MY FIRST OVERSEAS DEAL ZIV MAGEN
Can you walk us through a typical deal?
Not that different from any other country, except for the almost complete absence of the need for background
checks on realtors and wholesalers, double-checks on titles, debt etc. You’re all but guaranteed not to have to
resort to those tactics in Japan, due to the nature of the practitioners involved. This doesn’t mean there’s nothing
that needs to be checked, but simply that you can get right down to the actual deal analysis, which consists of
the following:
2.
Once the offer is accepted (or refused and resubmitted, then accepted), the realtor will
1.
All relevant data regarding monthly income
provide the complete information package. This
and payments normally appear in the body
should include the tenant history, renovation
of the MLS listing itself. After entering these
numbers
into
your
spreadsheets
history on the block itself (internal renovations
and
are quite affordable in Japan, and tenants would
receiving the “green light” on your selection
never let things deteriorate in a state of non-
criteria, you would then submit an offer. Bear
repair, so there normally isn’t much to discover
in mind that in Japan, negotiations to more
in that regard), and of course the status of the
than 10%, or thereabouts, are fairly rare and
holding company’s “accumulated funds pool”.
are sometimes considered an insult. We’ve
This is known in other countries as the “sink
had some sellers in the past, who wouldn’t
pool”, “repairs fund p ool” or various other
take a further offer from us, after having
names. It is essentially money collected from all
been “deeply offended” by our “rude” first
owners of all units over the years. The building’s
offering.
renovation history and accumulated funds put
together should make sense. If that pool is
depleted and there aren’t any major renovations
to speak of in the last decade, you know
something’s wrong - most likely financial
mismanagement or troubles of related sorts.
3.
Assuming
nothing
untoward
has
been
uncovered in the course of due diligence, you
would proceed to a contract signing meeting,
where a government licensed “official document
reviewer” will read aloud and elaborate on all
official documents (a good chance to re-confirm
all of the above before signing anything), at the
end of which all documents are signed, and the
deposit (normally 10%) is the paid.