Transcript
Speaker: Welcome back, everybody, to another exciting episode of Buying a House in Japan podcast. I'm your host, Joey. Today, not joined by Take. This is my first solo episode, but we are joined by an exciting guest, Tsuyoshi Domoto. Yoshi is a Japanese founder and entrepreneur. I met him here in Tokyo. He's actually staying with me in our Beppu house for the past three days.
Speaker: He is a Harvard graduate, a world traveler, He's an international kid, been brought up in school systems around the world. He's a coffee bean expert, been living with coffee growers in Honduras for two years, ripping through the Honduras jungle on his motorcycle. More recently, he's turned his attention towards his home country, Japan, and its real estate market.
Speaker: His business is called Akia Air, and recently he's partnered with us as one of our Akiamart preferred agents and also as a post-purchase partner focused on renovation coordination and managing renovations.
Speaker: Yoshi, welcome. Thank you so much, Joanne, for that flattering, flattering intro. don't know if I can live up to that, but ah but I'll try, man. I'll try. Yeah. Let's hear 30 second recap of your life and how you got to where you are right now.
Speaker: Oh boy. 30 seconds. Okay. I'm going to try my best. i mean what it you know Born in Sapporo. That's up in the North, big Island Hokkaido. Raised in Taiwan, Hong Kong, and South Korea.
Speaker: Attended um international schools throughout my whole life. Went to the U.S. for college, decided to jump into the world of finance. Didn't really enjoy that, so quit after two years. And I moved to ah Honduras, where I'd worked with small-scale coffee farmers, helped them export their coli beans to the U.S., did a lot of trips to the East Coast, West Coast.
Speaker: Really loved those two years of my life. But then I got into education. I was working in the ed tech world for a while and then jumped into sustainability consulting. i told people I have career ADHD.
Speaker: I can't focus on one thing. After a couple of years or so, my attention shifts. But most recently, my passion has been in Nakia. So last year, I took a six-month career break, which is pretty much like career suicide here in Japan. That's decided to go to Bali, Indonesia to attend this programming bootcamp called Lewagon. It was a bootcamp for entrepreneurs. so And around the same time, like CNN released this article that said Japan has a huge like reverse housing crisis. There's 9 million abandoned homes.
Speaker: So I asked my digital nomad friends and fellow entrepreneurs who were attending the bootcamp. I was like, hey guys, if you could buy a home in Japan for very cheap, would you be interested? And many of them actually raised their hand and were like, Yoshi, I want a house, i want a house, i want a house.
Speaker: So that really led me to this journey right now of launching AkiAir. Through our chats over these past three days, you mentioned that the recurring element through your life has been, whether it's philanthropy or you first went to Honduras working for the United Nations and give back to the world in some way, that sort of element of your life and that driving force, is that what brought you back to focus on Japan and the problems in the housing market here?
Speaker: To be honest, I got to say that right now I'm really doing this just because I really think it's fun. It's just really cool. I think previously, especially when I was working in finance and stuff, I was just trying to fulfill my parents' expectations of what I should be doing as a quote unquote, like good son, especially because they spent a fortune sending me to university and also grad school in the US.
Speaker: But I was truly unhappy. I was working for this band called J.P. Morgan. Okay. This band band. Yeah, it was. And um I was in the um operations division. Where was this?
Speaker: This was in Marunouchi. So this was in the heart of Tokyo. Okay. So J.P. Morgan operates in Japan? There's an office in Tokyo. But to be honest, a lot of paper shuffling. Just a lot of paper shuffling.
Speaker: but So you quit finance and Honduras was the next move, if I remember correctly. Definitely you went against your parents' wishes there. Honduras, I believe, is one of the most dangerous places to live. Exactly. You know, I didn't even tell my parents.
Speaker: I quit my job first. And then my parents were living in Seoul, South Korea at the time. I visited them. I was like, guys, ah big news. I'm really sorry, but I just quit my job at the bank and I'm going to be moving to Honduras. And they were like, what? Like, where the hell is that, first of all?
Speaker: Did you apply for this job? Or like how did you know that you had a job waiting for you in Honduras? like In college, I did a bunch of random internships. And i also studied abroad in Cape Town, South Africa.
Speaker: And it was in Cape Town when I met this guy called Mike. And we became friends. We hung out a lot in Cape Town. And we connected over Facebook. And I just kept on seeing his stories pop up every now and then. he was just having a blast riding around on his motorcycle, like talking to farmers, like drinking great coffee, hanging out with Honduran ladies. And i was like, this is the life I want. So I knew where I wanted to escape to after I left finance. And I reached out to the guys at Aldea Development and was like, hey guys, do you have a job for me? and they were like...
Speaker: If you want to start off as an intern, sure. So I started off as an intern just grinding out coffee beans for the first six months. If you travel all the way to Honduras, we will give you a job. Exactly. Yeah. If you're that committed, then yeah, sure. I mentioned this to you earlier, but I read Mosquito Coast. They made a movie about it with Harrison Ford. Lots of bad guys in that movie with guns and that kind of stuff. So I was curious about Honduras after I read that book and i went on Google Street and I was looking at, don't know, restaurants and bars there. And I was like, wow, this looks sketchy. Yeah, yeah, yeah, yeah.
Speaker: It's a wild west man in Honduras. Like people walk around, guns in their belts. There were some shootings in my local town as well. It was scary at times, i'm not going to lie. One thing I want to get into that is really exciting that you mentioned to me is buying Japanese businesses.
Speaker: As I mentioned earlier, Yoshi is the founder Akia Air. And one thing that he is interested in directing the business towards in the future is buying Japanese businesses. So I'll let you explain. But like Akia's in Japan, there's a lot of potentially cheap businesses. Is that the right thing to say? Exactly, exactly. The roots of the problem is very similar to Akiya's.
Speaker: You have demographic decline, especially in these rural prefectures. Not enough young people to take on the family business. So many actually profitable traditional Japanese businesses are unfortunately profitable.
Speaker: going out of business because there's no successors. The son or daughter is out in Tokyo or Osaka, and they have a nice fancy job, and they don't want to move back to the countryside where their parents or grandparents are at. So due to a lack of successors, they just go out of business. As a local Japanese person, i just feel that's really unfortunate.
Speaker: And if local people don't want to buy, why don't we make that market more accessible to foreigners? What type of businesses are we talking about here, like laundromats or restaurants B2B SaaS companies? or like What sort of businesses do we mean? These are, i would say, more traditional businesses.
Speaker: Sake breweries, right? Logging companies, any sort of industry in rural Japan. You're right that these businesses are likely profitable. One business we mentioned on an earlier podcast episode, but I'll fill you in, Yoshi.
Speaker: Take and I went on a trip to Kitakyushu. We stopped for lunch halfway between Beppo and Kitakyushu in a small town called Nakatsu. And we got okonomiyaki at this old kind of like Showa looking restaurant, not made to look Showa era, but like literally probably hadn't been updated since then. Grandma was cooking and it was 200 yen per okonomiyaki.
Speaker: And the restaurant was half full. So like if a business has been going on for this long, I don't know how much profit they're making, but clearly is profitable enough to operate. And this grandma that was cooking and managing everything in the restaurant, she seemed quite old to me.
Speaker: How much longer is this business going to be operating? Exactly. as Especially SMEs, smaller and medium-sized enterprises. There's a lot of potential there because all the big P companies, they're probably not looking at that.
Speaker: They're looking at much larger companies that are either listed or have a bigger or better brand name. But for smaller companies in the countryside that no one has really heard of, I really think that's just a matter of better marketing, better operations, especially by including tech, making things a lot more efficient. You can definitely raise the profitability margin. Same example in Nakatsu, we were doing something on our phones, me and Take, and then she asked us, how did you find this place? And we're like, oh, just Google Maps. And she was like, oh, is that the internet? And we're like, yeah, that's the internet. And she's like, oh, I don't do the internet kind of thing. Yeah, yeah, yeah, yeah.
Speaker: That's so cute. One more exciting thing that we've talked about before on the podcast is maybe you buy on Aki in Japan, you renovate it you try to turn it into an Airbnb and get a business manager visa that way. little bit of a stretch. Obviously, there's no guarantee of any type of immigration status just because you buy property in Japan.
Speaker: But if you buy a business in Japan that's already operating profitably, Yoshi, what do you think? There might be a better chance at getting some sort of immigration status that way. Don't quote me on this. I'm not an expert or anything. But I do think that if you have some sort of history, like say you buy a sake brewing company that has been in existence for like, say, 40 years or so, I think that will definitely help you in increasing the likelihood of the Japanese government sponsoring a visa or allowing you to apply and receive that visa.
Speaker: And also like when you do B2B with other Japanese companies as well, they sometimes look at your corporate history. Hey, how long have you guys been around? And if you're able to say, oh, we've been around since Showa, like 20. Even though you just bought the business last month. That still builds like legitimacy. And you're also really giving back to these rural communities because there's a much stronger sense of social bond that exists in these rural communities.
Speaker: And people don't want to easily just fire people. So if you're there as a new owner, if you're able to protect their employment and allow all these businesses to really globalize and raise profit margins, I think you're doing a service to these communities.
Speaker: If I wanted to buy a sake brewery, let's say countryside, Doinaka, do you have a ballpark number in mind? It's hard to say, but I have read news reports where people are actually just giving out their businesses for free.
Speaker: And like I said, it's because people want a new owner who would help them maintain these businesses. It's about preservation. It's not about them wanting to make this big sell and really cash out and become a millionaire. No, no, no. It's about continuation and really protecting that community. I have... 1994 forerunner in Canada. And I really love this car, but like on the market, it's not worth as much as I evaluate. So I would rather give it to someone that, you know, they want to just keep it running kind of thing, but almost for free more than the whatever $2,000 I could get by selling someone that's going to scrap it for parts. Exactly. Exactly, man.
Speaker: And the future of Japan is really about Japan ex-global. I don't think that Japan is going to be able to survive just leveraging our own strength. As everybody who's listening to this podcast knows, our population is declining year on year. And some people say that in another like several hundred years, we might see the last Japanese person standing. So that's really sad to think about, it but it is a reality. So if we don't allow increased immigration, allow people to come into this country, open up our borders and globalize our businesses, we might just become extinct.
Speaker: Do you think that Japan has no choice or do you think that there's any way that Japan could come out of this economic slump, population slump without letting in immigrants? Yeah, I really think it's just a matter of basic economics. If you're thinking of starting a family, you want to be able to support that family.
Speaker: And especially with real wage growth being pretty much non-existent over the past 20, 30 years, I think people in my generation, so guys who are in their 30s, they just don't have that confidence of being able to get married and support a family.
Speaker: Yes, a lot of the women are now working and there's double income households, but even then you're not making enough to be able to support yourself plus a kid or two. So it's just really basic economics that's causing the current situation in Japan. So for me, unless we radically transform our economy, which I don't think will happen, we'll just have to open up our borders.
Speaker: Personally, I have a lot to rant about with Japanese banks and finance and setting up my own business here. And I see that as symbolic of the greater economy. It's really difficult to break into the Japanese economy, to get a bank account for your business, to sign up for anything with your business. There's like the big five banks here.
Speaker: I don't know how many there are that keep out startups and competition. And I bet that is a problem in many different sectors in the economy. And to change that, both are hard things. sells to the Japanese population, I believe, increase immigration, or maybe it's not a hard sell to break up these large companies in Japan, but the revolving door of politics to the private sector, also politically difficult.
Speaker: Yeah, the system is really rigged, especially against small guys like us, you know, politics is in bed with big business. And it's really structured in a way to protect the interests of big business, whether it be real estate or finance or whatnot.
Speaker: So I think Japan is definitely ripe for disruption. And I think it's really cool what you guys are doing here at Akiyamart. And if there's any way that Akiyamart contributes, would great. Shifting over to your business, Akiyamart, a lot of foreign entrepreneurs in Japan complain about getting bank accounts and breaking in.
Speaker: Did you, as a Japanese national, did you find it difficult to start up your business here? Obviously, we don't. face the same hurdles that a lot of foreigners do when setting up a business, but it's still not a one-click type of situation. There's a lot of physical going to the local office type of things that we got to do that it's still very annoying. So compared to all other more efficient countries like say Singapore, Japan, it's still very much behind.
Speaker: Just a couple weeks ago, I had to change the members of my board And I had to physically go to the Shinjuku office, pay for this little slant stamp, pay ichi mai yen, so that's 10,000 yen, and just hand the paperwork in physically to do that.
Speaker: Like, it's not a one-click solution that I can apply online. So even for Japanese people, it's still quite cumbersome to start businesses and to operate them. So hopefully the Japanese government's listening to this and they do something about it.
Speaker: Tell me more about aa Air. Yeah, so with Akia Air, our focus is we want to become the on-the-ground support for people who want to renovate, manage, and eventually monetize their properties.
Speaker: I think that's why our partnership really makes sense because you guys have a fantastic top-of-the-end funnel. but We get clients from all over the world. And if we can help Akiyamark with everything that happens on the ground here in Japan, and when it comes to helping you find the best architects, designers, project managers for the reconstruction, for the renovation work, and then you manage your property when you're not here, like when you're back in the States, for example, you need someone to rent your property.
Speaker: And ultimately, for some people, they want to just put their property up on Airbnb or booking.com and have people market it and brand it so that they can make a nice, stable side income. And that's That's all possible here in Japan, especially if you get the right sort of licenses. So we want to focus on being a one-stop shop that supports foreigners to do that.
Speaker: You've seen mine and Take's successes and failures trying to renovate the Beppu house here. People that are aware of the Satosan saga, it's very easy to find a contractor like Satosan and then be happy with the result but not too happy with the result.
Speaker: renovation can get out of hand quickly. But if you had like a nice website, almost like choose your Pokemon, right? Limit the options. Like I only do these three flooring types, these three wallpaper types. Am I off the mark here or what do you think?
Speaker: Ooh, whoa, I love that, Joey. the sort of japan-di contemporary japanese style is the in thing right now especially that muji house style like so popular right now yeah so i think if it's based off of that and then we just simplify that process for people i think we're actually doing a service because then we can also talk to the best contractors who have executed well in the past and just rely on them they know what we want and they know what the client wants So they'll probably do a much better and better job.
Speaker: If I saw that service, I would be very excited about that. Like within the Japandi or Muji, it's all going to work well, you know, because someone had thought out these designs. I think that's really cool.
Speaker: One issue I foresee, and maybe this isn't something that you have exactly solved yet, but I'd love to hear your opinion on it. You're mentioning you work with the same contractor, they get better and better at it.
Speaker: But when you're trying to manage property renovations all across Japan, right? Difficult to have consistent contractors, I think. Have you thought about figuring out some sort of network of contractors or what are your thoughts there?
Speaker: That's a great question. I think that we'll probably have to do a lot of testing in the beginning where we work with different contractors in a specific prefecture because they usually have like prefectural coverage.
Speaker: They might not have national coverage. Like somebody who's based in Hokkaido might not be able to fly all the way down to Okinawa or They obviously use different materials. So I think we're going to have to divide it by prefecture or by region even.
Speaker: Kanto, Tohoku, right? And find trusted contractors that we can rely on. And then every time somebody wants construction work, renovation work for that specific region, then there is like a nice list of four or five people that we can always go to. I think that's where we want to yeah go head towards.
Speaker: but So what about post-purchase, setting up utilities, that internet? You also handle that, correct? Yeah, exactly. Exactly. That's another pain point for a lot of people. You got to call up these gas companies, electricity companies, water companies. And yeah, we step in there. We do everything for you so that by the time you arrive in your new property, everything is set up.
Speaker: Maybe except for gas, because you have to be there in person to set that up. But everything else will be set up for you. How can we like give people that six star, 11 star experience? We were talking about that a couple of days ago.
Speaker: And I think that when someone arrives at their new property, if all the utilities are already set up, they come into a warm house in winter, maybe like a nice sushi meal on the table, and the onsen is already filled out with warm water, like then people were like, oh, it was totally worth it to buy a house in Japan. yeah yeah yeah That's really a six-star customer experience type of deal. And it'll be amazing if we can provide that.
Speaker: I think I told you the story, but I'll tell it again really quickly just in case I didn't. When Taki and I first bought this house, it was like a nine-hour road trip day. I think there was like two or three of those in a row. We got here at midnight. The lights were like flickering kind of thing.
Speaker: This house had a weird smell. And like... Basically, I walked away that night. We went back to the hotel and me and Takahita, we didn't really talk yeah much after that. we were both lost in our own thoughts. of feeling I remember feeling, oh, we made a mistake. like This actually is a junker house. But like you said, if you can fix that initial impression for the client, they're buying in the winter, having the kerosene heater, like all they got to do is turn it on.
Speaker: Exactly. When we purchased our Tokyo property, we had learned a little bit and we got an AC installed before we showed up so we could warm up the house as soon as we got there. Having the house deep clean before you get there, we were afraid of bedbugs and the tatami mats.
Speaker: Those type of things do go a long way. And i was guilty of a little bit of panic, stressing out Ziv when we first got to this house. The gas wasn't turned on, so there was no hot water. And so like I'm calling Ziv. It was like a sad story, Ziv, if you listen to this. But it was like...
Speaker: Showed up to the house the next day. it was like a Saturday. day Hot water is not working. We're like, oh, no, the utilities aren't on. But I've learned that's normal. And I think because gas does need to be, a person needs to be there. Maybe it's just messaging to the client. But I do think you're on the right track. There's a way to push the experience into the six-star territory.
Speaker: That's right, man. For some people, it's a dream. They've been planning this for like years. And for things to get off on that wrong foot, I don't really wish that for anyone. At the moment, until Yoshi gets his six star experience up, it probably will feel a little bit like camping. Our friend Eric has been on the podcast before we helped him buy a Niigata. He actually had a wonderful experience. He bought a little bit of a newer home though.
Speaker: So his house was clean, ready to go. He slept there the first night. Taki and I definitely did not sleep in ours the first night. So yeah, a little bit of an adventure still. I love what you guys have done with it here, man. I've been staying here for a couple nights now and well, super chill place. Really, really impressive. I love the second floor. And yeah, I've been able to get my peaceful sleep over the past three days. So thank you, Joey. Thinking about the room we're in right now, Yoshi, if you actually take a closer look at the wallpaper, it's unfortunately sparkly.
Speaker: So I picked these and this goes back out to our like choose your Pokemon, you know, one of three options. Sato-san, our contractor here in Beppu, he gave me like, it was a stack. about maybe a foot and a half tall of catalogs for you know flooring, wallpaper, too many options. I put it off, I put it off, and he kept asking me like, hey, I'm ready to order the flooring, I'm ready to order the wallpaper, which one you want? And Take wasn't here at that time, I'm trying to like FaceTime, Take's just handle it, man, like I trust you. So I picked one I thought was like a light gray. right So we had stayed at a hotel in Hyogo Prefecture that we thought had good design, and the wallpaper was a gray.
Speaker: And the flooring was not quite the color it is now, a little bit of a warmer yellow. But I tried to pick those things from the catalog. And it turned out that I picked like a sparkly princess room kind of wallpaper. So it's not easy to buy the right stuff. It's choice overload. Exactly. Didn't notice the sparkles. And maybe I didn't read the fine print.
Speaker: Yeah, no, some little girls wouldn't even like this room, so don't worry about it.
Speaker: But yeah, i do just going back to the Muji or Japandi, like having someone pre-choose the options for you and then give you a limited selection within a well-curated set, yeah I think is great idea. And my princess house could have been avoided. Yeah.
Speaker: That's way to go. Anything you think is an absolute necessity to renovate if someone's buying an abandoned home in Japan, some things for me that come to mind is if you have the ability to put insulation in the walls, do it. These houses are cold in the winter and hot in the summer.
Speaker: We were just exploring double glazing, double painting the windows, getting an AC unit in. Anything you think that people should do? That's the thing with houses in Japan, you know, we have all four seasons, which is fantastic.
Speaker: But at the same time, that i feel like the houses aren't really built to tolerate the changing of all four seasons. I'll go downstairs in the morning and it's so cold. Most days, it's either very cold or very hot. And then I look at my elderly neighbors who haven't done any renovation to their homes probably since they were built. And I'm thinking like, how are they living in there? Are they just like freezing and hot all the time? Or like, how is a Japanese person living in these types of homes? That really brings me back memories of my grandparents' house in Osaka, where, yeah, in the winter, it was cold, super chilly, and then summers, it was hot.
Speaker: I think people just fared through it. There are people from the show era. Built different. yeah Yeah, life was tough back then. And they were like, hey, we could only afford to build these very compact, cheaper houses. And that was that. Like, they didn't really have a choice. But then, you know, I do remember...
Speaker: having a nice kotatsu or like a nice little kerosene heater in the center of the living room where all the family members would gather together and it did foster a very homey environment which i really really liked so it does have its pros and cons yeah you know staying in one room at a time heating one room at a time closing all the doors my neighbor in tama hara-san I remember this past summer when I was there, it was so hot. I went into the smallest room in the house that had the AC, cranked the AC, closed all the doors.
Speaker: But I noticed, I look over at his house, he's got the windows open. And I'm thinking, oh my gosh, it's 40 degrees Celsius outside and humid. And he's got the windows open. I can't imagine.
Speaker: Switching gears to Beppu. What do you think of Beppu real quick? Dude, I've really enjoyed my time in Beppu. You know, in Tokyo, the pace of life is just so much faster. You get pushed around on the trains. I was carrying a lot of stress, but we hit onsen like every single night I was here.
Speaker: And I just feel a lot more relaxed, a lot more chill. I'm really falling in love with Beppu. I think I may be coming back here a couple of times a year now going forward. So thanks again to... Heck yeah. You're very welcome to stay here anytime you want, Yoshi. In fact, we need somebody stay here because this house is abandoned for most of the year while me and Taki are not here. Thanks for coming on the pod, Yoshi. Wish you best of luck with Akiya Air and I'll see you again in Tokyo.
Speaker: Yeah, man. I can't wait to put this up on Airbnb. Like I said, this is going to be a really special state for a lot of people. So let's get this house up and running, man. Let's do
