Transcript
Speaker: Hey guys, it's Joey here. We recorded this podcast quite a few weeks ago. In this episode, we talked to Nin, one of our earliest AMD customers. Nin talks about the houses he's bought in Kamakura, Japan, and also one in Sangen Jaya.
Speaker: He's currently Airbnb-ing them, so stay tuned for an awesome episode. Yeah. So this was one of the walls and i I picked this one specifically because it looked dramatic. I mean, the house did not look like this. It was actually a lot nicer, but in the middle of the wall demo, I had asked at Sumy and the construction company, Hey, every time you guys visit, can you just update me on photos?
Speaker: So they updated me and they sent me this photo and it looks very dramatic in the sense that the wall is missing. that's right oh The wall is missing and the floor is all getting redone and stuff.
Speaker: ah The house was in way better condition than this. Obviously, this is the middle of demolition. And Atsumi, I put a notation here that Atsumi recommended that I turn my six bedroom home into a five bedroom home in in you know the home near Enoshima Island.
Speaker: And we did that. And then this is it looks like now. Ooh, damn. That's why there's two columns here. that Those were weight-bearing columns here and here. And now it looks, it's very large now. It's very open.
Speaker: ah There's a dining table for eight people. You can actually see the beach out of these windows if you sat kind of like in this area and looked out that window.
Speaker: Welcome back everybody to another exciting episode of buying a house in Japan podcast. Uh, I'm your host, Joey joined again by my cohost, Taki.
Speaker: Welcome today. We are joined by a returning guest, a very special returning guest. Uh, we have Nin in the house. Nin is, uh, he went through our AMD process, uh, purchased a house in Japan and then bought two more houses.
Speaker: On top of that, uh, Nin is also a wealth of knowledge about the economy and has a very, uh, interesting, uh, strategy for investing in Japan as well. So welcome Nin to the podcast.
Speaker: Thank you for having me back, guys. I have a really good microphone this time. And as a result, sound good right ah i i on this computer, it's my quote, big computer. I don't have a web camera ah attached to it, but next time maybe. But then my office, my background looks, it's it's kind of messy.
Speaker: so I'll go next time. Crystal clear sound. Excellent microphone. Yep, 10 out of 10. And you've been our, I think, most requested guest recently. We have a couple people who have been like, hey, wanting in back on, they really do appreciate your analytical approach and looking at the economy.
Speaker: I think this is our personal weak point. Joey and I were just talking about it. We just like we're we're bad investors we're kind of just emotional investors i'd say but then tell us a little bit about yourself your little your background i know this is the second time but would love a reintroduction sure uh i've been teaching at san jose state for ah going on this is my 26th year it's it's been a while in fact i had a student that introduced themselves to me last week and said, you know, they asked me, Hey, are we going to cover XYZ topic? And I said, Yeah, we we we will cover XYZ topic.
Speaker: And then he asked me if I remember him. And I'm like, No, I don't. i'm Sorry. He's like, twenty two years ago, you know like 22 years ago, I took your class and I'm back to to do the graduate courses with me. And I thought that was very flattering.
Speaker: ah you know, it's been 22 years I had hair or, you know in my icon that you see there, I'm shaking, you know I shaved my head, but You know, before that, 20 some odd years ago, had hair. 26 years. Congratulations. Yeah.
Speaker: That's crazy. Yeah. It's crazy. Go Spartans. what's the What's the San Jose State ah mascot? Spartans? Yeah. Yeah. Spartans. Spartans. Go Spartans. And then I do a myriad of different investments on the side.
Speaker: uh, ranging from private equity, hard money lending, and, uh, venturing into Japan and other countries to invest. Um, and, and, and, and as an aside, and this is totally outside the scope of this podcast, but if you look up the Turkish lira, their currency is just declining against the U S dollar big time.
Speaker: So if you were to pick up property there, ah you can get them at, you know, your dollar stretches quite far there. It's kind of like us in the West buying in Japan when it was 155 or 158 or, you know, even now at 148 or whatever it is now, it's it's still quite you you still get good buying power as a West. When you say that, man? I just came back from Turkey, right? yeah exactly were When you said you were in Istanbul, I'm like, what are you doing? Sarkoi, Turkey. It's a great beach community. I'm such a sucker for beach.
Speaker: huge community properties. it's It's interesting. Joey and I were we I've gone a couple of times in a row, I think maybe twice with Joey. And like the currency thing is crazy where the prices just are fluctuating so much. I still felt like it was expensive right now. But are you saying it's going to be more affordable for Americans? If you look at the Turkish lira, it's been in a freefall since 2013, 14 against the US dollar.
Speaker: So that means in local currency terms, ah if you don't own the local currency and you own, you know, wealth preserving assets, like maybe it's real estate or maybe it's just land, then you made out like a bandit as opposed to holding on to savings of local currency cash.
Speaker: yeah yeah that's why btc kirk is sponsored in every airport terminal i think that's their their crypto exchange basically yeah yeah so they're they're they're trying to find a way out and and because of that everyone's kind of overly invested into hard assets which makes sense i mean if uh during the years of 2008 through
Speaker: You know money was cheap, but I believe that was the anomaly here in the West was interest rates were really low and it made all of us, you know, baby boomers or Gen Xers. buy real estate on mass.
Speaker: Like that that's, that's all we knew was to do that. sorry All right. in predictions for us dollar to yen ah exchange rate, any hot question, ah I think it's interesting.
Speaker: If you look at the bank of Japan, right? So let let's let's scramble. Can I present or can I not present? Yeah. Yeah. you can that Do I do with a screen share? What do I do? do do this? There's like a little screen share button next to the smiley face on the bottom. Okay.
Speaker: side So click that. Is that visible? Okay, we got. anyway Let's go, Professor Ninh. Okay. so So let's scramble all the way to the one of the last ones, ah which is slide number 12 in this PDF. I didn't even make like a proper PDF presentation or a PowerPoint presentation. It's just a PDF. That's a guy professor here with his slides.
Speaker: so So this is the macro economic pathing. um And I know this looks kind of confusing to me. Yeah, yeah. So so let's let's go to like a time series of data. And this looks a little more digestible.
Speaker: And what you see here is going back to 2018 on the far left, all the way to 2029 on the far right of the time series. And you could see the red line represents the rate of change of of of inflation for Japan.
Speaker: And then the blue line represents the rate of change of GDP. When we, I've been following you guys' as like renovation stories and stuff like that. And you guys bought somewhere in kind of like this window. If I had to guess, if I remember correctly, it's somewhere in late 23 into 24. Yes. yeah correct So that was the actually ideal window because GDP was rising.
Speaker: And, and CPI was falling. And that was about the window where I was scrambling as well to buy things. It was just kind of like, I was just, I think you're a man on a mission. I think was stressing Ro out really um because that was the window of opportunity and what you see now.
Speaker: is the window of opportunity somewhere else. it's It's you can still invest in Japan. It'll just be in a different vertical. It it won't be single family homes. um Now for the exchange rate, if you look at the Bank of your Japan,
Speaker: ah They didn't raise rates. They keep threatening to raise rates. But I suspect they see this. They see the slowing economy. And I think they are waiting, you know, the economies and GDPs in blue.
Speaker: They're seeing the slow economy. Why? Because we already have the data coming in. and they're seeing prices fall. But but that' that's a little misleading. That falling of CPI that you see is a function of two things.
Speaker: Is they're trying to bifurcate the market, when I say they, not the Bank of Japan, but local and local businesses. I don't know if it's from the ward. I don't know if it's mandated by government, but have you noticed that in Kyoto and Asakusa, that there is two-tier pricing now?
Speaker: one i've heard of it yeah one set of pricing for tourists and you know locals so what i suspect will happen to the reporting of cpi if housing is not a big part of that calculation is you'll see cpi fall and well actually we we've been seeing it so so on a rate of change basis you'll see it fall and then the economy starts to pick up uh into 2026, you get the rounding, if you will, of GDP and then prices keep falling. So we're going to head into this kind of perfect scenario of disinflation for the local economies or for fur Japan,
Speaker: Japanese in Japan, right? Which then puts us as a Westerner at a little bit of a disadvantage. um We probably won't see enormous amounts of yen strength. In other words, we will probably see a, for lack of better words, the carry trades back on baby. no ago You know, we will start to see a a more stable to weak-ish Japanese yen. Like right now it's 148, 150.
Speaker: that That is, by historical standards, I suspect cheap or cheaper relative to the U.S. s dollar. um So I think a stable yen from here on out.
Speaker: I think the Bank of Japan saying they will raise rates if if CPI gets out of out of control ah is just rhetoric to keep expectations kind of grounded.
Speaker: So I suspect a very stable yen. I don't see it falling out of bed. i don't you know We're not going to go to 200 or anything, um but who knows. I don't think, you know the if if it goes to 200, I suspect the BOJ is quite scared and they're just going to cut rates because they suspect GDP. I mean, they don't get to see out to 2026. I'm sure they have really smart people.
Speaker: But if they think linearly, if I'm just going to draw my mouse over here and we just continue, if they if they only see this part and they think it's a linear decline down in the blue line, then they will cut rates out of nowhere and surprise everyone.
Speaker: Yeah, then then at that point, I can see the yen go to 200 or 180 or something like that. But I suspect not, because if they can kind of just kind of hold hold and not do anything and until like 2026, they'll start to see the economy do well.
Speaker: Yeah, I also agree. I don't think we're going to see some, i think it's also politically not great for, you know, the government to be ah governing over such a weak yen. I just think it's lose, it's you're going to lose bleed voters. So I think yeah it's a political mistake to even let let the yen get, yeah you know, get that weak.
Speaker: I suspect if you just kind of wait, the economy gets better, everyone forgets, and the yen just kind of stays where it is. which I think is fair. I think it's not 160. I'd like it to be 160, but I think local people probably don't want 160, right?
Speaker: um So in that 140 range, I think is quite fair. i think i think we're pretty I think we're pretty stable around here. Yeah. Sweet. Yeah. So are you still buying or not or waiting for the question?
Speaker: um I'm waiting. So if we go down to I think this is page or slide or whatever you call it slide 12 is. It is that we are the best. jeff that right So this one we've seen before, right? It's me buying Japan real estate. And then the phase two part is something.
Speaker: that I had reached out to you guys before, which was, um you know i so i bought all these places in cash. Is it possible? I posed the question, is is it possible for me to refinance out?
Speaker: And there are pathways after speaking to everyone that you recommended, there are pathways to to refinance that money out. And I suspect- That's great. Yeah, yeah. so So whether or not that occurs, I still have to wait for the income of all these properties to season properly. So two to three years.
Speaker: So looking out two to three years, if I'm able to refinance, pull out okay that whatever. That was the timeline that I'm assuming you spoke to Emil maybe or or someone knowledgeable in this space. They they said about two to three years.
Speaker: I think we need ah two years worth of documented income to see if the if the homes or or if the business can stand on their own. So then i it could be a non-recourse loan.
Speaker: That's optimistic. That's good to know. if it do Yeah, but if it is a non-recourse loan, then then it'll be an entity onto itself. It can stand on its own feet and I can refinance some money out. but The thinking is is, I've spoken to ah you know a few people that you've recommended ah and they said, roughly, if you're looking at it from a business perspective, the bank will allow you to mortgage yourself such that you get you know whatever your income is, your net income,
Speaker: then a third of it can go to debt service. they They don't allow you to over leverage. So, you know, not like the West, but, but a third of it can go to debt service, but that's okay. Because if my income's high enough, like with Ito,
Speaker: uh and sang and jaya will probably follow as it builds momentum and then kukunuma i have a strong feeling kukunuma is just gonna whip all right name kukunuma i'm putting my listener hat on do you mind just giving us a quick overview of each one of those properties or like sure i think yeah i would love to have first yeah okay go ahead yeah sure sure ito was my first purchase and uh I purchased it solely based on the location of where I would like to vacation as well as local Japanese would like to vacation. It's you know it's usually Ito, Atami, like kind of the beach communities that you get away from or to get away from the city.
Speaker: I saw the pictures, the realtor, but first of all, the home was on the market forever. awesome um I think like 400 something odd days. And other pictures in the slides here and no, no but of the eto home no, no, I don't. I should include them. I'll make it the cover.
Speaker: It's going to be the cover of the podcast. um But I noticed that the realtor pictures you know ah you know, it wasn't shot with like a camera with a compressed lens. It was shot, I suspect, with an iPhone.
Speaker: And so then, but I'm a big camera nerd. So so I actually, oh I'm not like, oh, if I saw that angle and I shot with like 135 mil lens or like a 200 mil lens, it would look awesome. It would, you know,
Speaker: make the beach appear very close, even though I'm actually pretty close to the beach, it would make it look even closer. It would like pull it into the living room. um And sure enough, it it was nice. It turned out really nice. I did minimal things other than add AC and bought furniture.
Speaker: but You absolutely nailed that. And then like that photo where you have the ocean and the the two futons and stuff, that's I think you're like hero image. Yeah, incredible.
Speaker: Like probably the best, best photo I've seen of anyone we purchased. So hats off to you or who you directed it. But I know who took the photos for you. Was it Dio? Dio hired someone, right? It was ah a Tokyo photographer.
Speaker: And I forgot his handle, but his company name is Photos39. Okay, photos 39. We gotta hire that guy. I have his Instagram handle somewhere buried in my emails.
Speaker: And I saw a little bit of his work and I said, okay, he's the guy. Ro recommended him and ah a a few a couple people. And then I saw i saw his Instagram. I said, look, that's the guy. He has a very similar eye to how I would shoot it, but I'm not there.
Speaker: you know i'm not gonna I'm not gonna fly in shoot it. Ito property, how long did it take you to buy that? I know it it feels like we've been working with you for a while here. So it's I think it was actually pretty, it was pretty quick. It was pretty quick. um I think it the whole process took about two months.
Speaker: Yeah, from start to finish getting the inspections, reading the inspections. And then, ah you know, sending the money to row, I think it just took a while just I don't know why it just takes about 45 to 60 days. a day And if I look back took about 60 days.
Speaker: Yeah, we're finding that our average kind of deal timeline is about 90 days and we're still trying to figure out that everyone's a little bit different. and But I guess from your first rodeo there, what kind of surprised you? and Like, what do you think was the slowness or where was the friction?
Speaker: Uh, I think it was, i think the friction was mainly, you know, it's a little different in Silicon Valley when there's a deal.
Speaker: we we act immediately like you want to close in 10 days yeah i can close in 10 days and then and then we can close in 10 days um but i don't know i think administratively i think there is a scheduling with the scrivener and a scheduling with the the uh listing agent and then rose schedule they all have to kind of be there all at one time to kind of read the contract like that that old school everyone has to read every page You know, um I'm thinking to myself, i'm I'm glad I don't have to be there, but but i think I think it's just that. I think it's just administrative scheduling things, um and which then takes a while and kind of drags out the process. And that that's more of of yeah that style of business culture. i don't think it's anything...
Speaker: you know we can do yeah speed it up yeah the good news is though that in japan the seller will if you're first in line and you've submitted an application to to purchase the property you know very very rarely will they let anyone but in in front yeah in in front and line of you so you know as long as the process does have friction and you know there's there's gaps where you're waiting for this meeting to happen but the good news is like there's no one that can cut in line in front of you. Yes, yeah, and and I appreciate that process, you know, so then it's, you're not just bidding against, you know, some rando buyers
Speaker: um Yeah. And you have to bid the price higher. Yeah. But but I'm glad that is the case. How have things been going? So you've had the property you've you know, Dio has been quarterbacking. I know a lot of projects of interior design, but where what's the current state of Ito Ito property?
Speaker: That overly surprised me. August. We just finished August. in the in towards the third week of August that's when I sent you guys the screen caps of like oh wow my August looks looks looks really cool ah um in August we we we finished August because we're in September now we collected close to 1.8 million yen so that is if you at the current conversion that's great yeah that is 12 209 dollars American gross Ro takes you know his percentage, um which is a sizable chunk, but I think it's well worth it you know for him to manage that property um and for me to pay all the cleaners. I'm clearing probably 9,500.
Speaker: ah nine thousand five hundred in August. How hands off are you? I'm actually very curious about this. So, you know, going with Rio, who's kind of a to Z manages the property for you. mom Do you feel like you're doing a lot? You're in the weeds a lot with these properties or do you feel a like I used to at the beginning? I was, you know, I would be like, I got to respond to this. I got to respond to this guest. I got to respond.
Speaker: But then I realized they they have their own processes. You know, um I am not self managing. and And that's one of the things about me is is I self manage a lot my other properties and in Hawaii and ah and other parts of California.
Speaker: And I realized that um if I have a full service manager, I don't want to step on toes and I just kind of let them respond in their normal, you know, whereas me, it's kind of like a, I need respond now.
Speaker: ah But, you know, I've realized to kind of let it go and then ah they are responding, but I still keep an eye on all the communications. so Yeah. And I think you do a really good job on email communications and like making those executive decisions when it's fast. I'm on CC on all your emails and i I think you work very well with interior designers and give a lot of good direction where i think Joey and I initially when we did some of these renovation projects were like, ah you guys just do it how you think should be right. Or like we gave ah a lot of freedom.
Speaker: And I think something you did really well was give a lot of direction and were very quick on some of these decisions on design and stuff like that. Any thoughts on that? Yeah, I, you know, I don't know a lot about interior design. now Like I, if you showed me the final look and I can make a decision if it looks nice or not.
Speaker: Problem is though, you don't get to see the final look, right? You kind of have to make decisions as you go. So the big, the, the big, I guess, advantage is Roe recommended someone, ah you know, Ima or Atsumi Ina in Shizoka, and she did a phenomenal job. She basically had a questionnaire and asked me you know, what do you like?
Speaker: And it was a pretty thorough questionnaire. I was going through that questionnaire thinking, oh my gosh, this is so long. but But by the time I was done with the questionnaire and I gave her some samples of my other properties, she got a feel of what what I was looking for.
Speaker: um So she just kind of ran with it at that point. Let me see if I can't find this and share a different screen. um This is. We've spoken with Aksumi too. She's great.
Speaker: You know, we've got yeah advice might be using her for some projects. Yeah, she she did a phenomenal job. um The property near Enoshima Island, which is in this kind of neighborhood called Kuganuma.
Speaker: um I mean, we're really close to the beach, um like really close to the beach. I can hear people cross the street. ah when they go to the beach.
Speaker: um And there's a Hello Kitty theme room here too. comes ah It's hard because I don't have it saved right away. But let me see if I can't get to it.
Speaker: um Let's see. oh wait, if I it actually stays on the Facebook thing, huh? um Let me see. i got to unshare to reshare, right?
Speaker: Yep. unshare to re let's hear the story behind the Hello Kitty room. Was that spur of the moment? Or how did that come about? Yeah, my my my wife said we need a hero shot or she didn't say hero shot, but we need a room um that is
Speaker: You did that? that's That's really well done, I think. Yeah. I imagine it more like amusement parky, but I really like it. No, no, it's very subtle. I mean, it's not subtle, but it's... It's subtle enough. Yeah, yeah, yeah.
Speaker: It's not over the top, but it is kind of over the top. um And this particular home, the rooms are actually quite large. So to give you context, Let's make sure I don't close the wrong window and boot myself out of the did the meeting here.
Speaker: If I do that. Okay. So this is the Kugunuma home, but I have two bedrooms. I can fit two full beds with space. These are large rooms. yeah Yeah, they're large, right? That's a rarity for a Japan home. put desk here because we didn't know what else to do.
Speaker: like Like we have a desk, a workstation. So then Kukanuma is number three. So Ito and we're now looking at your third property, Kukanuma, right? Yes. Where is that in relation to Ito? actually have never been to Kukanuma.
Speaker: So I have this, ah let me share it's part of the PDFs. Let's see, present something else. Go to the PDF. Boom. I'm so prepared. Yeah, right. Because last time i felt like last time i just did like a mind dump.
Speaker: and and And in doing so, it sounded great. But then I'm thinking to myself, hmm, I need to be more organized. Yeah, you did a great job. Okay, Kukanuma.
Speaker: Yeah, here's Anoshima Island. ah huh And what I've done in this purple kind of amoeba shaped thing is i'm I'm circling the two neighborhoods that is pretty coveted, which is Kuganuma, which is where my mouse is hovering over.
Speaker: And then Katese. um and Those two areas, anywhere in that green is Hotel Zone. um This is your guys' website. That pink dot right there, that pink dot right there is my neighbor.
Speaker: Is one of my neighbors. And he is selling...
Speaker: or 643 000 and he is just a 2ldk i say just but mine is now 5ldk or was six but you know we absorbed a room so it's a 5ldk with bedrooms as big as the one that you saw that has the ability to have two full beds and his is about half the size as mine He's asking 643 now this house is dramatic.
Speaker: It looks nice. You have the staircase going up to the the rooftop and then you could see the entire neighborhood and beach. um From this and he's asking 643 I'm sure he's going to get his price.
Speaker: Now, if you remember way back when, when I purchased mine, ah do you remember the price I purchased that? I'm going to guess wrong. Just what, what how, how good of a choice did you make here?
Speaker: Uh, three 50. Oh my goodness. It was less than three 50, 350,000 American. This is your neighbor. Whoa. Yes. He is like one block over. Cause you know, when I was there last summer, this just past couple of months, i was like, I'm curious. I want to go find this house.
Speaker: I just kind of like casually walked by. He's literally in the same Kome Kuganuma Kaigen to Kome. Um, The entire area is very, ah they call it the shonen lifestyle.
Speaker: And it reminds me so much of North Shore, Hawaii, Oahu, North Shore. It's very towny, very Hawaiian, very, it has really good vibes, very party vibes um there.
Speaker: Yeah. Okay, I mean... so So where is this in relation to Ito? It's actually, it's like the halfway point. If you think of like where Sangajaya is, and then where Ito is, Kuganuma or Anoshima Islands, like right in the halfway mark between the two.
Speaker: Okay. how do you How do you get there from, I guess, how do you get there when you go? i Last summer, or in July and August, I just have a ah private driver drive me everywhere.
Speaker: Nice. Yeah, so he he has... like a very large, uh, van. i mean, it's large in Japan standards. So then it was enough for my wife and three children and, uh, and all of our luggage. So he took us, ah from each home.
Speaker: Um, when we were going through our trip slash business work, That's so smart. I feel like Joey and I, we like lose so much energy driving. We do like these really long marathon trips. and i you know They're good and bad, but at the end of the day, they do take a lot of energy. Joey, I know you have something to say here.
Speaker: was going to say, I kind of like driving in Japan. and yeah but um so okay so But property number two, we haven't spoken about. Sangen Jaya. Sangen Jaya. How's that one coming?
Speaker: So I actually have... And how fast was it between purchasing the Ito one to going right back to the search in Sangha Jaya? I remember that was very like one right after another.
Speaker: it was like one after another. i i purchased Ito, then i I was in contract to purchase Kukanuma. but then that took a long time due to inheritance and you know the the the one of the owners the the grandpa or the father had health issues so we had to kind of wait for that to kind of dissipate before we close the transaction um and i was really respectful in this i like basically told roe whatever however long they need to to kind of figure that out and close then i will give them all that time i'm not going press any timelines.
Speaker: So we got. just on Yeah, I'm sorry. No, no, no, no. Continue the story. Oh, okay. So, so um ah we got in a contract. I finished Edo in November and we got in a contract in the for the Kuganuma house in December.
Speaker: Right. We're literally right after. Yeah. And I didn't close on that until like May. And then no May slash June. And then I i contacted at Sumi and I said, Hey, ah we're going to have to like renovate, put everything in.
Speaker: I'm flying in in July. Can you make it happen? And sure enough, oh my gosh, Sugimoto Contestu Construction, not sponsored. so They did everything in three weeks.
Speaker: What? Yeah. hey Three weeks is crazy. Yeah. To not crazy rip everything out, put new floors in. i mean, They took three weeks and then Sumy took like three days to put all the furniture. And of course, all of this was pre-ordered. I've already made my selections.
Speaker: um the The construction company recommended a floating sink in the bathroom. And I'm like, sure, whatever, let's do it. ah um And then they finished literally a week before my arrival.
Speaker: um Not because i was arriving. I said, Hey, if we're not done, we're not done. I'll just stay somewhere else. It's no big deal. But I would kind of just like to pop in and see it. And then next thing you know, everything was done.
Speaker: Good pressure. Just just stopping by. um But I didn't have to stay there. I told him I don't have to stay there. i could I just want to know the area, see the area with my own eyes, know who my neighbors are.
Speaker: um And then, you know, see if there's anything like structurally that I could fix since you guys are already here. But then, you But that was quick. And then Sanghajai was the last purchase, but it was the fastest purchase. I think that took 45 to 50 days because the sellers needed to sell.
Speaker: And I was i was like, okay, I'm ready to buy. so you know can we close this quick? um But that was a little bit faster. Sanghajai was the fastest close. All right. So, so which is your favorite when you, when you go on a personal trip to Japan, which one do you spend the most time at or which one do you want? Oh man, if it was just, it was just me and my wife, we would love to be in Edo.
Speaker: um Oh, the Ito one, number one. Yeah, it's it's it's it's very peaceful. And when you walk down from the house to Ito Station, it's such a beautiful walk. I take this path that doesn't look like a path.
Speaker: And my wife didn't think it was a path. And I'm sitting there think telling her, and go, no, no, no, it's a path. It looks like a path. yeah Yeah, right? So let's go ahead pass. So we go, and next thing you know, it opens up to like this, like,
Speaker: cliff, no, no, bad way to say it, walk path where it is maybe one and a half humans wide. And there's a there's a metal railing. So it lay looks like a cliff, but the river is right there.
Speaker: And if you traverse that, and I'm making it sound dramatic, it's not, it looks safe. You then walk through a weird way, a weird back way to get to Edo Station. And i I like that stuff. Like, I don't like hiking per se, but I like just exploring the neighborhoods and kind of getting lost in all the little back streets.
Speaker: And The whole shopping area of Ito is very quiet. It is not fully occupied, but it is very charming. It is very charming. And the entire area is just very peaceful.
Speaker: um Like, i I can't take Shibuya or Shinjuku a lot. You know what I'm saying? I like the peacefulness. Yeah. And you nailed like that feeling. I think that's such a unique thing. Like every time we go to a new area or buy a new house in Japan, it's like that exploration of finding those secret paths that lead to this cool outing is like one of the best parts of this entire experience, I would say.
Speaker: Yeah, I agree. I agree. um In Sanganjaya specifically, this area, um you know, everyone goes to Sakai Dori Street or Chazawaduri Street, but there's this area between say Sangajaya one Kome or two Kome leading to one Kome. There's all these, ah it's it's a back alley,
Speaker: like, are there really streets here? You know, like, you kind ask yourself, but there's, like, a whole, like, part that I don't think tourists get to see. I mean, the nightlife in, I mean, Sanghajai doesn't really have, quote, nightlife, but, like, the evening life, you know, if for dinner time um is just...
Speaker: I enjoy Sangha Jaya as well. um It's not as crazy and bustly as Shibuya, but it is very homely, but like city-y, if that makes sense.
Speaker: um so of the But of the three, if if if we were going on just a quiet trip, getaway, just me and my wife, me and my kids, my kids love the Ido home, by the way, um they walked in, they're like, holy crap, dad, you bought this? And I go, yeah, I did.
Speaker: um But that that'd be our first place. so We just love it We were there. um We went to the Izu Shabbaton Zoo. Have you any of you guys been there? The Izu Shabbaton Zoo?
Speaker: Shibaten Zoo? no ten Yeah, I totally mangled the pronunciation. um but But we went at opening because my thinking was, is it's summer, it's hot, it's humid. So we're going to go at opening when it's cooler.
Speaker: and it's higher elevation so it was cooler it was much cooler and we were able to feed the capy but they just let the capy bars roam no really yeah they just let them roam um so we're just havingationing yeah yeah there were llama or alpaca i didn't know which one it was but as i was feeding the llama alpaca i can't tell the difference One of my sons were like, dad if you're going to feed them, feed them, because if they don't, they spit on you. And I go, oh, okay. So I started, but every time I bought food and got near them, I was like, here you go, here you go
Speaker: But we were able to feed the capybara. And it was a very ah fun experience because they get, you can you can there you can hug them if they let you.
Speaker: um ah But let me see if I can't. share that there you go there's a picture of me oh my god that's so cool this green onion looking thing is i think that that's what they eat because you have to pay you go into those like this little cupboard you drop 100 or 200 yen in and you get like a ah little tassel of food that you can feed them and that's yeah literally that's how close you can get to them and there's like an army of them they're just like everywhere well worth it, I think. That alone was like worth the price. Yeah, that was worth the whole Eater trip. My kids drew were like,
Speaker: And my kids are in college, so they're older. um So, so, so there, when they were there, they're like, dad can we just hang out for another 30 minutes with the capy bar? And I go, sure. Cause it was all shady. Right.
Speaker: right so So it's like a petting zoo. It has the petting zoo smells. Yeah. yeah And there's like mountain goats. That you can feed and it's actually pretty cool. They have these ah rope lines that you can clip the food on and you like do the curtain like you like you're pulling a curtain string and it pulls the food up into the top of the mountain and then the goat will actually climb this like fake quote fake bouldered mountain to go grab it.
Speaker: And I'm like, man, they are good and climbers. ah So well yeah, that was worth it. Everyone that visits the Edo house always goes to the Shabbat and zoo. Oh my goodness. I'm always to be watching a video.
Speaker: Are they, are these capybars sitting in onsen? Just hanging out? they have their own onsen. They have their own onsen water. They have their own pool. They love it. Yeah, they love it and they just hang out.
Speaker: oh And they're so chill. They're, they have this, the the picture with the capybara with me is a very large capybara. um One of the larger ones in the pack, but there are like baby ones, the size of like dog puppies that are just running around and they're just like, feed me, you know Yeah. All right. where We're going here 100 percent. We're we passing and by tummy area. And I'm a Shiba Tens. Yeah. yeah
Speaker: And then um when we're done there and it was getting warmer right around 11, 12 o'clock lunchtime, we went to Mount Omero. Because my thinking was, as it's getting hotter, I need to think about traveling with children, wife. They don't like the heat too much.
Speaker: So then as we go up Mount Omro, the elevation was so high, it was it was cold, not cold, but not warm. Yeah. So that was quite fun.
Speaker: want to go back to the Sangin Jaya property because I think this is what we're we're really interested into for ourselves personally. So Sangin Jaya is, and we've heard such good things about the neighborhood, but tell us a little bit about the, I guess, purchase price. And I know you you you have some figures on how things have changed since you purchased it uh yeah i think if you were to buy anything in sanghajaya it's going to be very difficult so what you're seeing here i think my mouse is hovering over sanghajaya station there's actually it's not just one stage there's actually five entrances to the station around this notation here and i purchased mine for call it all in shy 500 000 so like for something
Speaker: so like force something And one of my neighbors, this is not my neighbor, I'm actually closer to the station, but this this pink dot here that I've notated is a home that is actually smaller than mine.
Speaker: it's it's if They say it's a three LDK, it's not, it's a two LDK. They're counting the loft bed as the third bedroom. i have I have a three LDK with a loft bed, which would technically quote, make it four LDK, but I'm not marketing as a four LDK. In fact,
Speaker: I have a sign, uh, row printed me a sign that says, do not use the loft bed. Like we don't even count it in our Airbnb. Um, mainly because you're going to have to use us very similar ladder setup and I don't want anyone kind of climbing up there.
Speaker: Um, Yeah, yeah. But I purchased mine for just shy of 500,000 all in. And this guy um is listing it for 732. So we're talking about a 50% increase in price over the, I don't know what, like eight months.
Speaker: So what you're seeing in in and not just Sangha Jaya, but in the greater Tokyo area as well, is if there's a recession in a different country,
Speaker: And i'm I'm speaking specifically about China. China has is going through their 2008 recession, like like similar akin to our 2008 great financial crisis. They're going through it now for the last three years. so So in currency terms, their currency, no one wants real estate there.
Speaker: So their currency is rising in value. So that's why in the Enoshima Island, Kamakura, Yokohama, and even mainly Tokyo, all that funding, all that money is escaping China in stronger currency terms to come to a country where the currency is relatively weaker.
Speaker: And that's why you're getting that underlying bid in price. Um, And you you hear, and I spoke with one of the referrals of a referral that you referred me to, i know that sounds weird, but you referred to me to Nick Woosley and Nick referred me over to Creston Accounting Services and in Tokyo.
Speaker: And they were they were actually, they as I was conversing with them, you know asking them about refinancing, international accounting, um they asked me if I was a Chinese national. but And I said, no, I'm not a Chinese national because they said that their client base is mostly Chinese nationals.
Speaker: And they are buying at an immense clip where people are just chasing. Yeah, they're they're not. I don't think they're chasing like, quote, capital gains.
Speaker: I think they're just chasing stability. Parking their money somewhere. Yes. Yes. Just not parking it in like real estate in. Shenzhen or somewhere where it's like it's resetting itself back to 2013 prices.
Speaker: I mean, they're losing roughly 12 years of price appreciation right now in China. who so So I told my wife that she's like, no, we're not buying anything in China. And I said, I know, I know. i'm just I'm just making that aware.
Speaker: I'm just making you aware of the price drop. Because if you if you think about here in the US, if prices got resetted to 2013, holy crap, I would buy everything. Absolutely.
Speaker: Wow, that'd be insane if that happened. But Joey, we actually just got outbid or someone came in and bought a surf house we were looking at in Tokushima, all cash, Chinese buyer. So we resonated. It does sound like, and we do agree with you, we've been seeing pretty high volume and sometimes even concern from the Japanese side around a lot of these Chinese buyers. But you nailed it. And it's interesting to see and think about it. you from like different, you hear it from,
Speaker: like your local realtor. And you hear it from the listing agents like, I'm sure like in one of the videos that Ro put together for me because we looked at a different house in Katese that that I got outbidded on or I didn't make my move in time.
Speaker: But the listing agent was asking if I was Chinese. And then I could hear Ro saying no, he's not he's he's Californian. There we go. right and The right, right. I don't know if that's better. Ah, to some but some places maybe but yeah, I hear you on that. um my Like, no, maybe in california you got to rework that as I'm Canadian or something. yeah not yeah for um But here in saying a Jaya I think the I think now if you if I had ah budget, I probably wouldn't buy, you know, like the home down the street, you know, it's 732 just the numbers don't work even at an Airbnb level.
Speaker: So then you have to focus on kind of where I'm heading, which is you get the gist of it in the the emails I've sent Roe the last couple of months, which is I might focus on this property right here. And this property is in Taishito, one Kome, still close to Sangin Jaya. It's technically considered in a neighborhood sense, Sangin Jaya, but it's in Taishito, Taishito, one Kome.
Speaker: And that property is this one. Now this property- You're on a roll. Here we go. It just, it makes sense. It's building and building. This one looks like a fortress. Oh my goodness.
Speaker: So this is a, kind of ah it's a reinforced concrete building. So that's a plus. Has parking, also a plus. It's 1.5 million, but it's a multi-unit. Yeah, if you look, you know, I can't click on it because it's the PDF file.
Speaker: But if you go DocuMart and you click on this particular listing, it's it's it's three units in place. And then the first floor is used to be a business. So then it's very easy to convert that first floor, which is the the the back to a unit a rentable unit.
Speaker: So then your your per unit cost would to be whatever one point five is divided by four. And then now you would have diversified Airbnb type income. Yeah. Do you want to rent that bottom space to us?
Speaker: We want to run a coin laundry, Ninh. Oh, I saw so many of that. Like coin up laundry? Why? why are Are the returns on that pretty good? Or... Again, we're lifestyle investors. We're investing in our lifestyle here. We just think it's cool. We are not in any way know anything about the ah ROI on it. just Just an idea. If you ever if you can't find a tenant, we might be interested.
Speaker: Okay. Okay. I think this is where the investment investing is going now is, you know, if if Chinese nationals and other countries that are in recession where their currencies are stronger,
Speaker: and they can buy their money stretches further in japan they have to go to multi-unit um i i spoke with uh the referral from nick again made the introduction to me um her name is alicia wang over at axitole capital she's talking yep yep she's spoken many times on ziv's real estate convention thing and i actually spoke with her and she was you know I was you know poking you know picking her brain about the whole refinancing thing. And and she was saying how um for investors like us in the West,
Speaker: it it it the banks will lend you yeah yeah or or you can get a loan from a bank if you put enough money down. And it's it's a multi-unit apartment, eight units or more.
Speaker: And it's long-term rent. um which is kind of not my niche, but, but still um the pathway is still there. And if the returns make sense, because some of these apartment buildings that are more studio based with a more transient tenant base, you know, they, they don't, they're not, they're probably not going to be there for 10 years.
Speaker: ah Maybe the ROI's work out on that one. Yeah. So Nin, I guess going back to that chart, you're like, as far as timing goes, it seems like it's a combination of racing the demand, but also trying to find the right time to purchase. Where's your kind of head at?
Speaker: Are you just going to keep purchasing you know as you see these deals or you think you're going to pause at some point and wait for kind of the economics to play out? Well, i I want to wait for the incomes to be stabilized at these three current properties.
Speaker: But you know I am looking for these multi units that you see here on screen. And then if the numbers work out, then I will probably move on these multi-units because i the single family home market, I think it's just the numbers don't make sense anymore. Like if you were to ask me, would I pay 650,000 for the Kukunuma home? No, but because my mind is anchored to 330, 340. You know, Sangajaya, if you ask me, would you pay 730,000? go, no, mu because my pricing is anchored at like south of 500. And Ito cost me 130,000.
Speaker: So if you were talking about net ROI basis, so I'll probably exceed 35, 40% on Ito's just short Airbnb rentals alone. Like if we just deleted all my other months and just focused on August, my net ah ROI is like 8%.
Speaker: eight percent so yeah Wait, backing up a sec. So your favorite home was also the cheapest home. ah Yeah. Yeah, exactly. Life lesson there. Yeah, yeah, yeah.
Speaker: Oddly enough, right? But then in terms of like my family as a whole, like if I were to take my parents with me on vacation, with my kids and my wife and her dad or her parents, um the Kukunohuma home would comfortably fit all of us easily. We sleep 15 people and we wouldn't be all on top of each other.
Speaker: um and everyone would have a very large bed, right? um And it's close to stuff to do because, you know, I know my parents, they they actually stay out later than I do, like by 8.30, nine o'clock, like I'm out.
Speaker: But my parents like to go out. They they go do nightlife stuff. And if we were all in Kuganuma, I think as a big family vacation, that would make sense. But if it was if just that said me personally, yeah, I would i like Edo.
Speaker: um I enjoy it. Yeah. That's great that you're building like utility cases for each. You know, I, yeah, again, i've I've been taking care of my parents a lot more too. And just got kind of thinking about like, okay, that's a good house to just bring my parents on vacation stuff like that. That's a good house for me and my wife to retreat to.
Speaker: I do like that kind of idea. And I think that's, that's something I personally want to follow too. Just like what utility and what kind of life benefit am I getting from buying this property? Right.
Speaker: Right. And it gives you optionality. Like you can be there weeks, months at a time and then rent it out and have yourself compensated. You
Speaker: you know, so it's not just sitting there vacant. ah Let me see if I can't share. Hopefully all the pictures are up.
Speaker: Just as a quick ah present something else. Well, you pull that up actually no anecdotally, and we've been seeing this in the data, but we've been seeing like a pretty high uptick on popularity, interest, things are moving off the market faster. I'm just like, you're one of our Aki Amart Power users. Have you been noticed? What have you been noticing? I've noticed things will stay on the market for like 400, 500 days when I first started looking.
Speaker: And then now I i have like my my watch list. And next thing you know, 35 days, it's gone. 30 days, it's gone. huh?
Speaker: but Because in my mind, I'm anchored to that 400 day mark or a hundred days or a very long duration of time. And then I said to myself, I'll let him cook. I don't want to borrow. First of all, it's a couple of things. I don't want to bother Ro as much because I know he's getting busy. I know he's managing things for me as well as not just me, but other people.
Speaker: So I don't just want to randomly send him emails and then I'll say, okay, ahll let me wait a week. See, and then I'll email Ro. Next thing you know, property is gone. And I'm like, okay, they're probably going to put it back on. No, they don't. It's like gone, gone. and So I have noticed that, that yeah know you get to see the data.
Speaker: I only get to see it anecdotally as I'm tracking like the properties I'm looking for. But have you noticed that the days on market are just getting, it's just shrinking. Um, yeah we've only seen anecdote yeah, we haven't done the analysis yet, but I do think it's worth it because we've also seen it anecdotally ourselves. Yeah.
Speaker: At least in Tokyo, Tokyo, Miyoko got a couple hot airs. It's just like sky number of listings and days on market have dropped. And and the price has gotten away from me but for like the past year. So if you look at like Shimo Kitazawa, my kids love it. and They're like, dad, I'm just going to go take the bus to Shimo Kitazawa for a day.
Speaker: And go, okay. So I let them go and, uh, or let them go. They love the area. And I thought, okay, maybe I should get something there. I look at the price line. No, 1.5 million, 800, 900,000. No.
Speaker: numbers probably won't work out. And then we look at Nakano and then Koenji and then Kitakoji and then everything is the price has gotten higher faster.
Speaker: lay it's It's hard to catch it now. So you have to look at something else, you look at something else like a hotel or like like a multi-unit property that is hopefully in a you know airbnbable zone holy um sorry i derailed you what were you no no no so about your whole use case you know about lifestyle so this is our kuganoom home and that you know i'll just kind of thumb through the the pictures real quick this is the dining room and then the photographer did a great job our living room is is much bigger now because if we took away that wall and a lot of this is at sumi's work
Speaker: And then we actually have enough room and they custom built me an desk. So, so off off camera, you don't see it in the frame, but there's the modem and, and, and wifi are like over here somewhere.
Speaker: So now, you know, my kids can myself, my kids, we then put our laptops here. don't need to do work, uh, uh, at our beds. We could just have a dedicated space, um, to do work.
Speaker: That's the master bedroom. You guys did a good job. Photos are great. Yeah. Photos 39 did a great job. I know. um Photos 39. Photos 39. Yeah. Yeah.
Speaker: So this right here, this is one bedroom that has two full beds. This is on the third floor. And the view out this window is beautiful on a sunny day.
Speaker: You know, it's, it's, you can see Enoshima Island. You can see the beach. You see everything, even on the cloudy day, you see everything, but it just doesn't look as nice. Um, there's just other pictures of it.
Speaker: There's a lot of space. So all your properties are up and listed on Airbnb now. Is that right? Not this one. I'm still waiting for the Roku on license on this one. Oh, the photos look good. Okay. So the song and Jaya is up.
Speaker: Is that correct? Yep. Hang on. Jaya is up. Ito's been up and running for the longest of the three. And then I'm still waiting for the license on this one. Okay. There's Anoshima Island, by the way. There's Anoshima Island in the distance.
Speaker: And then the ocean is right here. The pedestrian bridge is really close to the house. Like if I exit my house, you just go to the pedestrian bridge and then that's it. You're at the beach. And the lifestyle here is is so awesome.
Speaker: Um, to Tommy room and they did a great job of, of, of picking the same angle photo and just swapping out the table for the tatami room or for the futons. There's the hello kitty room.
Speaker: And then there's the other bedroom. I know it's different bedroom because the, the AC is over here, but two full beds yeah and a desk. So all these rooms have desks in them because it's an inordinate amount of space for Japanese home.
Speaker: And we are going to link all three of these properties, eventually this third one on on this listing site. We're really proud and that you've gone through this process and absolutely crushed it. A final question for you. If you were to give your advice, you know, someone who's just starting out, listening to this podcast, doing the research, what kind of advice would you give them when searching for property in Japan?
Speaker: Is the timing right? You know, should they go for it? And anything you've you've learned that you want to pass on to the listener. So I think due diligence is very important. um You want to have optionality and to get optionality, in other words,
Speaker: You don't want to be, well, if your goal is just to buy a home and and live there part time or full time, I don't know, but part time, then, you know, find what suits you.
Speaker: Right. But, but for me, i like the greatest amount of optionality in anything I invest in, even if it is for lifestyle. So if I know i can visit Tokyo anytime, stay in Sangajaya, so central that I can get to Shibuya in two stops.
Speaker: I can get to Shijuku in three stops. Like I can get to play, I can take the bus to Shimokitazawa. if I want to, it's so central. um But at the same time, that's a lot of money to spend, you know, $450,000, $500,000 for a home just to give you quote, the option to get to these places quickly.
Speaker: So then the to combat that is you need to be compensated for the cash that's tied up. So Airbnb your home is the next best solution. And then on the days that you or weeks or months that you know, you're going to be there, you just simply block your calendar.
Speaker: Now, not only do you have an income component, you have an appreciation component because the flows, not necessarily the real estate market is hot, but rather the flows coming in from other countries is making the real estate market hot. um And when it compensates you enough,
Speaker: then you can exit. So in two or three years, Ro asked me the same thing because he wants to get an understanding of how long before I start to relist these properties for sale. And you know by the third year, if I can refinance, I don't technically need to sell quickly.
Speaker: But if someone's going to cut me a check for $800,000 property bought 400,000,
Speaker: okay, but why not? that bad um Yeah. yeah And at the time when we walked into the Kuganuma house with the Hello Kitty room, my kids were like, oh my God, this is awesome. They were all in their own rooms, even though each room had like two beds.
Speaker: um My wife casually said, hey, the neighbor is selling for 680. And this other neighbors at a million, in fact, let me, let me scramble that to, I have that here right here.
Speaker: So this is my neighbor in the pink dot that is listing for 643. ah a little further. So that was my neighbor. But if you go into the Minpaku area, so not quite hotel zone, I have a neighbor that is of similar size as my home, but they're asking a cool million.
Speaker: A million. Cool million. A cool million. ah And the house is beautiful, by the way. i think the fit and finish is is beautiful. So this is something that they've lived in. I don't think they rent this out.
Speaker: um And but it's of similar size, you know, you know, 180, 170 square meters, but they're asking a million. Ouch, that doesn't give you much optionality.
Speaker: You know, you might own it, have a great piece of real estate and you Airbnb it. Well, one, you're kind of saddled with 180 days if this is accurate. um And then how much more could that appreciate?
Speaker: I have no clue. You know, you would hopefully the flows coming into Japan still flow, you know. So the advice is just don't buy willy-nilly you want to give yourself the maximum amount of optionality which is high airbnb income or higher and then the ability to exit out you have to ultimately think about exit liquidity who's going to buy this property off you so then i like to buy properties not cheap but like below market and then i'll blink like we did in the past year and prices have gone up 50 to 100 depending on the areas in
Speaker: i in So that gives me options. Like I could sell, I can continue renting, or I can just sit on it and enjoy the properties, which was my original intent. But the other quote options are nice options to have. And I think that's, ah I think as an investor, you need to kind of see all those options and try to buy something or invest in something that has that optionality, you know, like like like in in California,
Speaker: you know, you can't buy a home at these interest rates and quote, rent it out long term anymore. It's just the the numbers don't work out. If you buy a million dollar home in San Jose, California, let's say your mortgage and property taxes will be 8500. And then your rent will probably be like six grand, you're not covering your negatively cash flowing.
Speaker: So then the argument in for real estate investors here, in California is, well, if I buy it, I can carry the losses every month because I have a job.
Speaker: And then I'll just wait for the capital gain at the end. Well, you're bleeding cash though. And, and, and, and what if you lose your job, then that creates another layer of stress for you.
Speaker: so you know, advice to the listeners is just simply, you know, you want the maximum amount of optionality. So you don't have to quote, worry about your investments too much. Yeah.
Speaker: All right. Fantastic answer. I do think a lot of people don't think about the exit plan. A lot of people are thinking vacation home and, you know, one step at a time and, and, you know, talking in that same boat too. We've only recently started thinking about exiting some of our properties. So I think. fantastic answer and definitely something to you know keep in mind keep your options open think about the optionality um because at some point you may want to exit um nin thank you so much uh for joining us on this podcast here thanks for being a wonderful acumart direct customer um i know rio also agrees that you're one of his best customers he's ever had so thank you again and um
Speaker: very excited to see your properties, maybe in person someday too. Yeah, yeah, yeah, yeah, yeah. Thank you. Thank you. All right. Have a good one then. Yeah. Thank you.
Speaker: Thanks for listening to this week's episode of Buying a House in Japan. If you find the show helpful or at least entertaining, give us a five-star rating. Takes five seconds and really goes a long way. If you or someone you know is looking for a Japanese home, check out Akiyamart.com, our English-friendly site that lets you browse over half a million listings.
Speaker: That's A-K-I-Y-A-M-A-R-T.com to find your dream home in Japan. If you've got questions or feedback, drop us a line, email contact at akiamart.com.
Speaker: You can also find us on Instagram as well as TikTok, where we post properties, tips on the home buying process, and updates on our own purchases and renovations. Thanks again for listening, and we'll see you next week.
