Transcript
Speaker: We didn't say anything weird in the letter. It was just basically a letter of gratitude to the landlord. And we slipped in a $20 Starbucks gift card. It's not trying to be a bribe. It's really just like, Hey, we're really happy to, you know, have this opportunity. Um, and we want to start the relationship on an off on a good foot, like here, go get some coffee. So we sent that.
Speaker: And i think maybe we didn't hear back for, Two weeks, three weeks, we got a reply back from the seller. I just kind of skimmed it in Japanese. So maybe I, my Japanese is bad, but basically he just rejected us. He was just like, Nope. Um, sorry guys, not going extend the lease to you.
Speaker: And he returned the Starbucks gift card.
Speaker: Welcome back to the buying a house in Japan podcast. Let's go. We got an exciting episode today. Joined today by Stocks Rocky and KBZ Ryan Kubo Zono, representative director for Takamori KK, our Japanese company. How are you boys doing today?
Speaker: Yeah, pretty good. ah early for me, a little bit cold, but the earthquake's been freaking me out. you Sorry, it's like 3 a.m. for Ryan. sorry's It's 5 now, but you know, ah recently there's been some shaking in Aomori and then there was a few quakes yesterday Ibaraki, so I don't know, something's coming. Something might not be coming, but it's it's one of those times where we're all just like, ah hopefully nothing big happens. They say that like after a big one,
Speaker: the chance of like a subsequent large earthquake increases by, i don't know what it is, two two percentage points or something like that. So it does increase, but, you know, i don't know. You'd have to, I don't know if it increases by that much. I was reading an article the other day. They say it does increase, but like 2%. Hopefully nothing big.
Speaker: Are you afraid of earthquakes, Ryan? living Yeah, I mean, you know I didn't grow up In Japan. You grew in California. We got earthquakes all over. But it hardly happened. And then it shook once and that freaked me out. But then i came back at the end of 2010. And then, you know, the first earthquake experience for me was 311. So that pretty much, yeah, set the standard for what Japan and earthquake is like. So I'm pretty traumatized by that.
Speaker: Okay, for the listener, Ryan, give us a quick re-intro. you This is our second time on the podcast. We've mentioned you a couple times, but who are you and how what are you what are you working on with us? Sure, yes. So Ryan here, and just as a quick background again, not to duplicate what I mentioned before, but ah born in Japan, but raised in the Bay Area.
Speaker: So some overlap with Taki in terms of the communities that we're involved in, but we never really got ah involved until we met up through LinkedIn in 2023. And then that's when Akiyama was really picking up.
Speaker: And for me, i started my own sole proprietorship at that time. Aki Amart was not and picking up in 2023, by the way. Ryan is very early to the scene. um but You were putting it into action at that point in time, right? So I think it's a lot of the the planning. ryan Ryan sees the future. He saw the potential. He's got that investor mindset. 2023, we were very, very small. We're still kind of small. But um yeah, we met Ryan basically in the infancy of our business. And then I guess through LinkedIn, And then we met up in person at at like a real estate summit.
Speaker: Yes, the one that Ziv hosts. And then that's when everything kicked off. And then for me, it's been interesting to be involved in this space. It's completely new for me. And then coming Takamori, obviously I'm the one in Japan, so oh hopefully I can give a little bit more perspective to the team. And for me, it's important to have the cultural awareness as well as being a little bit more focused on the numbers.
Speaker: Joey and Take obviously are are the drivers of the business, so they're focused on generating more revenue, bringing in different types of relationships so i'm hopefully in the back end supporting all of that going forward sorry and but before i cut you off there you do financial planning mostly for is it uh american people going between america and japan or have finances between america and japan That would be the largest population, but it doesn't have to be limited to Americans. A lot of Americans just get caught up with all sorts of issues or considerations because of the the the tax on citizenship.
Speaker: Usually it's tax on residency. So most countries, once you leave that country, they won't follow you. But the U.S. s does. The IRS does. It is what it is. And then basically for me, a lot of times there's cultural differences or differences.
Speaker: uh in i guess uh multinational considerations so they have different assets in different countries different family members in different countries so what does that all mean people come to japan thinking they'll be here for ah few years and end up just staying here for a long time or even forever so a lot of times that is what drives these conversations right We're really the irresponsible, like move fast, break things, me and Joey. And Ryan's the guy who's like making sure were we're we're operationally doing things and and looking out for our numbers. So Ryan, thanks for joining on board on TKK, our Takamori C-Corp equivalent.
Speaker: You've been a huge help this year thus far. We've thrown you into many fires thus far. And the the biggest one yet is our coin laundry business that we...
Speaker: Big update. Yeah. Hit it, hit it, Joey. Hit the update. I mean, it's not a mite. Like there's no mite here. yeah yeah yeah Oh, well, actually there are some Hail Marys, but I don't think we're going to do the Hail Marys, but big update. Um, the coin laundry purchase has fallen through and, uh,
Speaker: nice nice work um yeah we will not be able to buy this coin laundry that dream is effectively uh gone for this particular coin laundry um it's been about i don't know how long since we started this at least summer time maybe six months we've been pursuing this and Yeah, we kind of, we'll get into the full story, but I think, yeah, about a six, like very long time, first of all, to purchase this laundromat. A long, long, long story here. But yeah, effectively donezo.
Speaker: To rewind the clock a little bit. um Yeah, Joey and I, we have been, if you've is your first episode. Joey and I are the co-founders of a website called Akimart. We've been helping people find some of these cheap homes in Japan and also help purchase.
Speaker: Along the way, we have purchased six properties and we had decided, let's try something different. So Joey was particularly really interested in the cash businesses. So we started going down the route of, hey, how can we buy a business.
Speaker: ah One thing had led to the next and we had found a coin laundry business in Thomas city, about six minute drive from our house. And we're like, Hmm, stars are aligning, uh, in a weird way too. We had actually made a t-shirt design with a coin laundry as the icon. And we had not yet even thought about getting the coin laundry business. And we kind of were just like, oh man, this this is aligned. Let's go for it. So we we tapped in Ryan here to be like, Ryan, we need you to quarterback this deal.
Speaker: um Very challenging, Ryan. First impressions on, you know, you've we've we've thrown you in there. You've really been the one talking to the stakeholders and whatnot. But um give us some context on the coin laundry business purchase.
Speaker: Sure. So first of all, I think the part that was really smooth was dealing with the intermediary on r end or the seller's end, meaning the business itself was ready to be sold and a lot of information has been provided there, which is smooth.
Speaker: The issue that we basically faced was regarding the landlord because the the laundromat is essentially a tenant of a property, first floor of an apartment building.
Speaker: ah basically as the new owners, since we're not buying the business, but we're just basically buying the assets. Well, we are buying the business, but not in a shape of company. Basically, we had to go through the the same process as basically reapplying as a tenant and The issue really is with the landlord and also the management company, the real estate management company, they they just seem to take a really long time.
Speaker: And again, just to remind the the listeners, initially there was a different party that put in their offer. Their discussion basically did not go through or the the deal did not go through because the landlord ultimately presented different conditions in terms of the rent, in terms of the lease period.
Speaker: But ultimately that... I forgot about that. hes so He switched it up on them. That's right. That response took a month and a half. So we were already told... going into this deal that potentially this landlord could be a little bit slower and that little bit slower ended up being two whole months essentially. So we put in the letter of intent and basically silence for two months only to be rejected. So it was really just painful waiting and waiting and waiting. And this landlord kept on bringing up very interesting ah details. And part of it was, oh, we can't, I'm very busy or I have some medical emergencies within the family. So they just kept on being excuses provided to us that did not seem to make sense. And we just never really got a good sense of the landlord. Even if we were to be
Speaker: allowed to operate. And I think there were signs showing already that ah there could be some trouble ahead.
Speaker: Do you think they sniffed out that we were foreigners? I mean, we had a very Japanese facing everything, but I'm i'm curious, Ryan, what are some of your ah hypotheses of of what what went down?
Speaker: i'm honest I'm not sure what what the the factors could have been because this is just seems to be such an unusual case. And yeah, it's very hard for me to say what factor or what order of those factors really led to this deal not going through.
Speaker: Joey, what was the straw on the camel's back here? I think that's what you're going to say. Yeah, exactly. So I want to address this. But first, I just want to say, so i'm checking the emails between us. And again, there's some i'm confusion over the intermediary. Is it this company, Mirai Z? Is it Meow GK? There's like but maybe a few few intermediaries here. The first email I can see, either between Meow GK or Mirai Z, is September 8, 2025.
Speaker: twenty twenty five Does that sound right, guys, when we kind of started? pushing harder early. That was once we moved the conversation off of Trampy. So we did have some exchanges prior to that.
Speaker: Right. Okay. So let's say maybe August or late July was probably when we decided to get serious about this. So just putting it in context, we are talking now mid December. So like really it's been about five months. Um, I would say,
Speaker: Between getting serious. And for the who are the players? So there's going to be us. So we, again, are trying to purchase this with our Japanese C Corp equivalent, where we have Ryan being the face of the business. Again, we wanted to be as Japanese-seeming as possible. We had our headquarters base in Tama, which is also a huge plus that we had learned when purchasing the offer, or purchasing, putting in the offer. Being local, yeah. They mentioned that. They're like, oh, good that you guys are local. Like, that's a good thing.
Speaker: Just FYI for anyone purchasing small businesses in the future. We also had the seller, so the owner of that business. This owner basically was just owning the lease, like the the rental rights and also the machines and had been operating. He was an elderly man. I think that just wanted to exit because he had no successor.
Speaker: We also had an intermediary, so kind of like a facilitating company, which Joey mentioned. They're called Meow GK or Mirai's. They seem to be like an M&A coin laundry business facilitator, right?
Speaker: I think they're the same person, but two businesses. And I don't fully understand the the breakup there, but essentially that's the intermediary side of stuff. We kept calling them Meow GK. Sometimes they're called Mirai Z. We don't know.
Speaker: And then we also had the landlord, so who was the building owner. So imagine the building was like a condo unit and then the bottom floor was the coin laundry business.
Speaker: Was there also one more guarantor company, Ryan, that I'm missing? There is guarantor company, but that's tied to having the tenant agreement. So that's kind of separate. they They basically do a background check to make sure that we have the financial capability to pay and Of course, they pay the landlord in case we we are not able to pay the rent. But basically the other party, the the the the one that is the bottleneck was the landlord side.
Speaker: So the landlord plus the the the management company. Okay. And the very last two players we had just going to, as we mentioned, we have Linda, who is our property manager of one of our houses, who is going to be the operations manager. We even made business cards. And lastly, we had hired a lawyer to go over some due diligence on the legal documents. So kind of a little bit more complicated once we put all the players on the table. Yeah, we had a team. We were quite serious about this. we were you know We had a game plan on how to like understand how to run this. But all right, guys, let's get into the juicy part of this conversation. the reason why, but not the reason why, but as Taki mentioned, the straw that broke the camel's back, the kind of exciting
Speaker: juicy parts of this story We, again, that's all basically everything we've set up till now has been context behind this. This process was dragging on for months and we decided to take action and we busted out of our toolkit, a little tool that we've used before in the Akiya space.
Speaker: Maybe it worked. I've heard good things about this, but basically you write a letter to the seller. If you're trying to buy a house, you write a handwritten letter to the seller of the house saying like, you know, all the reasons why you love the house, how you're going to take care of it, et cetera, et cetera, et cetera. And I've been told you know by several people in the real estate space in Japan that this really works. This goes far, especially if they're elderly. It goes like you know it goes a long way. A handwritten letter expressing your intent and and why you're so excited and why you're so grateful.
Speaker: We decided to do that and send one to the seller. So we wrote, we we we asked um someone that we're working with, ah this Japanese woman with good handwriting. A lot of people commented her handwriting. Excellent handwriting, right? right So she wrote us this letter to the landlord and literally there's nothing bad in this letter. we we basically said things like, we're so excited. We're so grateful. We're going to be excellent tenants. Like you don't have to worry about the rent being paid on time. Like all this kind of stuff, you know, maybe kind of fluff stuff that you would tell a landlord. We just wrote that we didn't put anything like,
Speaker: We didn't say anything weird in the letter. It was just basically a letter of gratitude to the landlord. And we slipped in a $20 Starbucks gift card. Um, that's maybe the little bit more risky point. And we can talk about that in a second, but anyways, it's not trying to be a bribe. It's really just like, Hey, we're really happy to, you know, have this opportunity. Um, and we want to start the relationship on an off on a good foot. Like here, go get some coffee.
Speaker: Um, so we sent that and i think maybe we didn't hear back for two weeks, three weeks. Um, and then Linda, who is property manager of our place in Tama, she, she checks the mail for us. She went through the mailbox. We got a reply back from the seller. I didn't really chat to you. I just kind of skimmed it in Japanese. So maybe I, my Japanese is bad, but basically he just rejected us. He was just like, Nope. Um, sorry guys, not going extend the lease to you.
Speaker: And he returned the Starbucks gift card. Ryan, you actually read the letter in Japanese. do you remember anything else from the letter? It was, first of all, the letter came from not the landlord himself, but from the management company. And they basically informed us, like you mentioned, that we're not accepted as a tenant. And then it also told us to refrain reaching out to the landlord directly. it...
Speaker: appears that the landlord was not happy with this. And then that trickled down into, i guess, some feedback to Meow, the intermediary on our side, because we never really disclosed that it was our intention to reach out to the landlord directly. So that it was a lot of emotions from both parties. And you know obviously, we expressed our frustration with the situation that the landlord kept on giving us these types of responses that were I would say that if you were really trying to conduct business, those things shouldn't be stopping you. So I think we did have some frustration on our end in terms of how slow things were moving and how slow the response was. So I felt that it was fair for us to take action on our end.
Speaker: But overall, it didn't really go well. It didn't sit well with the landlord at least. And then those ah types of feedback were provided to us. Learning moment on our side, though. we know Next time, we should probably communicate with MeowGK that, hey, we're going to send this letter. They probably would have said no, to be very honest, though, too.
Speaker: um But unfortunately, damn, the deal is done, right? Deal is done, but let's, let's talk about the land. Postmore. Postmore. There we Here we talk about the landlord as a person for a second here. Cause I think this is the, maybe the, the, the wildest part of the story. Let's about the landlord as a person, not the intermediate company. So first of all, he gets a letter maybe unexpectedly with just all this good stuff in it. Like, Hey, we're so grateful to have this opportunity to rent. your, your space. Um, and he gets mad upset enough that one, he says, no, I'm not going to lease to these people. And then two, he makes the company or his, to his real estate company say, Hey, you can't reach out to this big boss man directly. Like this guy's a big shot, shot show, right? Uh, like no one you got to go through my minions first. Right. It's, I feel like this is just kind of the energy that this person is giving off. All right. Like, are you guys on this?
Speaker: on the same page as me there or? Also on the flip side, you know, I have rentals. I i don't want to be contacted by guests, you know? So there's a reason that this landlord has this management company. So I think it is on on on his side. It's like the management company should have escalated to him versus this wild, wild west method of just receiving a gift card in the mail. So I see his side, but ultimately we dodged a huge bullet.
Speaker: Definitely. Like if we had to continue to deal with this kind of energy with the landlord for renovation, or yeah if we threw a party or we just did something a little bit different, I think we would have expected the same type of response. And it would have just been like, we are contractually stuck with this investment. So overall, I think we missed a, we dodged a huge bullet here, but, and I see both sides.
Speaker: We definitely learned from this, but Yeah, ah don't don't love the landlord is the short, but also we could have done things differently ourselves. So you do so you think he is he is being unreasonable. You see it from his side, but you think he overreacted.
Speaker: I think he overreacted. I think, again, he was two months slow in just accepting our, and like he was the last person to accept. And for some reason, there was some friction. And I think that friction just pushed him over the edge, maybe.
Speaker: i think there's much, like there's a lot we don't see maybe with the relationship of the landlord and the existing owner. And there's there's a lot of relationships going on here, more more than I would have expected.
Speaker: Absolutely. Like if yeah I was talking to you about this, Joey, I would do the exact same thing over again. If we had the right, if we, if we did it over again, we would do the exact same thing. I'd still send the letter. I think that that letter, like we sussed out. This guy's probably a little crazy. Ryan, what are your thoughts?
Speaker: Right. And I think from our end, that was how we basically determined whether this would have been a good relationship or not. And I think without, getting that direct confirmation, it would have been hard for us to work with the landlord going forward. If we never really knew what type of person or this landlord could be, i think we would have walked into a lot of trouble, as you mentioned. So I think we did dodge a bullet with this one, but I would say that it was definitely a very unusual set of circumstances. like I wouldn't have expected...
Speaker: this person to to take this long. And also the seller of the laundromat obviously wants this this asset out of their portfolio. So they're probably very frustrated as well that the landlord is really the hold up. it it's basically the second time around that this now has happened where ah buyer has been lined up and basically the landlord keeps on coming up with new reasons or new ah things to consider for for the buyer. And then actually heard this from Miao, but apparently even for us, they wanted to first start the discussion with, oh, maybe we should think about the rent again or the the lease period again. And so apparently... They even wanted to go back to the drawing board on that point and MeowgK pushed back hard saying, no, no, no, we we've already lined up a buyer based on the previous condition you you presented to the first ah potential buyer. So you can't just do that. So apparently there was already some friction to begin with. So we didn't even know that. And and now that we know that, I think certainly there's a lot of red flags.
Speaker: He's really making it difficult for the the business owner here. the seller to exit. But damn, for our listeners, you know, we've been excited for this. We posted all the stuff on social media. Now we look like a fool. Unfortunately, we're going to have to backtrack on this stuff, but it's it's okay. we' We'll make this a, well, I mean, this is the reality of of buying a business. and day Day two of, or day zero of owning a business in Japan.
Speaker: So I do think, okay, so again, um I kind of mentioned a Hail Mary move at the very start of this podcast. I don't think we're going to go down this route, but one of the issues here is that we're not buying a business. We're not buying like a Japanese equivalent of an LLC. Let's call it a GK. or, or like a C Corp, a KK, we're not buying a business. Um, this is a sole proprietorship that we're trying to take control of. And so we're really just buying the assets, which unfortunately these assets are old and they're leased assets. So we're really just buying, you know, con rental contracts of the washers and dryers in here. So that part is messy.
Speaker: And I think that, you know, if we going forward deals where we're actually buying a business, like are going to be so much more streamlined than this experience that we had here, if we can, like, I don't know if it's possible because I'm expecting a lot of small businesses in Japan are probably sole proprietorships, but if we can buy GK, like an LLC, you know, instead, I think, um, we wouldn't have to deal with the landlord because the lease contract is between the existing GK and the landlord and we're just buying the GK. So there's no new lease agreement. Same thing. We would get the bank account automatically because the GK would come with the bank account already. so All these issues, if we can purchase businesses that are actually businesses like incorporated, um, I think that's kind of the move here. And that was one idea that we played around with as the hail Mary. Well, do we push the seller, the the current business owner, Hey, just incorporate the business, you know, as an LLC, we've done it before. It's not that crazy of a deal. Um, and then get the bank account for it and then sell it to us. And like, we can still buy it again. But I think meow GK pushed back. Like it's not realistic. That's not going happen. Unfortunately.
Speaker: Are you guys okay. Go looking forward. here go Would you guys do a laundromat again? Or would you do the other kind of, so I think we're all excited about unmanned businesses. I think that's like the, or like as, as much unmanned as you can get, i think coin laundry laundromats are pretty unmanned. There's like some maintenance and and cleaning and and that kind of stuff that is required.
Speaker: Are you guys more excited about a laundromat or something else like golf simulators? I hear that golf simulators are are very profitable too in the sense that it's ah more of a subscription-based model. So I think you have bank on people being subscribed, similar to a gym membership, and and the number of people who will show up frequent enough to basically collect their... their fair share versus the people who don't show up.
Speaker: And I think that's the the balance of trying to find the right demographic where enough people have to use it, but also enough have people have to be signed up where it justifies operating it. And i think that's a different type of math than a laundromat.
Speaker: Laundromat, of course, is more seasonal potentially where if it rains or if there's certain weather that could be more favorable for the business proximity so there's a lot of different factors and circumstances but i would say that non-traumatic again would be interesting obviously because we put so much effort into already learning about the business i feel that we should utilize this expertise and then be able to figure out what the right move is next time so if we want to make a bigger Launchomat portfolio, I think we can. Or if you want to go into different types of unmanned businesses to figure out what would be the ideal balance. Or maybe we just make a company with a different portfolio of these assets. So we have a company that owns a launch mat, unmanned golf, maybe they sell food. you know I think we can figure out what that right balance is for us.
Speaker: Yeah. or Or potentially, like I think you mentioned it in our WhatsApp chat before, Ryan, but like, or we just rent a space ourselves and put and install a laundromat.
Speaker: um or Or, you know, maybe if we can find a place cheap enough, we buy the location and then we run it as a laundromat. Or, you know, if that's too expensive, we rent the space ourselves. um I think it's also interesting idea. Would you guys, get kind of given the advice that people have told us up until now,
Speaker: Do you guys think that we should start a brand new GK to kickstart? Like if if we're going to buy a laundromat, do we start a new business to keep it siloed? um You know, if we were ever to try to flip this business in the future, or do we do it under Takamori?
Speaker: I think we got to do it under Takamori just for our first rep. um i think we'd be gang accounts I think we'd be getting ahead of ourselves with admin costs and and timelines to get stuff set up that Because we already have this entity set up, makes it a lot easier. So for listeners who are actually just about to buy an Akia or maybe have bought an Akia, making the company has been a very challenging experience. We've needed actually Ryan, who's our native speaker on the ground to be our representative director to really quarterback a lot of the, just the paperwork, honestly, the KYC, like it's just been so challenging. So,
Speaker: Thinking about doing all that again, Joey, I don't think it's worth it until we know we have a winning model potentially. Yeah, that's true. Yeah. Going back to your question, I think we 100% keep pursuing the laundromat idea. I think we put in enough energy into thinking about let's go stuff that we we do it.
Speaker: there's like There's tons of laundromats. we We're driving on Shikoku and there's like so many beat up. The Kochi laundromats all suck. like I think there's such a big opportunity just to be like, let's make these better very easily.
Speaker: Tokyo is expensive though. Like Tama is expensive to do this in a place like Beppu like a, you know, Kochi city, probably more affordable than Western Tokyo. But Western Tokyo makes more sense given that's where our ops person Linda is at the moment.
Speaker: how do this is This is a far shot. How do we open a Matsuya chain? I want i want a Matsuya chain. A Matsuya franchise, bro. I don't want to see what goes on behind the kitchen. I don't care, man. like It'd be so cool to walk into Matsuya we own and just like, what's up? Give me the Omori extra meat with the Hanjuk Tamago, please. It'd be so sick.
Speaker: But Ryan, any thoughts on any other chains that you'd be interested or businesses in general we should consider? Yeah, I think it's just an open book at this point. And for me, it's more about trying to understand the operational side of what the best strategy is. So, you know, we mentioned about the ideal acquisition being a corporation.
Speaker: Of course, that comes with a potential risk that if it's an existing company, then they could have other assets or liabilities on the books, which require us to also inherit or purchase along with the business.
Speaker: So... I'm a little conflicted there of maybe the sole proprietor is a good in a sense where if we can convince them to start a new GK, where we're very clear on what's in there. a lot times that could be more ideal. Or of course we spin off a new company and buy by it ourselves.
Speaker: So I think the risk of buying a company and the level of due diligence required by a legal expert to review the books and the assets and liabilities. That could potentially be substantial in terms of time and also resources. That's a great point. We just have to be very mindful about what what type of of business we're walking into or what type of company we're dealing with.
Speaker: So I guess pros and cons on both ends, but I would say that I'm very interested still in learning more about the laundromat business first. And then i think we figure out what would be ideal. I think, as Take mentioned, buying a gyudan chain, like a beef bowl chain, like that would be very cool too. It's just... Could be okay. Ryan's on board. You know, like a franchise owner...
Speaker: or franchise is a franchisee, I guess that's the the term, right? Since we're yeah we're getting the rights. I think that's that's also very interesting. like I don't think I'd want to do a convenience store. i think convenience stores, the amount of things they can do in a Japanese convenience store just baffles me. Too many things. You have to do all of that.
Speaker: like you know you can i don't know if the listeners know, but Japanese convenience stores are just everything. You know you can, of course, just buy food, but you can also pay taxes, utility bills. You can send parcels. You can...
Speaker: just do also sewing So, so on the buying, if someone told me once I was just at an airport talking to somebody and he gave me the advice too, he was like, Hey, if you're starting out buying small businesses, he said, start with a franchise. Cause they kind of give you a playbook and that's like, just follow the playbook and you'll succeed. Um, kind of two, two ways to look at it. Right. When, when you buy a franchise, I don't think you can resell flip it. Like, are you really going to three X, you know, profit or revenue on a franchise in X years and then resell it to somebody else and and make it like ah a real profit or is it more of like a cash flow kind of thing? Um, or like we talked to somebody once and they were doing it for some sort of tax scheme, kind of, they got some tax credits or something like that versus buying a small business. That's not a franchise. I do think the, the potential to 3X, 5X, that business is higher than when you're buying into a franchise.
Speaker: What do you guys think? So you're saying we need to make a Mazio competitor, eh? Call, count me in. I'm saying we buy a dude's business that's already making something similar to Matsya, but it's not Matsya. It's like just a sole proprietorship. And then that's, I don't know. Then we you do whatever private equity does and like, you know, 5X it.
Speaker: I agree with you. I think a lot of folks do do this for the tax... benefit i think there's a lot of depreciation that they like seem to write off and and like they aren't doing there you aren't buying a matzio chain to get rich i think it's just like a safer place to put your your capital that has some cash flow i think so yeah actually in retrospect no way we're buying a matzio chain we're we're making a matzio competitor would be my vote I think we're interested in getting those higher X factor multiples, like put in some work for X years and then resell it for, you know, whatever, a multiple of what we purchased it for.
Speaker: Before we close the book, actually, on the coin laundry business, I think Ryan brought in someone really good. Ryan brought in a lawyer. I think Joey and I would not instinctively do this ourselves. Ryan, what did that person do? it seemed like they were quite helpful, but you were probably closer to the ground with them.
Speaker: Yeah, sure. So in a normal, I guess, M&A, if it's a company, then these lawyers would look at the finances, also the contracts to make sure that you know we're protected in case things are misstated or misrepresented. so a lot of the the process really has been to understand the current lease agreements, to understand what type of a contract this person has the landlord in particular you know there's parking in front of ah the the property there's also the open lots and what what rights do we have as as the tenant to use these so a lot of more administrative items but you know still very important because we come into the business and then we won't be able to do certain things then i think that would throw a lot of uh our plans uh off the rails so i think all of our um
Speaker: planning has to be done based on what we can and can't do. So we just want to make sure that we understand that. So a lot of the legal review, of course, is to make sure that the contract is on fair terms, but also for us to be able to understand what we're allowed and not allowed to do as a business. So that's really the the high level summary of of the the legal review.
Speaker: Got to get a lawyer. TLDR, basically. thats Yeah. and thanks for Thanks for thinking of that, Ryan. Tug and again, like Tug has said, we would not have thought to bring in a lawyer, let alone be able to find one.
Speaker: OK. The deal is dead, but the team is assembled, and our spirit is higher than ever. Higher than ever. we are We are effing going to get a coin laundry business somewhere, hopefully in Tama.
Speaker: Where do we go from here, guys? Do we go back to the Tramby messaging? Do we start door knocking on existing coin laundry businesses in Tama and just be like, hey, you guys interested in selling? like you know we we The gun's loaded. the The team is ready. What do you all think?
Speaker: At least for RN. Sorry, is it okay if I mentioned that? Meow did, of course, give the strong feedback that we shouldn't be reaching out to the sellers going forward. but ah Don't believe that. Understanding, they did introduce some of the ah ah some other deals, including off-market deals to us. So that that is one route, is is going through our existing relationship now. um' Going through Trambi, there's more people...
Speaker: who are looking at these deals and also Tramby could take a cut potentially. So we are bypassing another intermediary party by... forgot about Tramby. I think certainly we we've started a relationship and our goal, I think, is to continue to build relationships with these industry insiders so that we can get access to off-market deals. you know Similar to real estate. Good stuff does come up here and there it's true on the public market, but a lot of the the best deals are off-market and you just really need to know people and...
Speaker: present yourself as a certain profile, you know, so that people will refer a business to you. So I think our goal as a business should be to build these relationships where we can just get a whole bunch of ah information regarding deals, whether we go through with it or whether other people can pursue it or not. know I think we want to be in the position to be able to get more information. So I think the goal is to, I think maybe, at least from my end, to to build this channel through Meow and learn more about how they operate so that we can get a better understanding of what type of deals are are available.
Speaker: Should we send them a handwritten letter with our Starbucks gift card? Let's send them a Starbucks gift card. Merry Christmas. Although we blew up the deal, she has a $20 Starbucks gift card. like let them This is our style. like let' I think we send Meow a Christmas letter, try to like smooth it over a little bit.
Speaker: we We also need to tell them that we'll send it to them in advance. ah no it Would it be okay if we sent this to you? All right. Here's my thoughts on meow. Intermediaries are on our side to an extent.
Speaker: They are, I would say, two-thirds on our side. They're 66% on our side. They do care about us. successfully purchasing a business, in this case, a laundromat. And so they are the good guys in this situation, but they are not as motivated as we are to get a laundromat in Tama. Like no one is hungrier than we are to make this happen. They're not going to put in the extra work that we would do because they don't care about our deal as much as we care about our deal. So I think that, yes, we should nurture the relationship with MeowgK because it will pay off and it will be beneficial. But I don't think that that should preclude us from door knocking, sending letters to random laundromat owners like, hey, you want to sell your business? We're a Tama-based business ourselves, et cetera, et cetera. like i think meowk i I think we got to work both sides because MeowgK just, yes, they care about us to an extent, but they don't care about us enough is is what I think.
Speaker: I agree with you. um The one unknown factor is like how deep are these guys the coin laundry game? You know, are they the true ring leaders behind it?
Speaker: Like pulling the pulling the strings? like so i think we have to be We've gotten one smack on the slap on the wrist here. Next one, i'm I'm a little afraid if they're deeper deeper in the game than we we think they are.
Speaker: they could be That's a good point. I think, at least from what I heard, I'm blacklisted from this current live lord. So in case this management company owns or manages other coin laundry owned by different people, then potentially, you know I'm on their hit list, so it wouldn't go very well.
Speaker: So I think we...
Speaker: Go ahead. What's going on? Like, why would the landlord blacklist you? Like, again, coming back to the landlord, like, what is he thinking? Like, I can't trust this Kubo Zono guy. Because I sent the letter, right? Apparently, that's all I was saying. Because you sent a nice letter.
Speaker: Maybe he thought I was trying to bribe him with a gift card, right? It's strange. And then Meow even told me like, you know, you could try again, but you just can't show up anywhere. So you could set up a new company, but someone else has to be in the front and it can't be your name or you can you can't, know someone else can buy it as an individual, but it can't be you. So it was very clear to me that I'm on some kind of blacklist now.
Speaker: Thanks for being our our shit shield here. but so so i mean, this is all a very new experience and I'm not surprised in hindsight that people react this way in Japan, but until this happens,
Speaker: I felt a little bit more optimistic about people wanting business. I guess this reinforces that understanding in Japan that people are relationship driven and there's a lot of maybe be emotional aspects that push business forward more than logical aspects.
Speaker: you know You can't just outbid someone and expect you to skip the queue. And obviously you can't just send a letter and cut down the the turnaround time of the response. So I think we're just learning here that business in Japan just has a certain way of doing things and there's a checklist and you just have to go from the first item down and you can't really go bypass these things or shuffle the order around.
Speaker: so I think we're just learning not to rock the boat too much. It's really true. We see it in real estate deals as well. And like on this deal, we tried to outbid like back when there was someone in line in front of us, we tried to outbid them. We've seen that on real estate deals too. Like, like, yeah, I think in, again, I'm not Japanese. Here's my assessment of the situation.
Speaker: I think up to a certain point, like societal norms, business norms in Japan reign supreme and you got to follow those rules and, you know, wait your turn in line, et cetera.
Speaker: After a certain point when cash hits a certain level, i think that that may change. Like, I think it's not to say that, oh, Japanese people, they don't care about money. I think it' it it it depends on what level of money we're talking about. If you make, I do think that people all over the world react the same towards money. And like at a certain point, they might be like, or maybe they'll get even scared off. If you make a crazy offer over asking, maybe they'll think you're too you're too risky. I don't know.
Speaker: I like to believe that at a certain point, money talks. Yeah. Yeah. I think but in terms of relationship, I think people are probably looking at where is the trade-off? Like if you offer enough money, maybe they're willing to sacrifice that existing relationship or infrastructure. So I think that that's where that, whatever that breakeven point is for the the the seller, I think. So if you offer enough, i think that's where we we get to.
Speaker: i I think though, like us writing the letter was genuinely ah just globally seen as a very nice thing to do. Like, I think we went out of our way to just like emphasize, Hey, this is who we are.
Speaker: We you are good tenants and putting the right foot forward. So again, to get slapped on the wrist for that, I understand we made a process of order, might've sent it out of to the wrong person. But I think I'm still a little bit shook like, oh man. Okay. That, that,
Speaker: that That was not well received. I feel like anyone would have received that like, okay, like not negatively. but I'm worried we're going to be less... ah What's the right word? Less nice.
Speaker: oh No, not not less nice. Do you think we're going to try to toe the line a little bit more? in turn in like Face with this kind of situation again. I think right now we're saying, let's send the letter, let's send the letter. But let's say it's three months from now, push comes to shove, we're trying to get a new prot we're trying to get a new laundromat.
Speaker: let's just say like, are we going to send the letter? Yes or no. Are we going to be, are we going to learn from this experience and lean more on the cautious side? Are we going to learn from this experience and be like, I'd rather suss up out this landlord and do and send this nice letter because I still strongly believe that a handwritten letter goes far in Japan.
Speaker: Yeah, I mean, order of operations would have been different. I think we would have put more pressure on Meow, GK, our intermediary. just I would actually, if if this happens again, i would put a lot more pressure on them. Be like, hey, we're going to back out of this deal you know and see what they do to get... They've obviously...
Speaker: had more reps of this. So I actually am really curious on like, what do they do when their back is against the wall of like, hey, this deal is going to fall through? Yeah. What do they try? Not the letter. but Just to give you context on that Meow GK thing, they they actually didn't seem to care too much in a sense of of of this deal falling through because damnmit at this point, they go through a lot of deals and then this is just one of the many deals that they process.
Speaker: And this rarely happens where I think the landlord or external factors kind of hold the deal from going through. And so I think they they were okay basically either way.
Speaker: So it didn't sound like they were that frustrated with the deal not going through. I think it was more frustration to do with our direct action. So I think from their perspective, this is just business as usual where one deal doesn't go through, but they have many other deals that do they they could just yeah walk away and be fine. So I think that's where you mentioned about they're 66% on our side, but the rest is not. I think it's just that they couldn't care less whether we get the deal or not because they have other business anyway. So their heart is definitely not in the deal as much as us. So that's certainly a big factor for us to drive the deal. And like Takei said, to push harder when we need to get something done.
Speaker: Well, we got at least a rep under our belt. I think we, again, dodged a bullet. We learned a lot here. This is a failure, I would say, on on our parts, especially maybe broadcasting it too early. We were really excited about this coin laundry and things stalled out, but we made some good content. And I think we'll follow up with some, unfortunately, bad content. But this is just the reality of of doing new and different things, I feel like, in Japan for us. And Again, wouldn't do it any differently.
Speaker: um Ryan, I mean, thanks for taking the flack on this. Thanks for quarterbacking it. We are going to get it a laundromat in 2026. I am 0%. Spirits have never been higher. Yeah. It it has stoked the fire. we are We're going to have to do this now. yeah We're going to make the most successful laundromat, I believe, in Tama region and just like, what's up, what's up, bro, landlord? could This could have been yours.
Speaker: So sorry to everybody. We promised free laundry for life. We will not be getting free laundry for life until we figure out yeah situation. Yes. Yes.
Speaker: I feel like, Joey, on our trip, we were like going every bar we went to or like all our friends we met were like free laundry for life. And we're giving them the laundry shirt. If you come to Tama, I'm going to have to backpedal on that one.
Speaker: Well, we could still pivot and make it happen. It's just a matter of time. We are going to make it happen. What an experience that was. feel like we, yeah I don't know if you learned a lot. Did we learn a lot?
Speaker: We definitely learned a lot. like I think we've never we' never put a bid on a business. like I don't know anyone else in our friend group or network that has too. so I like to think are trailblazing to some degree.
Speaker: Yeah, yeah, yeah. Pay attention. I think i feel like we know now, like hey, we got the lawyer lined up. We know pay attention. Is this a GK? Is this sole proprietorship? Pay attention to that kind of stuff. Like, yeah, I think we're more like, we're going to ask better questions at least of meow GK the next round.
Speaker: Yep. Any final words, Ryan? ah just I think, again, this is very unusual that it ended up this way. And I think our expectation to be able to purchase was correct. I think really this landlord is just a little strange and we couldn't have expected this deal to fall through because of this.
Speaker: So I certainly think that we did make the right moves. And we now know what to do, as Joey is mentioning. So I think we're certainly in the position now to push through and make a deal happen. I'm certainly very excited that we have this know-how now and then we can really execute.
Speaker: Let's do it. Onward and upwards. ah My last closing remarks on it are... I think finding, like it's going to depend on where we have the operations person. Like we have Linda in Tama, so we're kind of only looking in Tama. But like Ryan, if you have connections in other places, like we could potentially acquire business in those other places. I think it's really like where's the operations person live?
Speaker: Oh, good. Very, very last point. If you are a listener to this podcast and you want to be our an operations person and you are somewhere in Japan, please email us at podcast at Akia-mart.com. We are looking for folks. And very, very last thing, if you have not liked the podcast yet, please do it. We've hit over 100 likes. and If you've listened this far in the podcast and haven't liked it, what are you doing? Hit that like button.
Speaker: Oh, yeah. All right. See you, guys.
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. 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. 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.
