00:06:45: So...the short answer that the zoning, and there's zoning in it.

00:06:51: The address will really constrain your pathway where you're going to go with a business plan.

00:06:57: so but they've been principles like I said the mindset.

00:07:00: we'll encompass all of these different options.

00:07:04: then you just have to lean into each individual property an adress.

00:07:09: So mimpaku monthly rentals under your kanzan hotels.

00:07:13: i'm not here long-term chintai, there's other people who can talk about that.

00:07:20: So you don't choose the strategy first.

00:07:23: it is the asset and location which chooses this for you.

00:07:28: so its more than a property investment here.

00:07:30: what your leaning into heres this nice little Venn diagram here Which is combination of regulatory compliance community This may surprise but I'll get in to later.

00:07:43: But the Regulatory the laws that are in place in Japan, how you navigate them.

00:07:50: Compliance building codes safety codes and How to work with OTAs?

00:07:57: And community is a community business.

00:07:59: often it's your neighbors That will dictate Your operational longevity.

00:08:05: So how sustainable your business Will be after You've been managed To get the license.

00:08:10: so having all of this In Place We'll give you A solid foundation.

00:08:16: So I'll just talk about the illusion a little bit.

00:08:19: No, I won't do magic promise.

00:08:22: so The illusion is like oh it's legal everything fine But people forget often It's a hundred and eighty days?

00:08:29: So your pro forma will have to you know.

00:08:31: We'll have to take into that into consideration.

00:08:34: when you're looking at your When you look in your business plan And also each ward each address zone by zone its very different people think, oh I'll just get the house and put it on Airbnb later.

00:08:50: You probably can but doing this due diligence first will make sure ensure that you don't hit the road box.

00:08:59: later there's fire-compliant and also the zoning And then people say everyone is really easy.

00:09:10: however we are.

00:09:13: I don't know if people have seen news lately.

00:09:14: There's been a few horror stories of hosts doing it badly, and giving people like me a bad name which i kind of get annoyed about.

00:09:24: but there is a lot pushback.

00:09:27: so its up to the good hosts really break down some of these myths and start helping educate community on how do well what benefit Japan or also their communities potentially possible if they're supporting you and your business be a profitable business.

00:09:50: The other thing is not all real estate is hospitality suitable, so... And this is bit of mindset shift.

00:09:58: So when you buy something for Mimpaku it's more than the bricks-and-mortar.

00:10:04: It's buying a regulatory pathway.

00:10:07: If that pathway is blocked The business is useless, or you've got dead capital.

00:10:11: Or you have to pivot... ...or change strategy.

00:10:15: I always say that real estate is kind of my place-of-business and not my actual business.

00:10:20: So here at a real estate conference but i'm bit an interloper because hospitality I see as my business.

00:10:27: so again hard truth You're not buying your building..you are buying the pathway.

00:10:33: when you approach to Mimpaku strategy These people need listen too.

00:10:43: These are your stakeholders and these people who will be your allies.

00:10:47: Listen to them!

00:10:49: So let's look at how the deals actually fall apart.

00:10:53: I've seen different deals fall apart, in different ways And i have had come part way through and solve some problems that People jumped into quickly.

00:11:07: But here is key players.

00:11:09: If you listen to all of these people, then and also have the communication between all of this players that's key for having a successful viable project.

00:11:21: So The Ward Office they are ones who set their rules.

00:11:23: That is your first port-of-call.

00:11:25: It's hyperlocal.

00:11:28: People will say well where is the easiest place to run a MIMPACL?

00:11:33: Well even street to street it different And asking you know, anybody to say oh what's the best thing?

00:11:41: or people ask me?

00:11:43: What is the place?

00:11:44: I can't tell.

00:11:45: The first call that i always make and one of my team makes it directly into the ward office.

00:11:50: so they are gatekeepers.

00:11:55: My Shihoshoshi is a favorite person in the world but life is way too short for Japanese paperwork and bureaucracy.

00:12:01: So its the best money ever spent!

00:12:06: And I do exactly what she says.

00:12:07: There is no wiggle room, I don't try and charm my way through.

00:12:11: it's like i find out the rules are... ...and just do it!

00:12:14: The fire consultants?

00:12:16: These slightly different from Shihoshoshi.

00:12:21: So they're the people who liaise directly with the Fire Department.

00:12:27: Sometimes the Fire department & their ward office have slightly different building code rules.

00:12:32: Now you cannot move forward on anything until you have the fire department online.

00:12:38: And so all of these things are, they happen kind a bit at the same time.

00:12:47: I've had to deal where i've passed through the ward office and oh sorry pass with the Fire Department.

00:12:53: then the Ward Office has slightly different regulation.

00:12:56: So I'd go back.

00:12:58: my electrician have different fire alarms put in.

00:13:03: And that actually just happened fairly recently, so that held up the project and then the architects end all of the renovation people.

00:13:14: You have to tell them what these other players are saying So they can do their work from start perfectly.

00:13:23: you don't need go back or retrofitting Can't negotiate or you can't.

00:13:27: there's no wiggle room on any of these steps.

00:13:29: There is No.

00:13:31: You know, that's not shortcuts unfortunately.

00:13:34: so this is a fail.

00:13:36: Give me bad news today.

00:13:37: I'll get to money later, or the profits later.

00:13:42: Speed over sequence again.

00:13:44: what i see people do is they try and jump some of these processes.

00:13:50: If you tried a skip speaking to the she-heel sure shee You think your going.

00:13:53: save yourself a couple bucks by not speaking that person.

00:13:58: It will cost time And when looking at getting to market Is Money.

00:14:06: And so if you haven't spoken to this shihor shahshi, or have not spoke into the fire department.

00:14:11: You will hit hidden compliance blocks.

00:14:15: Normally people buy property and consult experts then attempt a fixed issue.

00:14:21: that's again something what we do abroad Not really need here.

00:14:28: Don´t fall in love with your property before you've spoken to.

00:14:32: everybody have to worry so much about missing out on something, because there is so much availability out there.

00:14:41: So take the time to consult all these experts along the way before you buy.

00:14:47: Now Seth up here and he sees someone who goes out.

00:14:51: does that due diligence for Akihub And do that work.

00:14:56: Absolutely Do That Work.

00:14:58: You can't reverse engineer it.

00:15:00: The compliant side where most people fall over.

00:15:06: This is when most investors either, I don't wanna say disaster because a disaster sort of seems like it's gonna be you're putting your money all up in flames.

00:15:19: what will happen?

00:15:20: Is it'll slow everything down or we might cost you a bit more money?

00:15:27: manage the expectations.

00:15:28: think oh figure that later.

00:15:31: but then reality is The Ward Office Will Block It when a ward office, city offers Hockenjal.

00:15:37: And then you're stuck with some dead capital or you have to invest more than what you thought and so your ROI will be decreased.

00:15:45: So listening the Ward Office from get-go is... I feel like I'm harping on this a lot but i keep seeing it.

00:15:55: people think oh well just get over it'll do it time in time again.

00:16:00: This where people fallover.

00:16:04: Firetrap.

00:16:08: This is also where I've seen a lot of deals come to die.

00:16:11: this Is the silent killer.

00:16:13: you got a beautiful old match here.

00:16:14: then The fire department says that you need to have a secondary escape route or You have to change the floor plan.

00:16:21: that gets expensive really, really expensive And I've seen a deal where missing escape routes has turned something that was potentially super profitable into something it's really non-starter.

00:16:34: In terms of mimpaku, right?

00:16:36: You'd have to convert pivot to either monthly rental or like long term rentals Or...I'm seeing the road on outside is too narrow.

00:16:49: So its not just property itself It's the access for emergency vehicles.

00:16:55: Rule of thumb, four metres...for a hotel two point five metres or for Mimpaku you just have to again.

00:17:03: it is all case by cases operational bleed.

00:17:11: so this something else that I see little bit.

00:17:15: some people think oh i've got my license woohoo pop champagne.

00:17:18: we are off to races.

00:17:20: but I see people ignore asset.

00:17:25: and then The reality is that staffing issues, platform disputes and guest damage.

00:17:35: The license isn't just the ticket to enter the arena it's if you're looking to maximise your investment.

00:17:43: You really want make sure on a daily basis.

00:17:48: This not for the faint-hearted.

00:17:51: It takes good manager.

00:17:53: It takes a good manager with a lot of sweat equity and to keep that profit coming through at maximum level.

00:18:01: So, the squeeze is worth the juice but you've got to squeeze it.

00:18:07: And then here comes some realities.

00:18:10: Things are changing...it's not what was in, y'know, twenty eighteen.

00:18:15: things change all the time.

00:18:17: Zoning gets redrawn every year and its released in April.

00:18:22: Compliance is tightening.

00:18:23: If you see the Toku Mimpaku rules in Osaka, they're looking at reducing those from a Toku mimpaku to regular mimpakku.

00:18:32: Toshimaku is really tightening up.

00:18:35: Shibuyuku has been upped.

00:18:37: there's I can't think of the English, but at the ward office level when things get put up to a vote there's been bills brought towards Shibuya Ku for example.

00:18:57: To reduce compliance on the Shibuya Ku area.

00:19:03: it gets knocked down in the vote every time and its on the radar.

00:19:07: so things do change on an irregular basis And then when the rules change, you just have to follow it.

00:19:14: So... The other thing is that local authorities are actively shutting down illegal operators.

00:19:22: If you think there can be a grey operator or if your got weekend license and trying to rent during week You're gonna get caught.

00:19:32: At this moment its all very analogue.

00:19:35: However its coming That booking platforms will communicate with with the ward office and if you are not reporting, it's self-reporting right now.

00:19:45: And If You Are Not Reporting Accurately Finally The Government Is Catching Up... ...and you will have to start answering some awkward questions.

00:19:56: They sent a couple of Brits To Jail A Few Years ago I remember Right After The revamp.

00:20:01: the law, right?

00:20:02: Yeah.

00:20:02: And also if a property manager for Kanbi has been shown to try and assist people breaking the law that the fines are ridiculous.

00:20:11: so it's not worth...it is not worth it.

00:20:15: know what the rules are.

00:20:17: play by the rules.

00:20:21: yes you'll have sustainable business there.

00:20:27: no Japan rule only everything local.

00:20:30: So that makes it hard, what works in Shibuya might be illegal.

00:20:37: It really does depend on a case-by-case basis.

00:20:40: so its hyper local.

00:20:42: and thats why you have the shihoshoshi.

00:20:44: because if your busy running your business can't look at the compliance I have someone who is looking for compliance all of time just to make sure i'm within the laws.

00:20:55: I am doing the right thing.

00:21:01: There's no universal rule, there is no Japan all-rule.

00:21:05: it's tightening and illegal operators are actively being shut down And so they should.

00:21:09: Right?

00:21:10: You know looking after people where they sleep Is a big responsibility.

00:21:13: It has to be a big privilege.

00:21:15: Its duty of care involved.

00:21:16: So again i take that really seriously in my business because you know All my guests their paying.

00:21:22: They're putting food on my table.

00:21:23: so y'know I care about them.

00:21:25: Um an illegal operator you know, really annoy me.

00:21:31: Each ward does have the ability to interpret the laws as they see fit depending on what their constituents are saying and it is a social contract between...between community The Chornay And yourself.

00:21:45: It's not just piece of paper.

00:21:47: So believe or not your first stakeholders They're actually your guests.

00:21:53: so there Your local community leaders.

00:21:59: When I first started in Yoyogi, we went round to... We ran around and had a cup of tea with the guy who runs the Chournai.

00:22:07: He's like a million years old.

00:22:09: he has three teeth in his mouth but we went there with cookies and a bow.

00:22:14: it just smooths out.

00:22:16: It smoothes away.

00:22:19: Having that relationship with your community leader means they talk.

00:22:25: He then knows every other small business in the area and whenever there's any pushback, he'll go.

00:22:32: they're good people.

00:22:33: They are fine.

00:22:34: so having those allies within your community will make that effort.

00:22:39: front loading even before you open set up for success.

00:22:45: They do hold the veto as well.

00:22:47: So, and I think was talking to one of my other clients just yesterday And they got the license and there's that you know?

00:22:55: They had some local pushback.

00:22:57: their flipped and made a profit which is good though.

00:23:00: But if you if you do play smart You can use those.

00:23:03: you can use The Chornite.

00:23:04: you Can Use All The Local Businesses As An Asset.

00:23:07: Every Every Time There'S A Festival We buy the lantern.

00:23:15: It's five thousand yen, but that is an investment in goodwill of our community and I just think it's a really...I mean i'm a bit nerdy about this.

00:23:23: as a migrant I am more community engaged maybe than my neighbours But you know Im really grateful for having this profitable business that sustains me and family And I want to show them back.

00:23:39: So how do you make friends with your neighbors?

00:23:44: Have this as part of your strategy.

00:23:47: We have a mission statement, who we are and serve what our values are.

00:23:53: that's all translated.

00:23:54: it is bilingual document.

00:23:56: so before even open the doors I'm knocking on all the doors of the neighbours.

00:24:00: i am giving them the piece of paper.

00:24:02: i give clarity to whom they contact us if there got any concerns whatsoever.

00:24:08: couple cookies People remember that.

00:24:15: Most people, what are they going to be worried about?

00:24:17: They're gonna have all these yahoo's with suitcases for hours of the day or night and worry not being able to understand trash rules.

00:24:32: so having first line communication means you've Allay deaf ears, their cortisol goes down.

00:24:40: They're like oh okay I've got someone to talk too if i'm concerned.

00:24:44: that goes a long way for you know making an ally with your neighbors having a mission statement that is communicable That they then understand that they know that you are serious and than not just gonna let You know whole bunch of yahoo's running at run amok in the neighborhood And being able to have Someone who can call.

00:25:06: If they're going to call you, then not gonna call the police which is what that'll do.

00:25:11: Okay I'm really talking too much aren't i?

00:25:14: So gotta keep going here.

00:25:16: so this a deal that looks perfect on paper.

00:25:19: it was had already been in Mimpaku It's three story house its licensed wooden fully furnished and it was in Shinonamachi but strong yielded.

00:25:30: on paper everything looked wonderful But always went check with neighbours.

00:25:36: I knocked on the door of a neighbour and was hounded out, which is pitchfork basically.

00:25:40: He had cameras there... The people who'd done it in the past have done this badly!

00:25:45: And so well-poisoned.

00:25:47: There's absolutely no way to take that deal even though price and everything were right.

00:25:52: not going touch with a barge pole because the neighbours are so aggressive It would just make my life hell but also makes me a guest aswell.

00:26:05: So, bit of a framework.

00:26:08: Zoning fire compliance structural layout so that's you know being able to have all your way to escape routes and also the fire alarms and fire extinguishers which are code And then obviously your neighbours.

00:26:28: Then you need financial stress testing.

00:26:32: The deal isn't price it is pathway.

00:26:35: So if a cheap property with blocks compliance is bad deal, but getting something that's more expensive and clear pathway it's good deal.

00:26:45: I think i've really laid this on thick!

00:26:47: But here another case study had fire compliance breakdown.

00:27:00: The customer had heard what the she-ho, sure she and the ward office said in advance.

00:27:06: Had not communicated that with the person who was doing the renovation.

00:27:14: so they just thought oh I'll do what i want to do.

00:27:18: then get the certificates later.

00:27:20: They were supposed kitchen in the basement and they were supposed to have a fire door on the third floor.

00:27:25: They didn't do that, then of course when they went to get their license it was like boo-boo denied.

00:27:30: so that has been caused them to be half pivoted into monthly rental scenario which means lower profits.

00:27:41: you're still going make money but not as much your initial figures proposed.

00:27:50: So again I take this really seriously, where people sleep is a privilege and also big responsibility.

00:28:03: And you're wondering what gets measured or managed?

00:28:11: These are the metrics that need to be watched at all times.

00:28:15: Gross revenue is vanity metric.

00:28:17: Lovely, I love seeing all that money come through the door.

00:28:20: It is a vanity metric.

00:28:21: What is important?

00:28:22: Is your net revenue?

00:28:23: you're ADR your rev par.

00:28:26: also what's going to bleed is cancellations and Having being able to look after your guests while they are there But also the review scores.

00:28:36: if you've got bad reviews That's gonna like this like a real race at the bottom.

00:28:41: And also you need to have some money in reserve because you will need to keep Keep your compliance up, which means ongoing.

00:28:50: It's not just set and forget like I said that the license isn't at the finish line.

00:28:54: That's the starting point.

00:28:59: Again gross gross in net revenue.

00:29:01: ADR.

00:29:02: ADR means average daily rate occupancy rev par.

00:29:06: these are all hotel terms.

00:29:09: discuss these in the past, so if you need any background on what revenue metrics are how to calculate them.

00:29:17: Marketing metrics – How much does it cost you to acquire a guest?

00:29:22: Now this is important data.

00:29:24: What's your lead time and what's your cancellation rate?

00:29:27: All of those will affect your bottom line Your review scores how the neighbours are, maintenance issues.

00:29:34: If you're not looking after your guests or your house it will cost a lot more to keep up-to-scratch and then also need cash buffers for compliance ongoing maintenance on going fire.

00:29:49: I use dynamic pricing tool.

00:29:50: this is a price lab one of our sponsors here.

00:29:55: You've probably seen the swag out in the hallway.

00:29:58: i love them cannot work without them, do not think that you can manage your revenue on your own.

00:30:04: The dynamic pricing is some of the best money I ever spend.

00:30:08: it means that I'm not missing out on cherry blossoms and I am not missing any issues like when Taylor Swift comes to town.

00:30:18: then price goes up.

00:30:19: so i don't have to manually its all done by Price Labs.

00:30:24: I also use them to analyse the market.

00:30:26: I'm not going talk about a market analysing here, but that's what i do.

00:30:33: But grab it and get some market dashboards how you can estimate your revenue.

00:30:42: So I love, love them.

00:30:43: But it also is important because you can watch the pacing.

00:30:46: How's your property pacing against bookings from the market?

00:30:53: You can adjust a strategy.

00:30:55: if you're getting a lot of bookings twelve months in advance Those customers are not very price sensitive.

00:31:01: So I've got a thirty percent, I have a thirty-percent price bump on people that booking year in advance.

00:31:07: I'm capturing that inelasticity and then using Price Labs to really adjust based automatically what the market is doing.

00:31:20: but you have to stay on top of it.

00:31:22: It's no set and forget type thing.

00:31:26: Also management Cheap management will not maximize your profits.

00:31:38: A manager that's going to be charging you fifteen percent versus a manager who is going to charge you twenty-five percent, if you're wanting to look at a manager whom can squeeze for the fifteen percent how many properties they are looking?

00:31:52: Are they dialed into who you are, into maximising your profit?

00:31:59: If it's the percentage that you're keen on fine.

00:32:02: if its money that get in your bank account every month then come talk to me because thats what I'm more interested rather than being the cheapest property manager of the block.

00:32:17: Photography and MetaDies all those things will give a price bump.

00:32:24: just be careful at the moment because Airbnb for example are going to be dinging people who using AI in their photography, so that's something new.

00:32:37: thats coming.

00:32:43: You need to have enough money every year to get new photography done.

00:32:47: Keep your place up-to-scratch, otherwise it really is a waste at the bottom.

00:32:51: Your reviews will go down as the wear and tear happens.

00:32:55: so you do keep everything fresh And with the property manager make sure that they're aligned.

00:33:02: They are aligned who you are Who your properties or customers.

00:33:07: So CHI last year, Last Summit had some stats on the difference in profits between having a professional property manager and trying to do it alone.

00:33:18: And you can go back to CHI's talk about that to show what the bump is from having a good dialed-in property manager versus either doing it yourself or having a property manager.

00:33:33: that's got four hundred, five hundred doors who really are just phoning in.

00:33:38: Okay so when you delegate this thing is not an abdication like I see...I have certain amount of skills.

00:33:46: I would much prefer to delegate out-to those people who have better skills than me in certain areas.

00:33:54: So, it's an active... It is a regulated business.

00:33:56: you cannot do it alone.

00:33:58: the Shiho Shoshi they firepeople and also all of the compliance in house.

00:34:04: i outsource this.

00:34:08: so even with the best management company in the world You still have to be reviewing data And it's not a passive business.

00:34:19: If you want to truly passive business, like maybe get a read but if your really going into Minpaku there is lot of profit to be made.

00:34:27: But I just wanted give the real talk on how things are going and also algorithm.

00:34:35: You've got stay on top.

00:34:39: But if you're not updating your photos annually, If you are not tracking your performance.

00:34:46: Or doing anything seasonally The license isn't the finish point.

00:34:58: It's a start-point.

00:34:58: So what is cost of getting it wrong?

00:35:01: You might have three to six month licensing delay or two to five million yen in unexpected compliance costs.

00:35:08: You might lose out on a peak season, you might miss out on cherry blossoms this year or you might have dead capital tied up in non-Bible asset.

00:35:15: It's not all doom and gloom because it is usually like a complete disaster.

00:35:21: that doesn't look like a failure but just means to pivot your strategy.

00:35:26: I've been able do that in couple of ways.

00:35:29: people got something.

00:35:31: It was only available for weekends, but with a strategy of a hybrid strategy or monthly rentals and weekend we've actually been able to maximize their profit completely.

00:35:43: So it's never doom-and-gloom completely by just be careful from the start so that delay.

00:35:53: if you don't do this due diligence at the start You will be delayed And that's where the profit margin dies.

00:36:02: So sovereignty in Japan means respecting the system and embrace this structure, respect the process.

00:36:09: And build for long term.

00:36:12: it's not an afterthought.

00:36:13: so here we go.

00:36:15: but if you're wanting to discuss a pathway from Minpaku to Ryokan I've done that Talk on that a couple of summits ago and And also I'm happy to provide the case studies of those later.

00:36:32: But yeah, here's a Shameless plug.

00:36:36: Come talk to me.

00:36:37: if you scan that then that will get you onto my calendar.

00:36:41: So there we go.

00:36:43: Oh i've got a breakout room coming In a bit which well uh...I'll break down some Of The deals and help You know with A personal.

00:36:54: break it down personally if you've got some one that you want to talk about specifically.

00:36:59: Yeah, so that's me!

00:37:01: So any questions there?

00:37:02: Oh

00:37:02: yes we have a few.

00:37:05: The streamers

00:37:06: are already been bombarded.

00:37:09: okay Firstly, from the stream.

00:37:12: If I own a condo in Tokyo and use it for my overseas second home which i also let friends & family use for short term for free meaning they're not charging is this allowed like you did back in twenty eleven?

00:37:24: as there's no income would still be considered SDR.

00:37:26: will that be reported?

00:37:27: Will go to jail?

00:37:29: No!

00:37:31: if your'e not charging money then you'd need people into one month or more and then they would need to have a fixed-term lease.

00:37:45: You know, trying to get paid customers for one night two nights three nights on Facebook that's what is being shut down

00:37:54: And I'll get hands in the room while i'm walking through my hands... I will ask you.

00:37:58: second question What about workshop destination business?

00:38:03: Does it mean the same licenses as a MIMPAC?

00:38:05: who of course with the CHONI

00:38:13: If people are staying overnight, then that's what is considered the mimpaku.

00:38:23: You can list something as a workspace on Space Market or any of those space rental places.

00:38:33: As long as they're not staying at night.

00:38:35: it isn't the same thing so thats not regulated.

00:38:40: What about somebody who does like an artist retreat where people, they don't pay for the lodging but also stay at night?

00:38:48: Well I can think of it now.

00:38:55: Are you as a consultant are helping people license their properties in other markets or focus solely on Tokyo?

00:39:06: Licensing is above my pay grade, like my life's too short.

00:39:10: I work with people and give them the introductions to the people who can do their licensing.

00:39:15: but on all of my contracts... ...on everything that they're doing.. The licensing is you!

00:39:21: I will help you maximise it, figure out your ideal guest or experience or be with marketing.

00:39:28: All those things are me.

00:39:30: But because thats a hospitality business Anything hospitality, I'm there.

00:39:37: But because the licensing is so hyper-local you need to have someone who's local to get that license.

00:39:44: Once your got a licence come talk with me and i will consult with you.

00:39:51: You can set up maximise profit even if im not doing property management.

00:39:59: Im still trained on how best practices And for properties have been involved in, or you manage your area of expertise.

00:40:08: Can give us a rough idea the cost and expense to get the license?

00:40:19: It depends on how much the retrofit costs, right?

00:40:22: The actual paperwork is usually about between a hundred and fifty thousand to three hundred thousand.

00:40:27: Usually what she or her will charge.

00:40:31: but you also need to get the retrofitting done.

00:40:34: You may need fire retardant wallpaper, you will definitely need commercial grade fire alarms, fire extinguishers, and that all needs to be connected to mains.

00:40:47: And it has to done by a licensed electrician.

00:40:50: You can't just get any old sparky or if you know which end of the hammer do use don't Do That!

00:40:56: You NEED TO HAVE THE WORK DONE BY A LICENSEED ELECTRICIAN WHO THEN COMMUNICATES THAT ON YOUR BEHALF To The Fire Department AND THEN THE FIRE DEPARTMENT gives you the certificate.

00:41:09: You take that certificate with all of the other documents they give and trot off to the ward office, then they issue your licence.

00:41:17: so it is a step by step.

00:41:21: It's very clear process.

00:41:24: Take one more question from the room but Tracy will be there for breakout room after lunch as well.

00:41:29: Do we have another hand in the room if not?

00:41:31: We've got one more Question.

00:41:38: If our work is a real estate agent in Tokyo, so if I'm...I've got a client who's looking at the house.

00:41:47: Will you be able to consult with them?

00:41:49: To give them some kind of idea how much ...if it's good spot or...?

00:41:54: Oh definitely!

00:41:55: Absolutely do that.

00:41:56: I use a Price Labs.

00:42:09: what's booking, how?

00:42:11: like the seasonality.

00:42:12: The ADR and also we.

00:42:14: I do like slice-and-dice based on What you're pitching it out.

00:42:19: is this a premium play?

00:42:20: Is this a budget?

00:42:20: This is a hostel.

00:42:23: i can rather than just look at the aggregate of all the bookings I will Like Look at the stats so that they relevant to that particular property in.

00:42:33: yes

00:42:38: So,

00:42:46: this was in relation to the fifty-year terms which have been introduced.

00:42:53: Oh no that's for a meal at the end of the day?

00:42:55: Yeah The one you showed

00:42:57: me.

00:43:00: Okay so not related to Tracy.

00:43:02: Sorry about it.

00:43:04: We will now be breaking for lunch.

00:43:06: You'll report to the breakout room.

00:43:10: But did Charles want like Do you want to put your head around the corner and see if Charles wants to have two minutes?

00:43:18: Charles has sponsored lunch.

00:43:20: So while we have a captive audience here, Charles just wants to...have two minutes of your time so he can come in actually.

00:43:29: Come in here?

00:43:29: Yeah!

00:43:30: He could be on camera actually.

00:43:31: Charles is one of our sponsors.

00:43:38: Yes, Charles

00:43:41: from Tatemono IQ who are very interesting property investment analysis tool.

00:43:47: One of the two we're showing here, can I get you?

00:43:51: Oh!

00:43:51: You got this string.

00:43:52: so give him the stream mic not the other one.

00:43:55: oh maybe

00:43:55: both.

00:43:56: sorry

00:43:57: man handling you.

00:44:00: yes Charles please that's

00:44:01: it great

00:44:02: caught

00:44:02: me off-card.

00:44:03: i was actually doing some coding out in hallway.

00:44:06: So Tatamono IQ is some, let me give you a brief story about the journey.

00:44:11: I started attending this conference about year ago because had plans to invest in property and Japan.

00:44:18: so as i'm looking at deals on running them trying do the analysis are starting building my own tools to facilitate that.

00:44:25: And then one thing leads to another and starting to use AI.

00:44:29: large language models generate AI to assist me with that, so then I kind of pivoted.

00:44:34: Why don't i create tools for other investors uh...to aid them in the type of analysis?

00:44:41: So thats what led to Tatamono IQ.

00:44:44: now when its current form it really targets both a Japanese real estate agent who wants to work at the foreign investor as well.

00:44:54: So for the Japanese real estate agent, the benefit is they could work in Japanese.

00:44:58: They can put in properties that couldn't private listings and all of the information has automatically translated to English.

00:45:05: And there are a I assisted analysis That can be run that educates the foreign investor on the particulars at The Japanese market.

00:45:14: so it's not really a listing site.

00:45:18: It's fundamentally tool.

00:45:19: you put in Properties?

00:45:23: and everyone gains confidence in the decisions that they're making around their investments.

00:45:29: So, that's the fundamental premise.

00:45:32: so we launched this weekend.

00:45:35: stop by take a look.

00:45:37: I can give you demo.

00:45:38: there is lot of information on site.

00:45:40: it's tatamonoiku.com.

00:45:44: In case don't know Tatamono means building Japanese.

00:45:47: so this is Building Intelligence And we're running a special introductory three-month free trial.

00:45:56: So I encourage everyone to take advantage of that.

00:46:02: Thank you very much, Thomas and thank you very.