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May 15, 2013 - 6:30 am

These guys are banking on you taking their guarantee for the next 4-5 years – you will, indeed, make 25% – they'll make much more – then, if and when everything blows over, as it likely will, you're left with nothing, and they're laughing all the way to the bank (because they haven't built these places to last much longer in any case, and guess how much less than your purchase cost it cost to build – profit no. 2). If you're really into that sort of potentially here today gone tomorrow type of investment, go for Aussie mining towns – you'll find building standards are more than slightly higher – and if you pick a good industrial zone, and not only mine-dependant one, you might even keep getting decent returns out of it when the mine dries up. 

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May 11, 2013 - 2:16 pm

Not at all actually, just limited personal experience and that of family members and acquaintances – my forte is japan, as mentioned. in aus, my impression was that good locations seem to net app. 3-5% pre-tax. Sold our last family property in caulfield last year, after 5 years of almost zero growth and 3.8% cashflow p/a (so yes, positive – just). didn't see the point anymore. That same money is now spread over 9 properties (so far more diversity and hedging) around Japan, making an average of 13% or so p/a, with far less tenant hassles (not that they're that bad here, but they're much better there). Capital growth may still be zilch, probably less, but I prefer the monthly income over the speculation plays personally.

Again, though, my experience in Aus is very limited, that's why I'm asking. I'm sure there are people out here doing better, so trying to learn more about how they're doing it.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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May 11, 2013 - 7:28 am

Totally with ya there, that's why we invest mostly in Japan, where the social fabric is probably the best you can get, or in non-tenant dependant forms in other countries…how do you get around the lack of cashflow in Aus though? I know Terry and others here mentioned sub-dividing (whole lotta work, but probably well worth it) or mining/industrial towns (which strike me as a bit risky as they may blow over within a few years) – any other ideas on breaking that annoying 3-5% pre-tax ceiling that seems to be the norm here (at least for the more attractive areas)?

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May 11, 2013 - 7:18 am

Good stuff, thank you.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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May 11, 2013 - 3:03 am

Cattleya – just curious – why do you think Australia (pretty wide area compared to London is better investment potential?

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May 11, 2013 - 2:57 am

Thank you for sharing this – can you please expand a bit on what kind of DD did your brother performed on these guys, if at all? Did he speak to existing (verifiable) clients? Did he check (verifiable) legal and financial references? Online or offline (verifiable) reviews etc? The fact that a company exists and is registered is, unfortunately, all but meaningless… Not meaning to harp on his pain, nor to imply in any way that what happened was his fault – sounds like these guys are shonks and should be taken to account in any possible way – but I can't help but wonder if he was aware of the need to perform all of the above checks, or others of similar scope?

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May 6, 2013 - 7:56 am

Can't open the file – sounds interesting, would love to have a peek and check out the differences/similarities to our own sheets.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 24, 2013 - 6:53 am

Great comments there, and oh-so-true. Not sure if we can be classified as a turnkey operator, being buyers' agents but also proxies, who manage the portfolio post-purchase as well – but going off our typical clients' list, these seem to be internationally savvy individuals who live in one country and invest in (usually more than one) other. To expect someone who has 15 properties in 3 different countries, to take a mild example, to perform a hands-on, ongoing search for deals, do the neccessary DD (which requires local knowledge in any case), negotiate the closing conditions AND manage the properties on a regular basis (not to mention exit strategies and implementing those) – is just impossibly ridiculous. If you're saying that no one who lives abroad should invest in any other country unless they plan to physically attend and "do it all" in person I completely disagree. I WOULD agree though, that researching your turnkey operators THOROUGHLY is a must – but once you've done that (financially, legally, existing clients, the works), it's a very good solution for remote investors – particularly those who, wisely, prefer to hedge and diversify their portfolios geographically and socio-economically. As for the price – we're not all ridiculously over-priced, and the amount of time and costly mistakes we can save newbies far, far outweighs the sacrifice of 0.5-2% pre-tax net yield – particularly if we can help you get those nice and safe 10-12% properties as opposed to the risky, nasty 5-9% you might have bought on your own.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 24, 2013 - 6:44 am

Brilliant textbook research and process, Joel. These are exactly the right steps one should take – and it also illustrates the importance of ground-work – once you've spent the time and money to lay down the infrastructure for all future purchases/sales and remote management and have the right people in place representing you, you can pounce on any good deal that comes along, wherever and whenever in the world you may be at the time. We did the same thing when we started out in Japan – spent a good few months in meeting, setups and research on the ground – and are now reaping the results for ourselves and our clients without having to set foot in a realtor's office unless there's a compelling reason to. Not that we don't visit regularly (we actually spend about half of every year there), but it's not for the purpose of, or under the pressure of, a due by date of contract signing, inspection, money transfer etc – more structured, scheduled visits for general management and upkeep, as well as to research and explore new areas.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 20, 2013 - 8:44 am

Incidentally, here are (finally) some good news from the region – shame it's just "a thesis" at this stage – http://en.rocketnews24.com/2013/04/20/fukushima-prefecture-produces-first-thesis-into-the-effects-of-internal-radiation-exposure-children-of-fukushima-unaffected/

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April 20, 2013 - 8:43 am

Not sure what you mean by "rely" – there are ways to verify potential advisors, professionals, business partners etc in every country – and also ways to verify your recourse in case things go south. Clients do this to us every day, and we do the same to others in other countries. "Jumping into bed" with anyone who sounds promising is extreme folly, but avoiding all foreign environments for fear of language or cultural barriers is the other extreme. Incidentally, speaking "the same language" didn't seem to do much good to those swindled in the US, as we've been reading here – I've yet to see myself, or anyone else, get screwed over like this in Japan, Singapore or Hong-Kong, for instance, to name just a few of those "scary foreign places" which are far more regulated and safe to purchase in compared to the US, to name one "comfy English country".

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 20, 2013 - 8:16 am

Or have (a) verifiable and accountable partner/s in place speaking that language 

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April 19, 2013 - 5:53 am

ten_burner wrote:

If your investing in the US these days it is predominately a cash-flow play. Yes there will one day be CG but, I would not focus or

spend a lot of time attempting to pick when that will be.

Thank god for the voice of reason. And not just in the US, anywhere in the world. On the upside, there are sooooooo many great cashflow deals in so many countries because of the flocks of speculators who ignore them and buy "that super-duper-prime-location minus 5% negatively geared but hey wait for that growth to hit". More and more of these buyers every year, in spite of everything, all leveraged to the gills – causing bubbles and mini bubbles to burst again and again and economies to take more and more hits – and producing even more great cashflow buys year after year. Personally, I'm loving it.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property

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April 19, 2013 - 5:46 am

I'd completely disagree on the second tip – why on earth would I want to pay double finder's fee (if not much beyond that)? I'd much rather invest (much less) in finding one good local agent in my destination country. The first and third tip, as well, seem to be mostly relevant to purchases for personal purposes, as opposed to investment…the rest of the advice, although so general as to be almost meaningless, is at least sound, from my perspective also. Wealth of information on buying overseas here – http://itunes.apple.com/us/app/rei-wealth-mag/id552053319?ls=1&mt=8%29 (ipad only, unfortunately).

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 19, 2013 - 5:36 am

On the upside, we've been seeing some delightful condo units and even holiday houses, at very attractive prices in and around Niigata, just west of Fukushima, and even as far as Hokkaido, to the far North. If a getaway home on the slopes was always your dream, now could be a good time – providing you're not bringing the lil' ones with ya, and are over 55  (Mod, this is meant as a joke, not advertising  Real listings though.)

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 19, 2013 - 5:27 am

Sounds like a great project, best of luck

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 9, 2013 - 12:21 am

There's no "end", Freckle, it's cyclic. No one in their right mind invests in real-estate for a 3-year "hit" (barring flippers and short-salers and serious gamblers). When times are rough, we buy, and cash in when things recover, to start all over again, locally or abroad. You're apocalyptic view of events in this case, as it was and still is with the US market, is to spread panic and doomsday visions among those leveraged into those markets with every up, down, top and turn. Maybe it's a cash investor thing, but we don't see these cyclic fluctuations as something that makes a huge difference in the long run.

Here’s a more rational view of what’s happening atm – http://www.reuters.com/video/2013/04/08/reuters-tv-22-year-jgb-bubble-may-be-about-to-burst?videoId=242103887&videoChannel=117766 (I know, I know, they’re all idiots if they don’t share the “oh woe be upon us, the dark pits of financial hell are spitting hellfire, the end is nigh” philosophy you exhibit every time a currency fluctuates anywhere in the world or economic turmoil kicks in.

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April 8, 2013 - 6:41 am

From a web commenter – "…The BOJ and the Finance Ministry would love a panic. That way they could buy the bonds back cheap. It is a shakedown of foreign investors and I think it is hilarious…" Interesting times.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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April 5, 2013 - 5:38 am

You've truly digressed there, Freckle.

sorry to have been away for so long, can't really take an awful lot of time to comment, as we've been quite busy. For better or worse (I know which side of the assumption you're banked on, don't answer that one), equity money is moving to real estate for lack of dividends, and Asia real estate money is moving to Japan for fear of more cooling measures (and a few other places – see here – http://www.pwc.com/us/en/asset-management/real-estate/publications/emerging-trends-in-real-estate-2013.jhtml), and we're happily copping it.

rents in Tokyo are on the up, vacancies on the drop, and Fukuoka city, where we and our clients have been purchasing extensively since 2011, is one of the first cities in the country to experience land prices on the rise again finally. Not sure where that rise will end up on the two-decade scale, but on the short term, five year scale it's the best we've seen.

Abe's attempt to kick-start growth through inflation, with fanfare and printing machines at full steam, may be crude, but not really that different to the rest of the world's best efforts and, considering his efforts to negotiate Fukushima fallout (spreading it all over the country to "share the burden"), is probably doing the best he can to just keep exports going with the yen pressed low, while generating enough head winds to possibly live up to his inflation target by 2015. I honestly don't think he (or anyone with half a chance at becoming PM in his stead) can do much more without some handy crystal ball in their back pockets.

interesting times but, for those of us vested in property, Japan's super high yields and the potential for a true revival if the property markets finally bottomed out, coupled with the unbeatable reliable and honest tenant and business environment wins hands down (not over your methods, I know, just for the rest of us RE geeks out there).

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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February 12, 2013 - 7:19 am

Wow, it almost looks like global economies have ups and downs, like any cyclic construct. Truly revealing.

sorry, still in transit, promise to be back with a vengeance next week…thanks for keeping the thread alive, Freckle.

Ziv Nakajima-Magen | Nippon Tradings International (NTI)
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Ziv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property