All Forum Posts by: Keen C.

@Alex Chin Thanks for the insight, great to hear from another investor that's lived in the area.  Will take a look at Rainier Valley to get a comparative sense of what's available and circle back to you.  Thanks!

Hi BP,

I'm an out of state investor looking at purchasing a single family house as a rental property in the South Beacon Hill section of Seattle, WA. Does anyone from the area have any opinions/feedback on the area they could share and also what sort of cap rate would be reasonable for such a purchase?

As a follow-up to the above, for home mortgages the 3 major Japanese banks have lowered 10-year fixed rates to 1.05%, with some of the internet banks such as Sony offering even more competitive rates at 0.05% variable rate.

Negative rates have already happened here in Japan, as of yesterday. Immediately apparent was the effect on REIT liquidity prices and the weakening of the yen. Whether or not the negative rates set by the Bank of Japan will trickle down to consumer rates at the individual level is a totally different question.

Banks have the option to decide how much interest they charge the consumer, and they might either lower rates so that consumers will borrow because the bank is essentially being penalized by having money in the bank.... or (even if unlikely one can argue that) the bank might charge higher interest rates to the consumer in order to make up for the penalty of keeping money in the bank since negative rates do not mean bank reserve requirements disappear.  

Taking a step back, there's also the question of the percentage of the consumer loan market vs the percentage of the corporate loan market; e.g. it would probably make more sense for banks to pass the lower rates to businesses (bigger loans, more "rational" decisions, comparatively higher transparency, more collateral, etc) rather than individual consumers.

Would love to hear what other BP'ers think; either way what happens in Japan in the following months will be an interesting one to watch...

@Dominic Jones

Hi Dominic, encourage you to have a read through the link below:

http://japanpropertycentral.com/2016/01/ota-ku-to-introduce-relaxed-letting-rules-from-today/

@Dmitri L. Thank you so much for the detailed response and apologies for the tardy reply.  Actually, had thought I'd followup with you at the meetup last week, unfortunate we didn't get to meet.

• Osaka happened the way it did simply because it was a "packaged deal" sourced through the "usual suspects."  That said, the location wasn't bad since it was just 1 stop away from Umeda Station, within 3 mins of the closest station, and had a decent yield, so I just went for it.

Separately, have you (or any other BP'ers) looked into the below?

• chintai heiyou juutaku 賃貸併用住宅 wherein you can obtain a personal housing mortgage loan at <100bps to build an apartment with multiple units on the condition that you live in the building and occupy greater than 50% of the area?
  
• Acquiring a semi-occupied property with the intent to Airbnb the vacant units, either directly or through an Airbnb service provider (wherein they take 25%-33% of the Airbnb rent as a fee)?

Yes, same here! Great meeting everyone, learned quite a lot. Looking forward to the next meetup already!

@Dmitri L

I've like to join too, please put me down!

Thanks Bill, didnt know that regarding 1031 Exchange for foreign properties!  

1. However, Japan already has a tax treaty with the U.S. which would allow the investor to avoid double taxation insofar as tax returns are correctly filed in both the U.S. and Japan? 

2. Thus, the 1031 Exchange of foreign properties seems like it would be utilized only if the foreign country where the foreign property is situated does not have a tax treaty with the U.S.?  

3. Bill, you tell me a bit more about which foreign countries your firm most regular encounters when administering such 1031 Exchanges of foreign properties?

Finally, I am in no way a tax expert, so please correct me if I am wrong on any of the above!

 Thanks Dominic; doesn't seem like there's a shortcut around the tried and true refinancing approach... seems like the U.S. is the only country that allows these 1031 exchanges!