MY FIRST OVERSEAS DEAL ZIV MAGEN
This partnership can take the form of a split-allprofits-and-expenses-down-the-middle kind of
arrangement, or can simply be a services
package purchased from a firm like ours, for a
small
percentage
of
the
incoming
rent
(normally less than a property manager). That
partner
can
then
also
handle
all
correspondence with local entities, which is the
last main barrier between foreign investors and
the Japanese property market.
maintenance
requests,
approving
Receiving
quotes,
finding new tenants etc., can become quite
challenging when one doesn’t speak the
language. Even a “shark-less” business pool like Japan can cause many frustrations until they’re resolved,
through no fault of either side involved – which is exactly why Japanese professionals also prefer to avoid
dealing with non-Japanese entities.
What are some of the biggest real estate investing mistakes that you’ve made?
I remember my very first deal – a package of three units, all sold be the same owner, in Kitakyushu, one of
western Japan’s bigger Industrial and blue-collar hubs. Although the yield was phenomenal, the tidy IT geek
in me couldn’t handle the fact that one of the three was slightly lower in the rental income than the other two,
and for no reason that I could see.
And so, without consulting with the property
manager,
and
without
verifying
market
conditions at the time, I proceeded to an “allguns-blazing”
approach,
and
notified
the
tenant, whose lease was just ending (“What
perfect timing!”, the greedy westerner in me
rubbed his hands together) of a rent rise – to
the tune of something like $20 a month. This
was less than 10% of the rent price. Even the
property manager’s complaint that they had
just notified the tenant they may continue their
lease as it is, didn’t deter me.