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- [00:01]
A
Welcome back to Real Estate Without Borders. Today I'm joined by Derek and Nick, who have done something that I am very, very envious of. And I'm gonna. This is very selfish discussion probably because I'm just gonna be trying to extract as much knowledge on how you guys did what you did. I came across a video, I think on. It was on Instagram and it was viral. And it was just like, here's how we basically built or bought. Bought our ski vacation set up in Japan in the snowiest region in the world, I think. Right. So Korea, you guys, just before we dive in, can you give me a little bit of a background on. On who you are and, and what you do? And I guess I'll. I'll start with Nick and then we'll jump over to. To Derek. So. Go ahead, Nick.
- [00:40]
B
Yeah, sure. I'm. Nick grew up in Ocean City, Maryland, and I kind of moved all over the place. But right now I'm based out of San Diego, going to Japan, you know, 40, 45 days a year now, which is super fun. Half work, half fun. Yeah, I mean, we started this company basically just two guys that like to travel the world together. I surf a lot. Derek snowboards a lot. And basically everywhere we go, we jokingly say we're going to buy property there. And when we got to Japan and we jokingly said it, we looked on some Japanese real estate websites, could barely read it, but we were like, is this really $20,000? It really was. And that's kind of what kicked us off. That was about three years ago, and our company started about a year and a ago, and we've been kind of doing it ever since. And I mean, is that a good enough introduction? I can give, I can give you more information if you want.
- [01:36]
A
We'll get. We'll get into it. That's perfect. Derek, how about you?
- [01:40]
C
My name is Derek. I'm from New York. Still live in New York. Yeah, pretty much everything Nick said kind of explains our business. Me and Nick met in college and yeah, I've been traveling, surfing, snowboarding. And yeah, this is. This has been the most fun job I've ever had by far. So I'm excited to talk about it.
- [01:58]
A
Yeah. So, okay, so Nick, you mentioned like that you're in. In Japan often for, for play, but also for work. And now. And Derek, you're mentioning. It's a. It's a job. So explain to me what. What's going on here. What is. And I'll start. I'll start with you, Derek, because you you know, you kind of let it off there. But what do you guys do? Like, tell me. Tell me about your business and how you help people buy. Is it like, buy. Buy real estate? Invest in real estate in Japan?
- [02:23]
C
Yeah, absolutely. So we started just buying our own home, and there was a bunch of roadblocks. It was like a year, year and a half of just trying to get contacts and kind of being halfway in figuring more information out. Wasn't a lot of information out there. And then buying our house, we built a network of people and then also getting our house listed on Airbnb. It's a pretty bureaucratic process to get an Airbnb in Japan. So we built a network of people, and we're like, I bet other people would want this service that we've built with these connections. So we kind of just built a business around the connections we made. So, yeah, we help people buy homes in Japan with our partners, and we also help people get licensed and rent their homes on Airbnb. So it's sort of like a lifestyle investment. You know, you can definitely make some money. But it's also. I'd say most of our clients use the house a lot as well, so it's not purely just investing.
- [03:18]
A
Anything you want to add there, Nick?
- [03:20]
B
I was just going to say, it might be funny to add kind of the reason why we actually started the company. So initially we thought of this as, okay, we're going to buy a house. Maybe we'll buy another one if this works out in a year, and maybe I'll ask my dad for some extra money if I need a third, you know. But we actually posted on a Reddit thread. The Internet's kind of crazy. We posted on Ask Me Anything, and it basically said, hey, we're two snowboarders. We just bought our first house in Japan. Here's what the numbers look like. Here's what we're into it so far. Ask me anything. 24 hours later, I think it was 800,000 views and over 200 dms directly to Derek's inbox. And I do like web design on the side, and I just threw a website together literally overnight. And we booked 15 calls that next week. And, I mean, that was like the origin story. We never really thought it would turn into a business. And now, you know, we're using all sorts of pipeline automation, sales tools. I'm learning all about that type of stuff that, you know, it kind of all started from curious guys. And then a Reddit post.
- [04:28]
A
Yeah, yeah. So when you are helping people, where does most of your demand come from, like, who are the people who are interested in doing these kinds of things? And Nick, Nick, you can field that one and then we'll jump over to Derek.
- [04:42]
B
Sure. I mean, right now. So I have like Clarity installed, which is basically like a tracker for who comes into our website and where they come from. I'd say 90% of our leads are actually from Instagram right now. We do still have leads from some of those older Reddit posts. We still have a lot of word of mouth leads. We're at about 26 clients now. So, you know, we're just kind of building that word of mouth pipeline, which has been nice. Um, even Google feel like. I got an email a couple days ago. This has been like the biggest month. I think it was 300% higher than last month. So it feels like our kind of SEO and like ranking on, on Google, it's taken, you know, almost a year, but that seems to slowly build every month. Um, but yeah, honestly, it's Instagram. Social media is number one.
- [05:31]
A
Nice. And that. Yeah, sorry, go ahead, Derek.
- [05:34]
C
No, yeah, I was just, just agreeing for sure. Instagram is definitely the number one spot.
- [05:39]
A
And is it mostly Americans?
- [05:41]
C
Yeah, a good amount of Australians, but I'd say probably 70, 80% of Americans.
- [05:48]
A
Interesting. What, what attracts them? Is it, is it price? Is it the, the tourism appeal of, of Japan, like that, that kind of allure? What seems to be like the big driving factor?
- [05:59]
C
Yeah, I would say definitely because we're skiers and snowboarders. A lot of our content is that driven by snowboarding and skiing and some surfing. So I think it's a ski home because no one in America can afford a ski home here. So I think that's the big draw is skiing. And then on top of that, you add an investment like, hey, this can cover, you know, you can make a little money and cover your costs. And I think that's the biggest, biggest selling point.
- [06:25]
A
Yeah. Interesting. Nick, any thoughts you wanted to add there?
- [06:28]
B
Not really. I think it was funny because we were in the beginning kind of thinking, all right, Silicon Valley tech Bros are who we're marketing to. Yeah, they're going to want to see us in Japan. And honestly, it's a lot more just like couples that enjoy getting outside and skiing and people a lot more like us. So this is honestly, and it sounds cliche maybe, but it's the first job I've had where I feel like I'm just being myself the whole time, which is really, really, really nice. And I feel like Even. Even on days when we're super busy and super stressed, I'm not changing who I am and to talk to the clients, which has been, you know, super helpful. So that's cool.
- [07:08]
A
Yeah, a hundred percent.
- [07:10]
C
Yeah.
- [07:11]
A
Do you guys mention price point? Like, Derek, when you were talking there, like, walk me through, like, what is actually. What. What should somebody actually expect to spend on if. If somebody's buying a ski home in Japan? Because, like, you know, if you go to. I mean, I'm in Canada, so, you know, we have like, Whistler. I mean, even. Even, like near the gta, we have like, Collingwood, which is like an ant hill. And you're still like a million bucks for, like, you know, like Chalet, like, be the entry point. So what, like, if I want that lifestyle, if that's my goal, what am I paying for one of these things in. In Japan?
- [07:40]
C
Yeah, yeah. Quick to go back to Nick's point, just one thing that I found super interesting. What he was saying is we've been doing a lot of expos. Ski expos to meet more people, and we brought some friends along, and one of them was being very salesy, and me and Nick were saying, like, hey, just like, be yourself. Like, we, like, go to. Go back to Nick's point. It's been super fun to do a job where you can just be yourself. And that is the most attractive thing clients want. But, yeah, cost wise. So we bought our house for 25k. We put another 65k in. So we're all in for like, okay. But the house was definitely livable at K. Very dated. Wouldn't have done good as an Airbnb, but very livable. So we wanted to make it towards the top end of the Airbnb market. So that's why we put another 65k in. So those are about the numbers, you see.
- [08:28]
A
And would your. Would you say your equity would be protected in that right now? Like, if you were to put it up, would you get whatever. If you're in it for 100k, would you get 100k for it? And would it. Would it. Would it sell quickly? Like, is it pretty liquid? Like, tell me about that. Yeah, yeah.
- [08:41]
C
So that's. That's definitely the one, I guess you could say. Caveat is I wouldn't expect it to sell quick. I think that we could probably get probably somewhere close to what we put in, definitely not more. And I don't think it would move quick. I guess the benefit for us would be that we have a pretty good following on Instagram, so We can market our own house, but generally speaking, homes don't increase in value. They do sit around for a bit.
- [09:07]
A
Yeah, fair enough. And then on the, on the revenue side, like, how does it do from an Airbnb perspective? Like, what are you. What are, you know, how many nights are you rented out a month? What's the rate? How does that seem to go?
- [09:20]
C
Yeah, so our house is just getting listed on Airbnb, so it's still early stages. It. It took a long time to get the license, about six months. But we use Air DNA, so I think we could expect anywhere from like 30 to 40K gross revenue. So they're averaging like 190 a night. And the occupancy rate for our town is about 50%.
- [09:39]
B
Nice.
- [09:40]
A
And you put, you pay for the whole thing cash or do they do mortgages over there?
- [09:46]
C
Has to be cash. Yeah. No mortgages for a foreigner.
- [09:49]
A
Fair enough. They do have mortgages. Yeah, go ahead.
- [09:53]
B
Yeah, there are. Well, the only thing I was going to add is there's a couple hard money lenders out of Tokyo. Their websites are a little bit sketchy, but I do know, I mean, I've met someone that supposedly has used them. I, you know, can't confirm, but their rates are more like US rates. And there's a lot of bureaucratic, like, you can't buy this house if it's built before the year 1990. And some of, some of them are for apartments only. So for all intensive purposes, like ski resort or a home in the mountains, you're looking at paying cash unless you have residency, which you are required to have residency in order to have a bank account. So, you know, we don't typically recommend going that route because getting residency can take two to five years.
- [10:40]
A
How much of a pain point would you consider that? Like the lending piece to be in. In people who come in, like, to your, your pipeline, the discovery process. Like, I know a lot of Americans, probably, they are. See, you know, when they, when they think buying real estate, there, there's, I think there's a natural assumption that, you know, you're going to get some portion of it. Debt finance, like, does that seem to be a bit of a stumbling block?
- [11:00]
B
That's definitely true. And it's always a question. So we do try to kind of tackle it first. It's one of our, like, FAQs on our website, you know. Yeah, but, yeah, I mean, the price, I actually think because we don't allow debt or because, you know, legally you can't get debt in order to buy A house. It keeps us from bringing on clients that maybe shouldn't get into it in the first place because, you know, like Derek said, we put almost triple our home value into just the renovations. I mean, we added a bathroom and did a lot more than I think we needed, quote, unquote. You know, I don't want to steer people in the wrong direction and say, hey, you can get this house for $20,000 and then list it on Airbnb and make $20,000, because that's not what it is.
- [11:48]
A
Yeah, yeah, I think it's important. Like, a lot of people just think about real estate investment as a leverage play and don't, like, really compute that. Leverage. Yeah, it amplifies returns on the way up, but it also amplifies risk substantially on the way down.
- [12:01]
B
Totally.
- [12:02]
A
And I think that that's what a lot of people in the US Are probably learning right now, based on the. The party that we had during the pandemic era. So interesting. From a, like, I guess, demographics, like migration perspective, et cetera, a lot of the other people that we have on the show, like places like Portugal, Italy, Panama, etc. There's, you know, there's obviously, like, incentives from a visa, passport, etcetera, Perspective. That doesn't really exist so much in Japan, right? No, no.
- [12:34]
B
You have every right legally to own the land. There are no land leases. Contractually, they can add a land lease, but we steer clear of those. So if you're a foreigner and you buy property in Japan, sorry, you do own it outright, but it literally doesn't do anything for your visa or residency status. You have, as an American, at least, you have two 90 day stints per year. So 180 days total. But they have to be broke enough. 90 and 90. And most of our clients don't plan on being there for 90 days a year anyway because they want to rent it the rest of the year. And we can get into the whole, like, licensing process too, if you want, but that's kind of part of the home search is if you want to Airbnb your home. And I keep using Airbnb, but short term rent is what I mean.
- [13:23]
A
I like Airbnb. Anyway, they're. Yeah, they're a sponsor on my Canadian show, so we can just call it. I'm proud of them for getting the. The clean. They have the Kleenex effect there. Right. Where people just call it the. The.
- [13:34]
B
I know.
- [13:35]
A
Yeah, it's good. That's.
- [13:35]
B
I mean, I'm jealous.
- [13:37]
A
Yeah. On that note, actually, like, while. While we're we're talking about that. Is that the primary platform in Japan? Like, is it? And is it mostly like, what. What, you know, from an infrastructure perspective are people using to actually do these rents there?
- [13:52]
C
Yeah, I would say, like, 30 to 40% of our guests are domestic Japanese tourists, and they almost exclusively use Rakuten. And this other one with a J. I forget how to pronounce it. And then the foreign guest, definitely booking.com, airbnb, Google Travel, I would say, are those the main ones? So we use, like, a property management software called Guesty so that we could list on all of them.
- [14:16]
A
That's really good insight. Yeah, I was going to say, like, from an infrastructure perspective, I guess it's probably a lot more. You know, it's so easy to just jump into a market and make assumptions that it's similar to here, but you're actually like, it's a whole different domestic economy where. So there's. How long did it take you to kind of, like, determine that whole thing? Or do you. Were you guys sort of familiar with it because you've traveled there a lot?
- [14:39]
C
Yeah, it's funny, we're, like, still figuring it out, like, specifically with the way that we're designing our Airbnbs, because you do have to keep in mind, like, the preferences of all the people coming in. You know, like, Japanese people have very different preferences, like tatami rooms, sleeping on a futon, certain things in the kitchen, like rice cookers and. And these clay pots that are very common in Japanese houses. Also, like, with cooking, Foreign guests don't really cook. Japanese guests do cook. So, yeah, we're still learning it all, but it's definitely very interesting.
- [15:08]
A
You mentioned, like, the portion of your guests that are. Are Japanese. What. What portion are. Are from other countries. And what are those other countries?
- [15:16]
B
Yeah.
- [15:17]
C
Nick, you want to take that?
- [15:18]
A
Sure.
- [15:19]
B
So a lot of the Japanese domestic travelers actually go in the summer because Tokyo can get up to, like, 115 degrees Fahrenheit in the summer. And if you can afford to go up to Hokkaido, and, you know, our place is 10 minutes from the beach, it's a port town. The average temperature in the summer is like, 74 to 80 degrees Fahrenheit. So it's almost like the opposite of a snowbird. And then in the winter, I would say it's closer to 70%, 80% foreign travelers. So, you know, not as many domestic Japanese people are into snowboarding and skiing, but tons of Australians, tons of Americans, Europeans, you know, Hokkaido. And J. Pal is definitely blowing up. I Think we're, we're even partially riding that wave right now, which has been fun. But yeah. So summer and Derek said, I think he, he already told you, but we're at about 50% occupancy all year. But really it's like 70% in the winter, maybe 60, 40% in the summer. And then, you know, spring and fall is a lot less, so it averages out to about 50, but that's not consistent throughout the year.
- [16:27]
A
Interesting. I know, like, in Japan, we, we've had another guy on talking about sort of like the, the IKEA phenomena. Like all of the, like, millions of vacant houses. And, you know, basically you can get them for like, you know, like you said 20k or bas. Functionally free. Right. Has that changed at all? Like, are based on demand and does that very geographically. Like, it sounds like where you are is probably a little bit more of a popular area. Like, can you give me a little bit of a lay of the land on, like, what demand looks like? Can I just like, go and scoop up a house for free in Japan? Or would that not be an advisable investment? Like, what are you. When somebody like me as an example, where I'm like, you know, my kids love Japan, the idea they've asked me to travel there all the time. I don't know what kind of campaign they're running on YouTube shorts or whatever it is, but, like, they're all, the only place they want to go in the world is Japan. And I'm thinking, like, from a real estate perspective, I'm like, I just need to buy a house over there. I've been wanting to for a long time, and I'll be talking to you guys about that after this. Anyway, if I'm just like, I have no idea where I'm thinking, I don't know if I want it to be. I mean, I mean, a ski home would be sick. I, I, I'm similar to you guys. I've snowboarded my entire life and, and would love to have that. But where, like, where just purely like setting aside that the leisure piece, where are the best places for me to be? Like, thinking about in Japan?
- [17:42]
C
Yeah, the, the, I would advise you not to buy one of those free homes or $5,000 homes.
- [17:49]
A
Okay.
- [17:49]
C
They come with a lot of pro, they come with a lot of problems. They're, they're very, they're cheap for a reason. Yeah, the landscape, the landscape is that the homes are cheap almost everywhere besides major cities. Tokyo, Osaka, Fukuoka, Kyoto. So you can find cheap homes anywhere. And the Demand would need to pick up an insane amount for that to change because there's an estimated 10 million vacant homes in Japan right now, and that number's only expected to keep increasing. Our town is estimated 20% vacant homes. So it's even affecting towns like ours. It's like I said, it's pretty much everywhere. From an investment standpoint, we really like the ski towns. There is, you know, an interesting point of data. So if you look at Japan for the last 20 years, home prices have been essentially flat. Besides Tokyo, the only other place that they've actually increased are all ski towns. So Niseko, Hakuba, Furano, Nozawa, Onsen, Miyoko. Now you look at all these towns, they're booming. I mean, there's limited supply of ski homes. The foreign, the foreign investment is mainly driving that. So, you know, our bet is that hopefully our town could be one of those next towns. There's a few towns that I think could be those next towns. And, you know, hopefully we could pick one of those and I think ride that equity wave. Plus the good, you know, cash flow numbers that are already there.
- [19:12]
A
Once you guys have picked it, you let me know, I'll be first in line to, to grab one of these things. Nick, did you want to add anything there?
- [19:18]
B
No, I just. As you guys were talking about some of these free and cheap homes, I just. On our app, nipponhomes.complug I just typed in max price 100 and I'm scrolling and it's. I'm continuing to scroll, but there's no houses that I'm looking at that are even remotely something I would recommend buying. And then there's a ton that are basically free, managed by local municipalities. So if someone does have this urge to get a free, we can talk to the local municipality, wherever they are. We've talked to some of the ones in Otaru and a couple other towns. And, you know, you can get these houses for free, but you're sometimes on the hook to renovate them, which, I mean, obviously you would anyway. But yeah, I, I typically kind of steer clear of that. And it is definitely a little bit more bureaucratic once the municipalities get involved and sometimes they have to figure out who's buying what. I mean, this is kind of a funny story, a little bit off topic, but one of our early clients bought a pretty expensive home. It came with, I don't know, Derek, how far, how big was that? Like half an acre, I guess, of a mountain. And there was actually river, rivers flowing through that. And we had to get the mayor of Miyoko Kogan on a zoom call. And then our client had to write multiple letters, sign multiple documents that basically said they wouldn't touch that river because they make sake with it at the bottom. And I guess about 10 years ago, they had sold it to a group of French guys that signed the same documents, and they actually were bottling the water and selling it as, as like, Japanese sake water. So they immediately got kicked out. But this guy is actually, like, an environmentalist, and everything's been good so far.
- [21:00]
A
No need to apologize for derailing into a new, into a good story. I mean, that's what we, that's what we love on the show. So if you have any more, feel free to share them so on. I always thought, like, the free home thing would be just like an amazing YouTube vlog series. Like, hey, I just, like, we're literally just gonna do this, like, and I, I. It's kind of something I want to do with my kids just because, again, they're obsessed with, with Japan. But I'm, I'm interested to get your thoughts. Like, so the, the, the free home stuff and the ski home stuff, they probably don't intersect that much, right? Because the ski home areas are probably a little bit more in demand. Like, are you, are you getting these free or super cheap ones in the cool spots like you're mentioning?
- [21:37]
C
Yeah, so I actually toured a free one in our town because we had the same exact idea as you were. Like, if we could get this free home, it would be an awesome series. Like, hey, free home to Airbnb. Like, this was the whole process. I walked in the house and it was floor to ceiling mold in every single room. So I was like, you know what? This is probably not worth it. There was like, a house collapse next to it that was, like, leaning on it. So we just decided, you know what? This is probably not the best move.
- [22:04]
A
How much does the, like, you know, you mentioned, like, a house next to it that was collapsed and, like, makes me think of, like, a lot of these sort of, like, you know, Midwest US Cities that have sort of, like, had this, like, exodus. Maybe like Detroit, not present day, but like, 10 years ago, 15 years ago. But I know Japan is, like, known for being an exceptionally safe place. And so does it, like, does that location factor or like a. I mean, I'm thinking even like the, you know, like the areas around Fort Myers in Florida where there's like, some of those neighborhoods that have just been completely leveled by hurricanes. And it's, like, weird. Nobody Can. The houses are very illiquid because nobody wants to necessarily buy, like, the only house that's still standing in that neighborhood where everything is just kind of like, if I want. If I found a house that's, like, similar to what you're saying, but you would buy it. And, you know, everything else on the street or many other ones are, like, you know, vacant, and. And it's kind of like an abandoned neighborhood. Is that. Is that, like, a bad factor? Does that seem to dissuade people from buying or. Or, like, is it just such a common thing that there's so many vacant homes and it's kind of a little bit different than the way it's structured in the U.S. yeah.
- [23:12]
B
I mean, it's kind of a hard question to answer. It felt like a lot of questions in one.
- [23:17]
A
It is. I have a horrible habit of asking, like, 10 questions at once, so I can pick your favorite one.
- [23:22]
B
Okay, I'm gonna give you. My personal preference is typically not to buy on a street where I'm the only house actively maintaining my lawn or whatever. Right. I just don't really like the idea of, like, a vacant home. I actually just started watching that show Pluribus last night, and I had to turn it off because I'm just, like, scared of that.
- [23:44]
A
Yeah, I really like it, though. It's good. It's a good show.
- [23:47]
B
I'm gonna get through it. I'm just gonna have someone else with me when the next time I watch it. But, no, there are definitely areas. So we've worked with a couple guys that they were actually trying to. Similar to how homes are in Italy, like, completely vacant for miles. He was trying to buy, I don't know, 50 to 80 houses along this river, and it ended up falling through. Honestly, it was, like, such a huge investment, and it was kind of early on in our journey too, so it felt like it was the 80, 20 rule. Like, this guy's taking up 80% of our time. Maybe he's gonna only give us 20% of value. And both. Both of us kind of decided, hey, this might not be right for us, but I'm just not really a fan of, like, looking around those areas. So I don't have a ton of knowledge on that, but I wrote something down to tell you another story about this, and then I lost my.
- [24:39]
A
Sorry. Hopefully you're wherever I wrote it.
- [24:41]
B
Yeah. Well, Derek, Derek, do. Do you have anything to add to that?
- [24:44]
C
Yeah. Yeah. You know, I guess one of the questions you asked was, like, safety wise, so Japan is super Safe. So I don't, I don't ever worry about buying in a neighborhood that is like dangerous, that just doesn't, it just doesn't exist in Japan, which is awesome. I guess to answer your question, sort of is like, I wouldn't, there's a lot of towns I just wouldn't buy in because there's so many towns in Japan that are just emptying out. And there. Those are specifically the towns you can find really, really cheap homes.
- [25:12]
A
Oh.
- [25:12]
C
I guess there's areas I would completely avoid. But like in a town that I like, like the town that we're in, Otaru, I think I would buy a house pretty much anywhere in that town if it, you know, if it was nice.
- [25:25]
A
Okay, fair enough.
- [25:26]
C
If that, if that answers your question.
- [25:27]
A
It does, yeah.
- [25:29]
B
What?
- [25:29]
A
The towns that are emptying it. Why. Why are they like, what's. What makes the areas that you are buying in different from them?
- [25:36]
C
Yeah, yeah. So it's just, it's a combination of many things. It's a declining population, it's work. So like in the US we kind of have a lot of hubs where in Japan, like all the work happens in Tokyo. So all the young kids move to Tokyo. So it's a combination of declining population, kids moving to Tokyo, a real lack of immigration. And honestly there's stricter immigration rules are coming. So it doesn't. I don't think it's going to change. I guess what makes the towns different from us that we're investing in is that there's a ton of foreign interest. So that's like the big, the big difference is ski towns have a ton of foreign interest.
- [26:14]
A
Yeah, makes sense.
- [26:16]
B
Yeah. A couple examples if you want them.
- [26:18]
A
Yeah.
- [26:19]
B
Miyako Kogan just outside of Nagano. Nagano is kind of like a big transportation hub. I think it was the 92 Winter Olympics that were there and that's when like skiing was blowing up in Japan. There's, there was tons of ski resorts there. I think since then over 200 resorts have actually closed. We actually take our split boards up some of these abandoned mountains and ride down them, which is cool because, you know, they're like relatively safe because they used to be a resort, but there's a ton of Singaporean investment, Chinese investment, and, and just tracking that I think can give you like a leg up on where some of the equity plays might be. Another thing that we're tracking is where the Shinkansen railway, like the high speed train is going to be in the next five, 10, 15 years. That seems to be a pretty good indicator of towns that continue to at least see some sort of equity growth. And like Derek said earlier, we don't sell that, but it is definitely, like, in the back of our minds when we're making purchases for ourselves, at least. And we typically do mention it to clients, but those are just some things that I would recommend if people are interested to look up and just see, like, you know, weighing everything else involved in a town, weighing that in your decision. The funny story that I. That I thought about regarding, like, safety. Yeah, it's. It's just kind of crazy to me as a Westerner, and I live in San Diego. It's a nice area, but there's also a lot of crime. Right. But we rented bikes, actually, and he wouldn't give us locks. And I. I kept asking for locks. I was like, no, like, I don't want to lose your bike. I don't want to pay for this bike. Like, give me a lock. And he literally just would not let me. He was like, no, you're fine. Like, park it anywhere. And I mean, this was, like, very hard. Understand each other English and Japanese. But I just was like, okay. And we took it to one of the busiest little fish markets in town. There was, I mean, at least a thousand people walked by this bike, probably 5,000. And they were in the exact same place that they were. They were just resting up against the pole. And I don't know, like, that's the type of thing that I left my bike outside my house for 15 minutes and it was gone. So in. In the States, I don't know. It's just, like, so totally different.
- [28:30]
C
And remember, he, like, just. He just left. And he left his whole bike. He left his whole bike store open. He's like, just drop it off when you guys are done. So his whole bike store was wide open with hundreds of bikes just in this place that anyone could have just gone in and just stole all of them.
- [28:46]
A
So. So cool.
- [28:48]
C
Very nice.
- [28:48]
B
Awesome.
- [28:49]
A
Yeah. Yeah. That's very. It's like utopian. Right? You mentioned the language piece, and it was one of my questions. I. I have two more questions, and then we can. We can wrap up. So in regards to language, like, if somebody wants to buy a place and like, how much of. How good of a working language knowledge of the Japanese language do they need? Or is it like, you know, I've spent a lot of time in Europe, and I would say most European people have some working knowledge of English and are reluctant but will accommodate. Is it a similar thing there or is it mostly like Nick, you want to take it?
- [29:23]
B
I mean, I'm not going to say a whole lot. It's. It's obviously the more Japanese, you know, the better for sure. I think if you really plan on being there for long stints of time, like you definitely want to be able to be nice to the neighbors and just, you know, have quality like walk bys. Hey, how are you? Nice to see you. I'm having dinner tonight if you want to come over. Like that's a nice thing to be able to do. And I just think that's like super, super obvious. In terms of the buying process though. We have bilingual agents, we have bilingual scriveners which are kind of like escrow attorneys.
- [30:00]
A
Wicked names.
- [30:01]
B
Yes, scrivener.
- [30:02]
C
Yeah.
- [30:04]
B
But in terms of the buying process, you can be completely oblivious to Japanese and you'll be fine. I don't know, I just feel like people that are interested enough to want to buy property should at least be able to say hello, goodbye and like typical, you know, sayings.
- [30:24]
A
And what about like, what about more like in like in the retail environment and stuff like that? Like if I wanted to go to the grocery store, like I shouldn't have the expectation that I can have a conversation with somebody in, in English.
- [30:36]
C
Yeah, definitely don't.
- [30:38]
A
Okay.
- [30:38]
C
Especially in these rural areas, it's very uncommon to meet people who speak English.
- [30:43]
A
Okay. Yeah, makes sense. Makes sense.
- [30:46]
C
Tokyo, you'll be fine.
- [30:47]
A
Fair. Yeah, it makes sense. It's kind of like Europe as well. Last piece you mentioned Italy a little bit, Nick. And it's another area where we've done a lot of research on like there. Portugal and Spain seem to be like some of the more pop popular ones I think obviously like if it's not ski tourism, it's beach tourism for a lot of people. And that Italian brand seems to be really, really compelling for a lot of folks.
- [31:08]
B
Argentina kind of has some.
- [31:12]
A
In Italy, one of the things that I've noticed that that seems to be like at a relatively deep discount compared to historic sales is, is land like old farms and get like an old olive farm or maybe not a winery because they're like a little, a little bit more of demand but like an old olive farm for like pennies on the dollar compared to even, even what it's, you know, if you were to fire it back up and, and get the revenue from it. Is something like that possible in a place like Japan like to buy. And this is where it kind of becomes that selfish thing like my, my perspective on investing in, in a lot of places, like, I want to get the biggest piece of property that I can reasonably. Is that. Are there large parcels? Because I know it's, it's a pretty dense place, right? Like, can I, can I find a farm or, or big acreage there?
- [31:59]
C
It's really. Yeah, it's really uncommon. Is that what you're going to say, Nick?
- [32:03]
B
Well, I was actually going to say you can find it. Our business is really all. All around these, like, actual home listings. I mean, that's the data that we pull from. So I don't have much knowledge on big plots of land. I mean, Derek, that one, I think I took the call. It was about a month or two ago, and they had, they had acres and acres of land owned, you know, generationally by a family. And I think they just had this idea like, maybe we can work with Yuki Homes and sell some of the plots on this land and, and, you know, blah, blah, blah, blah. But then she never followed up, so. And it's not really our wheelhouse. So there are large plots of land in the middle of the country where no one really lives, but I don't have an intel on how to buy them, how to access them. You know, that's more like commercial. And we're focused pretty particularly on residential. Like, there are some apartment buildings, like multiple door listings that you can buy. But, you know, aside from that, I would just say I'm not the expert.
- [33:08]
C
Yeah, I would say that, like, when it comes to the commercial stuff, like Nick said, we don't focus on that. I guess my point was, like, specifically from a residential perspective, the lots are generally very small.
- [33:20]
B
True.
- [33:21]
C
Usually, like, the house takes up 70% of the lot, which is almost a benefit when you're Airbnb, because there is none of that summer. Like, because I have three Airbnbs up in Vermont at some ski resorts. And the summer bill for landscaping can, like, really add up. So I kind of like the fact that there is nothing. There's nothing to maintain in the summer. Sort of. To your point. Not really. Like, sort of a side note kind of with like, olive businesses and wineries. Is that the problem that's plaguing Japanese housing is also plaguing Japanese businesses in these small towns. So there's a ton of. Of small businesses that have no heirs. They sell for pennies on the dollar. They're profitable. Laundromats, bars, restaurants, those small businesses, like, they need people also to come and take those over. So that's. It's not something me and Nick know a ton about because we're pretty swamped with work on the residential housing side. But it's something we definitely want to learn more about because it's. It's pretty interesting.
- [34:17]
A
I might make you guys learn more about it if I come in to become one of your clients. I guess that just leaves me with one final question, and I think this will segue decently into talking a bit more about, like, where people can find your sites and all that stuff. So, Nick, you mentioned, like, you know, where you guys are aggregating data. So you take, like, listings. There's no, like, real estate board system there or, like, aggregator.
- [34:41]
B
No, there. So there are a couple.
- [34:44]
A
Okay.
- [34:44]
B
And maybe you had another four questions to add on to that, but I'm going to take it one at a time.
- [34:48]
A
Good. No, that. I appreciate you cutting me off, but no.
- [34:52]
B
So we aggregate listings from at home. Sumo, a couple other smaller Japanese listing sites. The issue with them is they're in Japanese, they're not plotted on a map, and they're just hard to navigate as a Westerner. So we aggregate all those. We have some AI engines running in the background, and we actually work. Our developer's name is Angelo. He's out of San Francisco, so I might be butchering some of this tech stuff, but basically he plots those all on a map. And honestly, you know, maybe I'm not allowed to say this exactly, but we essentially copied the look and feel of Zillow. So we call it, like the Zillow of Japan. And we're the only free service that does this that I know of. And yeah, that's called Nippon homes dot com. So that's like our tool. And then our consulting service, basically what we're selling every day and talking to people every day and helping you buy, renovate, rent is Yuki Homes. And you can find us Instagram, yuki homes japan, ukhomes.com and substack.
- [35:51]
A
And what's it going to cost me if I. If I hire you as a consultant to do that? Do I pay? Is there a. Is there a retainer? You pay a success fee, like a commission.
- [36:00]
B
It works really similarly to a success fee, but we take half up front and half upon closing. So we kind of block it out into chunks where if you want to buy a house from the start, to work with us to getting those keys is $3,900. So 1950 up front, 1950 on closing. And then once you have the keys, if you want to help renovation, and you know, it's very similar to the Western way of doing things, we charge anywhere from 10 to 20% of the contracting fee, depending on, like, the price, renovations, what you're doing, how much management that might take. So we just kind of make sure we're on top of timeline and stuff like that. And then if you do want to go the Airbnb route or the short term renting route, it's just a flat 25% on top of gross. Not on top of of gross. 25% of gross we take. And that's like our management fee, which is pretty standard for international real estate management.
- [37:00]
A
Do they have like, realtors and commissions there or no? Yeah, yeah.
- [37:05]
B
So legally we can't take any of that. We basically are what's called an intermediary. So we work with foreigners and help handhold, but you are working with our trusted real estate agents, and they get the commission. So doesn't matter what the price of the house is, our price stays the same. Derek, what's the percentage? I think you know, the exact percentage that a realtor might get.
- [37:25]
C
Yeah, it's. It's 3%, but there's a floor. So any home under 8 million yen, they set a floor 90% of the time. They set a floor at 330,000 yen, which is about 2 grand USD. And they did that to, like, incentivize people to go sell these cheaper homes. That's kind of the problem is that who wants to go work for a commission of 2 grand when you can go sell a 2, $300,000 house? Because those exist in Japan. That's another interesting thing is you'll see a $30,000 home next to like a $500,000 home. So it's a very interesting market.
- [38:00]
A
Find me some of those too. Yeah, I'm looking forward to chat. I'm looking forward to chatting further with you guys. Like, I definitely. This is something that I want to do at some point. So I'd love to have some further discussions and hopefully have you guys back on the show and talk more about this. I mean, I just want to be mindful of your time. This would be one of our longer episodes, which is a good thing. I've really enjoyed it. But I would, I would say anybody who's listening, make sure you check out Nippon Homes and Yuki Homes. I'll put the links in the. In the show notes as well. And yeah, hopefully, you know, as things progress and you guys are doing more deals and have more awesome stories to share, we can maybe have you on maybe on like a quarterly basis, just as like a Japan update. I think that would be sweet.
- [38:38]
B
Awesome.
- [38:38]
C
We'd love that.
- [38:39]
A
Enjoy. Enjoy the shred season this year. And if you ever decide you want to come rip some ant hills up in Ontario, Canada, you can give me a shout. Or if you're out, if you ever want to go out to wiss, I'd always be happy to do that, too.
- [38:52]
C
And you're welcome to come to Japan, man, anytime.
- [38:54]
A
I think I might have to take you up on that. Careful what you wish for. But, yeah, I certainly. I certainly. I certainly will be when. When I start this process. So, yeah, like, I'll. I'll. I'll reach out. Anyway, thanks a lot for your time, guys. Yeah. Hopefully have you back on asap.
- [39:11]
B
Awesome, dude. Thank you.
- [39:13]
C
Thank you very much.