REI Wealth Monthly Issue 09 | Page 22

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.