Investing in Residential Assisted Living (w/ Isabelle Guarino)

Ever wondered how you can make a profitable investment while making a positive impact on the lives of others? Tune in as we welcome Isabel Guarino, COO of Impact Housing Group, who shares her incredible journey from the corporate world to revolutionizing the Residential Assisted Living (RAL) industry. Discover how Isabel's personal family experience with assisted living led to a thriving business dedicated to providing high-quality care for seniors. We'll discuss the logistics behind owning and operating RALs, the crucial role of licensed administrators, and the skyrocketing demand from the aging baby boomer population. 

Imagine turning single-family homes into deluxe assisted living facilities with amenities like private bedrooms, libraries, and even hair salons. Isabel demystifies this lucrative investment opportunity, addressing common misconceptions about liability and highlighting the benefits of smaller caregiver-to-resident ratios. Plus, get a glimpse into the future of assisted living with exciting advancements in technology and medication management. If you're eager to learn more, Isabel provides valuable resources through RAL Academy, offering free webinars, books, and more. Don't miss this chance to explore a venture that combines financial success with meaningful impact.

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Transcript

Speaker 1: 0:29

What does it really mean to be Wealthy AF? Is it just about the money in your bank account, or is there more to it? This is Wealthy AF, your ultimate guide to understand what it truly means to be Wealthy AF. And today's guest is Isabel Guarino. Isabel is a COO of Impact Housing Group. She trains and coaches entrepreneurs and investors at the Residential Assisted Living Academy. With a background in business, marketing and communication, from interning at Walt Disney World to working at two Fortune 500 companies, she is a true leader in business development and operations. She is a sought-after coach and trainer for all things. Raoul, I needed to know what RAL was. What is it? Assisted?

Speaker 2: 1:15

Rental Assisted living yep.

Speaker 1: 1:17

Rental assisted living. Isabel's mission is to positively impact 10 million people through residential assisted living and carry on her father's legacy by training investors and entrepreneurs on how to do good and do well. Isabel, thank you so much for coming on the podcast. It's my pleasure to have you. I'm excited to have you.

Speaker 2: 1:37

Thank you for having me. I appreciate it.

Speaker 1: 1:39

So tell us, first of all, this journey. I know in your intro we talked about your dad doing your dad's legacy. You worked at some Fortune 500 companies. Tell us that story. How did you? Are you taking? You've taken over your dad's company.

Speaker 2: 1:54

Tell us that story. Yeah, we got started in this industry because my grandmother needed care. She fell and broke her hip and she needed assisted living, and my dad had been a real estate investor for 30 years up until this point, and so when we were looking for a place that was suitable for her, everything was like disgusting and expensive and the care was terrible, and he was like wait, wait, wait, wait, wait. I think we can do this better. So he found an existing RAL, purchased the real estate, purchased the business up and running day one with the intent to move my grandmother in. She passed before we can move her in. That was 14 years ago. We've now added two more, so we have three cash flowing RALs in the portfolio and we've taught thousands of others how to do this. My dad passed in 2021. And so the business of teaching and training people how to do this, as well as his three RALs, passed down to me, and so I've been continuing the legacy, sharing with other people how to invest in this niche.

Speaker 1: 2:54

That is a really, really cool niche. It really is. So let's start talking, let's start basics right, because we have some real estate investors that listen to us. I'm a real estate guy, as I mentioned to you off air, I own a bunch of apartments, but I'm in the residential space, in the multifamily space, not residential multifamily rental space and, as a matter of fact, I was mentioning to you off air, there is right now a building that we're looking at purchasing and it's a redevelopment and it currently was operating, I think, as a residential assistant.

Speaker 1: 3:25

And when talking with my property manager, we were looking at, hey, what will we do here? We were, you know, converting, we were looking at it as a conversion to multi. But my property manager was like, hey, we can run this as an assisted living, why not? And I'm like, oh, why not? Well, for starters, I don't know much about it. I don't know how to right. I know multifamily, I know that space, I know how to do that game. So what is residential living? And how do you own the real estate and then the business? Because I can buy the real estate and rent the business out to another operator. You can't do that.

Speaker 1: 4:04

Those are two different skills. So how did your father transition from being a real estate investor to now being an assisted living owner operator and owning the real estate?

Speaker 2: 4:16

So within real estate, if you have a multifamily property or a single family investment, you probably have a property manager. You're more than likely not doing both of those roles. It's the same thing with residential assisted living. You're hiring a licensed administrator who's going to run all the day-to-day within the home. They hire fire train onboard your caregivers who are doing the 24-7 work within the home right. They're doing the marketing, the touring with the new families, intake of the new residents, dealing with all of the day-to-day. You own and operate the real estate and the business. So you're working on, not in the business.

Speaker 1: 4:53

Higher level Basically yeah, higher level.

Speaker 2: 4:55

That's how you get there, just like you do with real estate.

Speaker 1: 4:58

So it's basically, it's almost the same thing. The only thing is, I need that one key person. You need that one key person to be your manager per se. Okay, so, let's talk about why. Okay so, let's talk about why. Invest in this niche. Tell me, why is that a niche that you think it's?

Speaker 2: 5:18

good to invest in. Well, currently, the silent generation is who's living in assisted living, and there was only about 40, I think it's 46, 44 million of them, the silent generation.

Speaker 1: 5:29

I never heard of the silent generation that's before the boomers, pre-boomers. Yeah, okay, okay.

Speaker 2: 5:37

That's who's currently in assisted living, but the boomers they're just approaching, needing care and assistance and that's going to be a 20-year wave of people coming into this industry. We're currently 1.3 million beds short and there's 76 million baby boomers. So we're almost doubling the amount of people who need care and assistance and we're 1.3 million beds short, projecting that we're only building 50,000 beds per year. This is a massive crisis, a huge supply and demand issue that our entire country will be facing, and it's not even the country. It's your family, right? Like who's going to take care of your loved one if and when they need care.

Speaker 2: 6:20

You know, in-home care is incredibly expensive. Most of the large facilities are terrible. This is that perfect in-between. If you can't quit your job to go take care of your loved one full time which many people can't and if you're listening to this podcast and you're wealthy AF or trying to become wealthy AF, you're probably not looking to quit your job to go care for your loved one full time. So having this cash flowing business and a place for your loved ones if and when they need it is kind of a dual solution right there for many people.

Speaker 1: 6:52

Wow, what a wonderful niche. You know there's a podcast I listen to and I don't know if you're familiar with these guys, the real estate guys. Yeah, Really good guys.

Speaker 2: 7:01

Russ is dating my mom actually Really.

Speaker 1: 7:05

Yep, okay, so they had a. There was a podcast. I heard one of their episodes and they were talking it might've been you guys, I don't remember. It might've been you guys they would talk about about realist, about assisted living, and they would talk about this data and I was like what an amazing niche and what a tremendous opportunity there is in the marketplace to serve that niche. Right, yeah, it's similar to what's currently happening in our country with the shortage of housing, right? So so currently we have and I think that problem you mentioned is going to exaggerate, it's going to just just just 10x, because currently we have, depending on who you talk to and I I love to listen to russ those guys are really smart guys.

Speaker 1: 7:52

Is he that smart in real life? Because those guys, those guys are just sharp man. Every time I listen to those, those guys are really smart guys. Is he that smart in real life? Because those guys are just sharp man. Every time I listen to those guys, it's like shit. I feel like I'm smarter just for listening to them. I'm like man, I just got smarter just for listening to them.

Speaker 1: 8:06

But, depending on who you're listening to, there's a shortage of housing. There was a shortage of housing 3.5 to 4 million units right Now. We just added 6 to 10 million immigrants into our country, right, depending on who you listen to, 6 to 10 million immigrants into our country in the last three years. Now we have building permits down. We don't have a lot of building happening because of the cost of money. So it's the logic, right? The common sense logic is hey, that number is just going to get worse because those people that came in it's the same thing that's happening in the housing. So housing shortage is going to just get worse. Housing rents are going to go up. Prices are going to continue because there's going to be more pressure on the net, but it's going to be the same thing there because these people are also going to age and who knows what age these people are, and so on and so forth split style.

Speaker 2: 8:58

But people can no longer afford to just have a family living in a home. The rents are sky high and many people can't afford that. So they are doing more of a co-living environment and we're seeing that in senior housing as well. They don't want to be in this big facility type environment, but they can't stay at home. They need that care, they need that assistance. It's that perfect in between, right there.

Speaker 1: 9:33

So where do you see the best opportunities? And the biggest opportunities is about to invest in assisted living.

Speaker 2: 9:41

You know, like location wise. I always say this like raise your hand if you're getting older or know someone who is right. We're all aging and there's going to be a need for care in every market. But with residential assisted living we're really looking for more of a suburban area where the average age is 50 to 70 years old. They're making twice the median income and they're typically a homeowner, a college grad. They're more affluent. That's not the senior moving into the home, that's their adult children, because many times they're the ones footing the bill for their elderly loved one. So you want to be close to them because they don't want to drive 45 minutes down the road to go visit mom or dad. So demographics is key with RAL.

Speaker 1: 11:49

Ah, that is powerful. So let me ask you this so you're basically saying that you want to build them where there's some, there's affluence, basically 50 to 70. I'm thinking about where I live and where I move. I haven't seen one there, right? I'm like, oh, I'm just the brain is going right, Like, hey, maybe I should create one there, Um, with with people with college degree.

Speaker 2: 12:13

Well, let me ask you this the area where you live, are there any big box facilities? Brookdale Sunrise's Atriums.

Speaker 1: 12:21

What are those hospitals? Big box.

Speaker 2: 12:23

It's a large commercial senior housing facility.

Speaker 1: 12:27

No, I haven't seen any, but nearby, I'm new to the area so I just moved to Florida. So I just moved to Tampa and I'm in a sub-market of Tampa Right now. I just moved to Tampa and I'm in a sub market of Tampa. I'm not right now. I'm not in Tampa. Right now I'm in my mountain house in Pennsylvania, my second home here. I don't know the area that well for me to speak intelligently, because I've only been there four months.

Speaker 2: 12:46

Yeah, okay. Well, tampa in general, you definitely have a lot of older people in Florida, no matter where you are right. Tampa's got a lot of affluence but they are skewing younger because people are moving there because of the amazing public school system, with Tampa in particular. So you are getting a lot of that 30 to 50. We're looking for that 50 to 70. So I'm sure there are certain pockets of Tampa where you will have a higher 50 to 70 affluent, but there's a lot of affluence in Tampa regardless.

Speaker 1: 13:15

You guys are a booming market, so definitely A lot of money going to Tampa. Yeah, what are the most important numbers to look at when considering investing in route?

Speaker 2: 13:28

The biggest thing that I always look for is every market has a maximum amount of residents you can have in a home, so it typically ranges between six and 16. For example, the state of Texas says you can have 16 residents in a home, but Dallas says eight, but right outside of Dallas says 12. So I want to go to the maximum amount that I can have. I'm in the Phoenix market. We're allowed to have 10 residents in a home. Anything that's six or less is really not going to be profitable. So I want to be in an area where it's six or more particularly, 10 or more is even better. So if I was in Texas, I'm not going to go to Dallas, I'm going to go right outside of Dallas so I can have that 12 to 16.

Speaker 2: 14:11

And that's really a key because each person who's moving into the home the average rate in our country today is $5,350 per resident. So if you have 10 people at let's call it 5,500, that's 55,000 coming in every single month. Your mortgage is 10K, expenses to run the home 35K. Your cash flowing 10K a month on one home that you're working in maybe five hours a week, visiting every other month like you're not there, you're not doing the work. That's a.

Speaker 1: 14:43

Thing that's a great thing, that's a great business model. So, so let's talk about that, let's talk about those numbers. When you say a home, just educate me because I, you know, treat me like I'm a novice here, because I am. So when you say a home, they allow six people in a home. You know, as we're having this conversation, I got a text message a week ago when I got here to Pennsylvania, from a guy that operates a small assisted live. He got my number. He know, he knows in the market, in the tampa market, and he got um, he's got a house where he's operating an assisted living facility type, but he's putting it in a house. Can you elaborate? Is that what you mean he has? He was giving me the description I'm selling the business with whatever, with the real estate. I think he wanted 450, I just got. I was like I just got here. So I think you know and I don't really understand it too well. Can you explain that to me? Were you saying six people in a home, 16 people?

Speaker 2: 15:37

It is a residential home. It's in a single family neighborhood. You probably driven by a thousand of them, you just didn't know what they were because there's no big sign out front. It's not commercial, it's not a facility like you may know and be familiar with. It's a literal residential home and so these homes typically are larger homes. And that's why we're looking for the more affluent area, because we want 300 to 500 square feet per resident. So if you have 10 residents, minimum a 3,000 square foot home, upwards of 5,000.

Speaker 2: 16:11

Most of your residents want a private bedroom, private bathroom, so you're not going to easily find a 10, 10 on the market. But you can convert a six, five that's 5,000 square feet to a 10, 10, right. So buying that home, converting it to become appropriate for assisted living, you're still having the living room, the kitchen, the dining room, maybe even a library, a movie theater, a hair salon. These are nice homes in upscale parts of town, but they are single family residential homes. They're zoned residential and the seniors living in there they're receiving 24-7 care. There's caregivers who are doing shift work, taking shifts to cover 24 hours a day. They're medication management, they're three meals a day, helping them with bathing, toileting, getting out of bed, doing activities, all the different things that they need to do to live life.

Speaker 1: 17:01

What are the biggest challenges? Let's talk about the challenges. What are the biggest challenges and rewards with working in the senior population?

Speaker 2: 17:09

You know, everyone thinks the biggest challenge is going to be liability, and it's something we should touch on because I think people are really afraid of like what if someone dies in the home? You don't go into assisted living for fun. Like, you're going in because you can no longer live alone. Like this is end of life care. The average stay is three and a half years, but most people about 90% will pass in the home. This is not rare. This is very normal. This is the industry that we're in, so it's not a shock to the family when a senior moves in and then they pass a couple years later. Like this is this is life. Right, people are going to pass, but you want to do everything to protect yourself as a business owner, because there shouldn't be any malpractice, any abuse, any things like that.

Speaker 2: 17:57

In a large facility the ratio is typically 30 seniors to one caregiver. In our care homes we recommend a four to one or five to one ratio. The quality of care is already so much greater. The neglect, the abuse, the being left alone for hours on end because there's just not enough staff. That's not happening in our homes. Because they can actually have their eyes on the residents at all time. They can help them when they need it, right away. It's not like a sorry, there's 10 people in front of you. I'll be there in three hours. That's what's happening in the big facilities. It's. It's wrong. They should be illegal and shut down right.

Speaker 2: 18:36

People in this country do not care about seniors the way we care about children or other people. It's sick, and that's why I love this, and that's also, on the other turn, what's so rewarding about this. Because I know that what we're doing is the best options for seniors. And if nobody cares about seniors, guess what they care about themselves? You're going to care about yourself when you're getting that shitty care when you're older and you're going to be pissed about it and now it's too late. So I care now because I want to help my family, my community, everyone else that I can, to show them there's a better option. And if you create one for yourself now, you have a solution. You can cash flow in the meantime, your loved ones can go there when they need it and you don't have to leave your kids a burden. You get to leave them a blessing, and that's really cool.

Speaker 1: 19:24

That is very, very cool, very, very cool. What do you see, if any? You're a young person. So technology is impacting many different areas of the real estate investing business, right With AI. What impact do you see in the future that technology will have in the assisted living business?

Speaker 2: 19:48

There is so many incredible new things that are coming into the market and I love to see them. There's amazing activities companies like Tover Toffle, which is basically this overhead projector that plays thousands of games that the seniors can play. They can do puzzles, they can do whack-a-mole, they can do all sorts of really fun stuff. A lot of our homes have the VR goggles so the seniors can go back to childhood homes or go on a hike in the Himalayas. It's amazing. And then all the way down to EMAR systems, most of these homes were run mom and pop style, so people were doing their books by hand, their medication forms by hand. Guess what, if you're tired and you forgot to write that Julie took her two pills at 11 pm, or whatever, things get messed up quick.

Speaker 2: 20:36

Now everything is turning electronic. They're turning more techified and I love that. Systems that are distributing pills and counting and marking it all for you. All the way down to wearable tech. Seniors are doing like. It's kind of like an Apple watch, a Fitbit or whatever, and they can literally wear it. It geo-tracks where they are in the home. When you press the you know fall and I can't get up, or whatever button, the caregivers can find where they are in the home without them having to know, because it's tracking them at all times and it tracks how long it takes a caregiver to get to the senior. It's tracking their UTIs, it's tracking if they fell. If it falls quick, it alerts right away, right. All sorts of amazing things we can basically predict when someone's on their way out, based on all the information right there. Incredible tech tools are coming to market and I only think it's going to help improve our industry at large.

Speaker 1: 21:33

That is amazing. That is really really cool how you guys are using that. Wow, my mind is blown by that. Yeah, I remember that commercial. You said I fall and I can't get up commercial. I don't know if you're old enough to remember that commercial the little button thing and the lady in the stairs. But man, that is really really awesome stuff. As it pertains to investors, let's say that we have an investor listening right now. Are you guys doing syndications? Are you guys raising capital to buy new assets? How do you get? Let's just say, maybe we have a passive investor listening right now and they're saying, hey, man, this sounds cool, sounds like a really good niche and it'd be something I'd be willing to invest in. Is that something you guys are doing? Are you guys syndicating right now?

Speaker 2: 22:20

So what we do at the Residential Assisted Living Academy is we train people how to do this. For the last 10 years, we've been the nation's number one education company on this industry. We've trained thousands of people how to own and operate these homes, as well as invest in these homes. So because we're having these trainings, we're getting hundreds of new owner operators in and guess what? They need Funding.

Speaker 2: 22:43

So, if you are an accredited investor and you're listening and you're saying I don't want to own the real estate, I don't want to operate the business, but I want to invest in someone who's going to do this, we have a private lenders list and we grow that list with all the different events and podcasts and things like this that I do. We get people who reach out and say I want to be on that list, I want to be in touch with your students who are going to do this the right way, who are going to have great deals, who are highly educated in this and that's really cool right there. So if you're listening and that's you and you want to, you know, be on that list and be a part of it, you can definitely reach out to us, because we're always looking for amazing investors who want to work with our top tier students.

Speaker 1: 23:25

Yeah, which was my, which was my, my. My final question is, isabel, if people wanted to, so if we have some, some some, maybe operators that want to learn how to operate and sign up for your course, how do they find you? Or if we have that investor that's saying, hey, I'm good at what I do, so I'm going to definitely talk to you, I'm good at mine. I don't want to just start spreading myself thin. I prefer to invest in passively. I was just talking to someone so interesting, interesting story that you mentioned that I was just talking to a buddy of mine and he owns. His niche is this was maybe an hour ago. His niche is college student, student housing.

Speaker 2: 24:07

Yeah.

Speaker 1: 24:07

Student housing. He owns a bunch he's buying. He's closing on an 18, 18 unit apartment building today. As a matter of fact, he was going to the closing today and he was turning it into 56 beds, or something. You know. He speaks that right that he was turning it. It's 18 units and he's turning it to 56 beds, whatever that means. I know that's how they calculated. That's their equivalent of our doors, right?

Speaker 2: 24:30

Yeah, yeah.

Speaker 1: 24:32

In the multifamily. So and we were just talking about that he was like man, you know, the older I get in this business and the more seasoned I get, I realized that the people with the best roles in our business is not the operators, but it's the investors. I just want to be an investor. Or he was like so when you have your deal, your next deal, call me, because I'll just deploy some of my capital into your deal, Because we know what that goes along with it. Right?

Speaker 1: 24:55

Some people, they want to scale up and some people just, hey, man, I have the money, just give me returns on my money. So I was like, yeah, there's the rules, and the rules I learned what my mentor told me was wholesalers is at the bottom, flippers are next, then buy and hold is next, and then at the top of the pyramid is a lender. He who has the money makes the rules from the old adage from the richest man in Babylon. So I'm one that would like to deploy some capital and talk to you about that privately. So if people wanted to get a hold of you, how would they connect with you? Where do they find you, Isabel? How do they sign up with you guys?

Speaker 2: 25:36

Yeah, we've got free webinars, free books, or you can schedule a call with me or the team at ral101.com or you can follow us on social media at RAL Academy.

Speaker 1: 25:49

Thank you so much for coming on, Isabel. This was great. Learned a ton from you and I'm sure the listeners got a lot of value from our conversation.

Speaker 2: 25:56

Thanks for having me.