Agents Building Cashflow

EP 160: Capitalizing on the Senior Care Boom - Residential Assisted Living with Isabelle Guarino

• Isabelle Guarino

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Residential Assisted Living Academy’s leading lady, Isabelle Guarino, shares her expertise on real estate investing particularly in the realm of residential assisted living. Isabelle discusses the growing demand for assisted living as the senior population rapidly expands, highlighting the benefits of smaller, personalized care homes compared to large institutional facilities.

She delves into the various ways real estate investors can enter this lucrative market, whether by purchasing existing properties, converting homes, or even building from the ground up. Isabelle also provides valuable tips on regulatory considerations, staffing, and marketing strategies to ensure success in this niche.

With the market for senior care set to explode in the coming years, this episode is a must-listen for anyone interested in real estate investing or in providing meaningful care to the elderly. Tune in to discover how you can capitalize on this unique investment opportunity while making a positive impact.

Key takeaways to listen to:

  • Understanding the lucrative potential of residential assisted living investments.
  • Four strategic ways to enter the residential assisted living market.
  • Implementing compassionate care while ensuring profitability.
  • Identifying ideal properties for assisted living conversions.
  • Leveraging community needs to drive investment decisions.

About Isabelle Guarino

Isabelle is a graduate from Arizona State University, a former flight attendant, Walt Disney World intern and now Residential Assisted Living Academy’s leading lady. She has been working as the COO of the company for the last 10 years, keeping everyone in line and on task. She's been featured in many magazines and articles on the topic of Senior Housing and most recently was given the title as one of the "Top Influencers in Senior Housing". Isabelle also won Aging Media's "the Future Leaders of Assisted Living" award twice in 2020 and 2024, being 2 of 100's under 30 to make the list.

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[00:00:00] Isabelle Guarino: There's 10, 000 people a day, turning 65, 4, 000 people a day, turning 85. Currently the silent generation lives in assisted living. It's not the baby boomers yet. We're just starting to see the oldest baby boomers enter the market. The next 20 years, we are doubling the amount of seniors who are going to need home care and assistance.

[00:00:19] Isabelle Guarino: And we are currently right now, 1. 3 million beds short. 

[00:00:23] Intro: If you're a real estate agent earning 200, 000 a year, and you want to grow your passive income, this show is for you learn secrets, other agents use, and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities, so you can take your commissions and turn them into cashflow.

[00:00:43] Intro: Here's your host, Randall. Let's dive in. 

[00:00:46] Randal McLeaird: Hey folks, welcome back. Today's guest is going to talk all about assisted living, care homes, and residential assisted living. We had to have a schooling because I was saying it wrong. So Isabel Guarino is [00:01:00] leading the charge essentially on these residential assisted living facilities.

[00:01:04] Randal McLeaird: And she walks us through exactly how she got started, what she started doing, why she got into the business. And then how you can get started as well. She has a coaching program. She's been the advocate. It seems like the mouthpiece and the speaker for. Small individuals going out and buying these homes rather than just the big boxes going out and buying them.

[00:01:23] Randal McLeaird: And so she talks about why, and it's a great conversation. So if you're interested in assisted living and you want to know more about it and why this is a great time to start buying assets and working on properties and real estate that is dedicated to the massive tide of aging population that we have in the United States, then this is an episode for you.

[00:01:43] Randal McLeaird: So. We're going to get a lot of the show, please go on rate and review wherever you are. It helps us a ton bring on awesome guests. So here we go. Let's jump in the show. Well, Isabel, thanks for jumping on. It's awesome to have you on the show today. Talking about air homes and residential assisted living.

[00:01:57] Randal McLeaird: We just had to have, she had to educate me off air a second [00:02:00] ago because I didn't know what I was talking about. So that's what you're here for. You're going to educate us today. So thanks again for jumping on. I'm excited. I'm 

[00:02:05] Isabelle Guarino: glad to be here. Thank you for having me. 

[00:02:08] Randal McLeaird: Why don't you go ahead and tell us what it is that you're working on and kind of the history on how you got into assisted living in general.

[00:02:15] Isabelle Guarino: Yeah. So I currently own and operate three residential assisted living homes here in the Phoenix market. And then I train other real estate investors, real estate agents, anyone who really wants to get involved, medical professionals, you name it, how to own and operate their own care homes as an investment property.

[00:02:33] Isabelle Guarino: So I love doing that. And we got into this business because my own grandmother needed care. She needed housing. So we were looking for a place for her. Nothing was good. Everything was expensive with waiting lists. They stunk. The food was bad. The care was bad. It was like, this is the options. And, uh, my dad had been a real estate investor for 40 years at that point.

[00:02:53] Isabelle Guarino: And he did quick math and realized, wait, wait, wait, wait, wait. I'm going to pay 5k a month for her to live in one of these, or we could own and operate the [00:03:00] real estate cashflow 10 grand a month, and she could live for free. So not knowing what we were doing, we purchased an existing residential assisted living home because we found that the care and the quality was just so much better in a residential setting.

[00:03:14] Isabelle Guarino: And the rest is history. Now we've got three and moving from there. 

[00:03:18] Randal McLeaird: How did you get through the regulation though on the front end? Because that's what I was talking to you about a minute ago. It was like me and a buddy, we were going through looking at it in San Antonio or Texas, it's dads. I don't know if that's state nationwide, if it's called dads or something, there was this program that we had to go through.

[00:03:34] Randal McLeaird: And we just couldn't get our license essentially at the time is what it was. So buying one that was already in existence, was that your through your foot in the door? 

[00:03:43] Isabelle Guarino: So there's four ways you can do it. You can buy land and build custom from the ground up. You can buy a single family home and convert it to become two of our properties.

[00:03:51] Isabelle Guarino: We did that way. You can lease a home to use for this. So somebody's already got it up to code and you're just going to lease it to use for this or for you can buy an existing. So there's 30, [00:04:00] 000 group homes that exist across our country today. And many of them, you can purchase the real estate in the business and you're up and running cash flowing right away.

[00:04:07] Isabelle Guarino: So I think what you're talking about is there's three really licenses involved. One is on the physical property. So is that what you're referring to? 

[00:04:15] Randal McLeaird: No, it was like the state regulatory body we were trying to go through and we had to submit application after application. And they kept kicking it back.

[00:04:23] Randal McLeaird: This is like 2009. 

[00:04:26] Isabelle Guarino: Yeah. 

[00:04:26] Randal McLeaird: So the physical 

[00:04:27] Isabelle Guarino: home will have a license based on like square footage, fire suppression, ramps, guardrails, handrails, all those different things. There's a licensed administrator that you're hiring to work in the home. I don't know if that's what you guys were applying for, but that's typically somebody you hire who's going to be in the weeds 24 7.

[00:04:46] Isabelle Guarino: They're hiring, firing caregivers. They're doing tours, marketing, filling the beds. If someone passes on, they're dealing with all of that. And then the caregivers have a license. So there's 3 licenses involved, but you as the owner operator. [00:05:00] I 

[00:05:00] Randal McLeaird: honestly don't know he was handling it. I just know we filled out a bunch of paperwork and they kept coming back.

[00:05:05] Randal McLeaird: And it honestly probably was unbeknownst to us. We were probably applying to be an administrator for no reason. Like we didn't even need to, we were real estate guys, you know, 

[00:05:13] Isabelle Guarino: stay out of that zone. That's not for you. Hire that out. 

[00:05:16] Randal McLeaird: Way to go, Joaquin. Way to go, buddy. 

[00:05:19] Isabelle Guarino: You know, if you would've come to the RL Academy, you would've known this.

[00:05:23] Randal McLeaird: That's right. Yeah. We looked at the numbers too. And just seeing what it was. Yeah, the returns look phenomenal. And the, and the guy that we were just talking about, I looked at some of the returns, you know, again, at what they produce. So regardless of the returns, I want to talk more on the care side, because you mentioned like the food was bad, it smelled, this, that, and the other, right?

[00:05:41] Randal McLeaird: All these negative things. So how have you been able to differentiate? Are you creating an Airbnb setting with all this like super nice, like chic looking boutique style hotel? Like, what are you doing to make yours better? 

[00:05:53] Isabelle Guarino: Yeah. When we were searching for my grandmother, she lived in upstate New York and none of these smaller style care homes existed.

[00:05:59] Isabelle Guarino: [00:06:00] They were all big box facilities, Brookdale, Sunrise, Atrium. So that's what we were looking and comparing it to. And honestly, the biggest difference between a smaller care home and a big box, right, is care ratios. In a large facility, it's 30 seniors to one caregiver. That is not okay. Like, I can't take care of 30 people.

[00:06:20] Isabelle Guarino: I'm pretty sure you can't. They can't either, no matter how highly trained or skilled they are. So there's a lot of neglect. There's a lot of abuse. There's a lot of seniors just sitting there not getting any attention all day long. And that to us was just not acceptable. And it goes down the line of you walk into this place and well, guess what?

[00:06:37] Isabelle Guarino: If someone's been left alone all day and now they've peed themselves four times, it's going to start to stink because that's soaking in everywhere. And you can't really get that out when you've got hundreds of seniors doing that over and over. So in the smaller care home setting, our ratios are four to one or five to one.

[00:06:54] Isabelle Guarino: So the care quality is already above and beyond better and it makes your [00:07:00] caregivers actually want to stay and work for you. So the caregiver shortage that everyone talks about in big box facilities, well, heck yeah. If you're going to get paid the same, wouldn't you rather take care of four people than 30?

[00:07:10] Isabelle Guarino: Like it just, just makes so much more sense. So you can control it a lot better when it's in a smaller environment for sure. 

[00:07:18] Randal McLeaird: All right. Let's break down. The actual strategy then from a real estate, we've got a lot of real estate professionals listening. Talk to me like I'm the guy, right? I need to know how to go in my market, or, you know, maybe you tell me find a different market, but how do I go from finding the asset?

[00:07:34] Randal McLeaird: Getting it ready to go and actually getting beds rented for like a better word. 

[00:07:39] Isabelle Guarino: Yeah. 

[00:07:40] Randal McLeaird: Okay. So filled and maybe is the right word. 

[00:07:42] Isabelle Guarino: Bill, there you go. That is the right word. Okay. So first thing you're going to be looking for in regard to location. And by the way, Texas is phenomenal for this. So if that's where you are, I would tell you, but you're going to want to look for demographics.

[00:07:55] Isabelle Guarino: That's going to be your target thing. You're looking for an area where the majority population [00:08:00] is 50 to 70 years old. Upper middle class making twice the median income, typically college grads and homeowners. Okay. That is telling us where the adult child of the grandma or grandpa was moving into the home, right?

[00:08:14] Isabelle Guarino: Where the adult child, where they live, eat, work, sleep, play, and that is our target market because they pay for mom or dad's care within the home typically want to be far away. They want to be five minute drive down the road. So we need to target market them. And that tells us our location. Then we choose which of those four methods we just talked about, right?

[00:08:33] Isabelle Guarino: Buying land, converting, leasing, or buying existing. Choose your method and you're going to get the real estate, get it up to code, adding ramps, guardrails, handrails, you know, fire suppression, maybe elevators if it's multi level. In Texas, you're lucky, you're allowed to have 16 residents in a home. Now, when I say single family, everyone thinks 3 2.

[00:08:55] Isabelle Guarino: It's not a 3 Our students in Texas have 12, 14, [00:09:00] 16 bedroom homes. These are mansions. They're luxury upscale, beautiful homes in really nice parts of town. And that's what you're looking for. Because most seniors do want private bedrooms, private bathrooms, right? So now you've got the home. It's ready to go.

[00:09:16] Isabelle Guarino: You've chosen your four methods. You purchased it. You've renovated it. You're ready. All the while you've been marketing, you have to start marketing day one to fill the beds. But one of the best ways to market or relationships you want to curate is with local placement agents. It's kind of like a realtor for assisted living.

[00:09:34] Isabelle Guarino: This is someone who, when grandma falls and breaks her hip, you know, they work with a placement agent and say, okay, what price point amenities location are you looking for? And that placement agent tours them to a couple different facilities. It costs the family nothing. It costs the facility or home the first month's rent or half of the first month's rent, depending on the contract they've negotiated.

[00:09:57] Isabelle Guarino: So you're paying for speed. You're getting that [00:10:00] lead in and you lose the first month, but the average stay is three and a half years. So I'll pay 5k all day for someone who's going to stay with me for three and a half years. So you can do that, but other marketing methods, Facebook websites, community events, elder law attorneys, hospice agencies, all sorts of people like that is who you're going to be working with to help fill your beds.

[00:10:22] Isabelle Guarino: You also need to hire your staff, your administrator, and they're going to hire your caregivers. And make sure that everything in the home is running smoothly because you're not going to be working in the home. You got to hire the staff who is and then more or less you're rocking and rolling. You've got your staff, you've got your residents.

[00:10:37] Isabelle Guarino: You're always marketing because people come and go in the home. And so you need to always be marketing to fill those beds. But more or less, that's how you get the home up and running. 

[00:10:47] Randal McLeaird: Awesome. A lot of stuff in there. So I'm going to break it down and go back. So let's see target kids, like who are going to be paying for it.

[00:10:53] Randal McLeaird: That makes a lot of sense. Midway through you talking, I spaced in, I was like thinking of this property that I went toward the other day. It was [00:11:00] a 10 bedroom, 10 bath. I'm like, wait a second. Okay, check those box and then it comes to that and it's downtown San Antonio. So it's not in that like five minute drive radius.

[00:11:08] Randal McLeaird: So I don't know if it would work and it needs a little bit of work, but anyway, sorry. I just wanted to, yeah, maybe we'll kick that around on the side. Tell me if I should do it. And then you mentioned there are four different ways, right? Ground up, all that, right? What is the easiest? What's the low hanging fruit?

[00:11:23] Randal McLeaird: Like, is it buying one that's already set up? I would think, but you tell me. 

[00:11:27] Isabelle Guarino: That's a faster way to get in. Within three to six months, you can definitely do that. But you're buying a business that's already set up. So if the home, the one we bought, it was like, I want to renovate that kitchen so freaking bad.

[00:11:40] Isabelle Guarino: And you can't. Because people eating three meals and then you've got visitors and caregivers and all this stuff. It's a running business. Even the bedrooms, I can't renovate them until someone passes on and I can do one room at a time. So the home becomes very mixed matchy. It's never going to be this like upscale, beautiful home.

[00:11:58] Isabelle Guarino: So there's pros [00:12:00] and cons. You can get in faster. Paying more because you're buying the business, buying the real estate, and you can't really renovate it very well. So pros and cons, that is a faster way to get in. Leasing a home is the cheapest way to get in because someone else has taken on the liability of buying the home, renovating it, doing all that, and you're just paying them more or less rent to run your business within the home.

[00:12:23] Isabelle Guarino: So that's one of the cheaper ways, but If I was in Texas, I would build from the ground up because a 16 bed is hard to find. And even if you are going to take a home that 10 bed, 10 bath and chop it up differently and add more square footage or whatever, renovate it. It's still going to be tough. It's easy.

[00:12:42] Randal McLeaird: Frankenstein style house. 

[00:12:44] Isabelle Guarino: Yeah, it's easier to be ground up if I was Texas. If I'm in California where I can have six in a home, I'm buying a five four and I'm just doing a single family conversion because it's very minimal conversions that will need to happen to that five four. Yeah. To make it ready to [00:13:00] go for six residents.

[00:13:01] Randal McLeaird: Yeah. So all of them have to be sprinkled. Is that what I heard you say? 

[00:13:04] Isabelle Guarino: It depends on your county, but whether or not you're required to, we highly recommend that you do. 

[00:13:10] Randal McLeaird: Yeah, yeah, yeah. You should. 

[00:13:12] Isabelle Guarino: Just safety. 

[00:13:13] Randal McLeaird: Yeah, yeah. I'm gonna ask then about, because we're touching on the metrics for buying a home in the business, right?

[00:13:18] Randal McLeaird: We can all value real estate pretty easily, right? There are comps and that sort of thing. But what do these things trade on from the business? Point of view, what multiple or is it 

[00:13:26] Isabelle Guarino: typically two to five times the EBITDA? Obviously, if I'm buying, I want it low. If I'm selling, I want it high. So we always say it's typically somewhere in the middle around that three or four number.

[00:13:37] Isabelle Guarino: But I'd also say it's worth what someone's willing to pay because if they have done all the work for you and you're up 10 K right away. You might be willing to pay a little bit more 

[00:13:48] Randal McLeaird: for sure. So can you tell us the numbers on that first one that you bought? 

[00:13:51] Isabelle Guarino: Yeah. So average rates here in Arizona are about 4, 500 per month per person.

[00:13:59] Isabelle Guarino: So we have [00:14:00] 10 residents here in Arizona. That's how many we're allowed to have. So that's 45, 000 coming in every single month. The mortgage on that house is only 5k because this was 10 years ago when we got started and then to run the business. Is about 30, 000 a month for 10 residents. So that home cash flows this 10 K a month, and that's baking in about a 10 percent vacancy, because if you're marketing at all times, you should be staying relatively full, but you always want to bake in some vacancy because You're never going to be always full.

[00:14:34] Randal McLeaird: Yeah. Okay. So 50, 10, 20 percent margin, essentially business. Is that what I'm getting? Yeah. Oh yeah. Okay. And did you just buy the real estate or how much did you buy that business for? 

[00:14:45] Isabelle Guarino: That home 10 years ago. We bought the real estate and the business together. It was inexpensive. The lady was going bankrupt.

[00:14:53] Isabelle Guarino: Actually, it's quite a story. We tell it in our class, but she was needed to get out of that and get it off her plate. And now [00:15:00] she's a killer in the game. She owns like 10 multi million dollar RAL homes and she's crushing it. But at that point in time, she's like, I got to get out of this. I want to say it was 550 for the real estate and the business.

[00:15:12] Randal McLeaird: Yeah. So good deal for you guys. Do you still have that? 

[00:15:14] Isabelle Guarino: Still own it. Still cash flows. It's our lowest end home. So it's not in like our higher end home gets rates of 8, 500 per person. So that's a huge range, but I like to have a low, a medium and a high, because if someone comes and tours the high home and I don't have any other options, now I'm sending them to a competitor.

[00:15:37] Isabelle Guarino: But right now I can say, Hey, I've got this other home. It's 15 minutes from here, but. The rates are only six. And when they come to that, I can move them up and down the ladder depending on location and price point. 

[00:15:47] Randal McLeaird: Yeah. Nice. Okay. All right. So we were talking about the easiest type or the four different types, right?

[00:15:52] Randal McLeaird: And then that took us down the road of how to sell and buy what the metrics look like on that. And then you mentioned something about the local placement agents. So [00:16:00] who are they? Right. I'm in San Antonio. Did I just Google placement agent for assisted living, or is it a known name in the field that does it nationwide?

[00:16:08] Isabelle Guarino: Well, there is a national company and it's called a place for mom, but I would never tell you to use them. They charge 120 percent and if someone is a lead with them, no matter when they come to you, you owe them for the rest of your life once they've signed up with them. So we do not recommend to work with them.

[00:16:27] Isabelle Guarino: They are just like terrible. But if you search placement agent in San Antonio, they will come up. Number one. Yeah. 

[00:16:33] Randal McLeaird: Okay. Good advice. 

[00:16:34] Isabelle Guarino: You want to find a local person. Honestly, 90 percent of this is like. Uh, stay at home moms and they just have their own little LLC and they work with the community. They make relationships with the care homeowners and the geriatric doctors.

[00:16:49] Isabelle Guarino: And so when someone needs help, they send them to them. They go and help you find a home. And that's it. I mean, if you think about it, if they do four placements a month, each placements 5k for [00:17:00] them, 

[00:17:00] Randal McLeaird: they're 

[00:17:00] Isabelle Guarino: killing it. 

[00:17:01] Randal McLeaird: Decent. Yeah. 

[00:17:03] Isabelle Guarino: Yeah. That's good work. 

[00:17:05] Randal McLeaird: Is there like an MLS equivalent of. Homes available or beds available in any given market.

[00:17:11] Isabelle Guarino: Okay. So we created the R a L home locator and it's RL locator. com. It's every state's directory because all states have a directory typically on the department of health services website. So Texas, you go DHS or whatever, and it will show you all the care homes in your area. And Texas is actually beautiful because it's an Excel sheet.

[00:17:35] Isabelle Guarino: Okay. I think you're the only state that's it's an Excel sheet. Everybody else, it's like a ghetto old website. That's like hard to navigate. And Oh my God, it's bad. So we had a VA pull all 50 States info, put them on the RL home locator. So all 50 States are there. So you can type in your area and see all the care homes that pop up in your area, but it's not telling you if they have beds available, their pricing and this, that [00:18:00] you got to know 80 percent of this industry is run by immigrants.

[00:18:04] Isabelle Guarino: And when I say immigrants, it's someone who came from another country who has a heart and a love for seniors, and they opened their own home up and have seniors move into it. They live in the home. They work in the home. They care for the seniors themselves. This isn't a investment strategy for them. It's a heart thing for them.

[00:18:22] Isabelle Guarino: They love to do this and that's why they're doing it. Well, after about seven or eight years, they burn out, but they have a business and it cash flows. And so sometimes they try to sell it or they just shut it down. We represent the other like 20 to 30 ish percent of the industry that's running this as business owners and operators.

[00:18:40] Isabelle Guarino: And we're the minority by far, because most people are really working in the home and they're running it very differently than the way we teach to set it up, which is very passive and hands off. So when you call these homes, most of them don't have websites. Most of them don't have Facebook pages. It's [00:19:00] shocking.

[00:19:00] Isabelle Guarino: I'm like, how do they even get business? But they're just word of mouth. They're just the local care home down the road. And everybody kind of knows. 

[00:19:06] Randal McLeaird: Yeah, that's a reminiscent of other real estate industries or asset classes, right? That have now been institutionalized. Wow. That's interesting. So are you looking for more properties or are you focusing mainly on the education side?

[00:19:19] Isabelle Guarino: You know, right now I'm focusing mostly on the education side. Currently I invest in other people's deals, so I don't say I own them, but we're invested in about 50 50 of our students deals at this point, 10 years teaching other people. And when you're teaching them the best way to do it, a lot of times, great deals that come across your plate and we want to play in the game with them.

[00:19:40] Isabelle Guarino: So I invest in about 50 own and operate three and then mostly I'm teaching people, but if a good deal comes, it's hard to pass up. 

[00:19:48] Randal McLeaird: Yeah, for 

[00:19:49] Isabelle Guarino: sure. 

[00:19:49] Randal McLeaird: Well, let's talk, I guess, numbers then, because. Like anything else, if you're going to do ground up, that's one cost. If you're going to buy in retrofit, that's another cost, but in every market is going to be different for cost of labor and [00:20:00] materials and whatnot.

[00:20:00] Randal McLeaird: But in general, if I were to buy a property or even convert, like, Hey, I've got a house, it's a four bed, two bath, and I want to convert this thing. What are the major expenses that I would likely incur? Sprinkling is not cheap, right? That's one thing, but what else is there? 

[00:20:15] Isabelle Guarino: Sprinkling is about 3 to 5 per square foot, so that could be expensive if it's multi level, 30 to 50k for an elevator, a residential elevator, that can be expensive.

[00:20:26] Isabelle Guarino: I probably wouldn't do, unless you're capped at 6 residents, a 4 or 2 might work. If not, number 1, it's probably in the wrong neighborhood. Because daughter Judy, right? 50 to 7 year old upper middle class. She's not living in a 4 2. She's living in a 6 5, right? So we want to be in her neighborhood. So already I'd probably say, don't think it's the right area.

[00:20:46] Isabelle Guarino: But let's just say it was. It was perfect area. You're going to need to add a whole lot more bedrooms and bathrooms. And we're not just chopping the home into bedrooms and bathrooms. You still want A welcome area, a dining room, a living room, a kitchen. If you can add a [00:21:00] library, a salon, a movie theater, all those things are nice touches that a lot of our homes and our students homes do have.

[00:21:06] Isabelle Guarino: These are luxury upscale homes. You know, this isn't a little like, Oh, just tiny little project. These are big projects. Yeah. 

[00:21:15] Randal McLeaird: So what, what's the sweet spot then? It's 16, right? 16 people in a home in an upper. Neighborhood in San Antonio? Like say the House 16 better. I mean that's, there are a few neighborhoods, right, that I can think off the top of my head.

[00:21:29] Randal McLeaird: Year 2 million, $3 million for that purchase. Yep. Give or take. Right. And then the retrofit, another million dollars I would guess. You know, if you're 

[00:21:36] Isabelle Guarino: putting Potentially, 

[00:21:37] Randal McLeaird: yeah. I don't know. Some of them may already have libraries, but . So again, the returns, I'm just kind of curious what you're looking at on this return profile.

[00:21:46] Randal McLeaird: If it's a 20% margin business, that doesn't really tell me on the. How much income potential 16 beds could get me in that market is 8, 500. The cap. 

[00:21:55] Isabelle Guarino: So there's a website, Jen worth. com forward slash [00:22:00] cost of care. Jen is G E N worth. Okay. Jen. com forward slash cost of care. When you go there, you can type in your area or wherever you want to invest in.

[00:22:09] Isabelle Guarino: It will tell you the average cost of care in your area. So currently national average is 5, 350. This includes our friends on government funding. Which is about 1800 bucks a month. And that's a lot of people who are in this bracket. It also includes our private pay friends who are paying nine, 10, 12, 000 a month.

[00:22:31] Isabelle Guarino: So it's averaging to that 53 50. So depending on your market, right? If you search San Antonio and your average, I don't know, San Antonio is off the bat, but if the average is six, we only do private pay homes. That's what we'd be showing you how to do. So your rates in your home are probably seven, eight.

[00:22:48] Isabelle Guarino: 85 a month to be in that home. So yeah, there's not a, a top. It really is a market dependent. Hawaii's average is 9, 340. So [00:23:00] our students out there are getting 12 K per month resident, right? Same with Alaska. It's like ridiculously higher. Students are getting DC. They're getting 10 K a month. It's crazy.

[00:23:11] Isabelle Guarino: Crazy. 

[00:23:12] Randal McLeaird: So how do you determine market one? Like why wouldn't everybody just go to Hawaii, do this? How do you know saturation? Right. Is it, am I going to fill these beds? Am I not right? How do you know these things? 

[00:23:23] Isabelle Guarino: Okay. Saturation. Let's talk about that. We always tell people to do an internal feasibility study.

[00:23:28] Isabelle Guarino: You need to determine how many beds are already there. What are they charging? Are they full or are they empty? You need to find all the vacancy rates. You've got to do the market research. It's also the McDonald's method. Okay. That's the second piece of it. If they've just built a brand new big box right by you, you want to put your care home at the end of the doorstop because they did millions of dollars with the research to determine that there's a growing need in that area.

[00:23:51] Isabelle Guarino: Just to throw some numbers at you. There's 10, 000 people a day turning 65, 4, 000 people a day turning 85. Currently, the silent [00:24:00] generation lives in assisted living. It's not the baby boomers yet. We're just starting to see the oldest baby boomers enter the market. The next 20 years, we are doubling the amount of seniors who are going to need home care and assistance.

[00:24:12] Isabelle Guarino: And we are currently, right now, 1. 3 million beds short. So the supply is very low and the demand is increasingly high and getting even higher over the next 20 years. NIC is projecting we're only adding 50, 000 beds per year. There is not enough room in the inn. This is going to be a massive National crisis that if our government doesn't get involved and figure out how to get housing for these seniors We're gonna have a huge problem because let's be real majority of people can't quit their job to go Take care of their loved one full time, right?

[00:24:48] Isabelle Guarino: That's not happening for most Americans And if you think you're gonna get one on one in home care average cost is 27 an hour If you need 24 7 care, that's 19k a [00:25:00] month, plus your mortgage, plus your activities, food, cable, internet. We're talking 20 25k to keep your loved one at home with one on one care.

[00:25:07] Isabelle Guarino: So that's not affordable for Americans. They can't quit their job because times are tight right now. So going into assisted living is the next best option. And I'm not trying to run the whole world. I'm trying to take my tiny piece of the market and show other people's how to, to impact your community, make a plan for your family.

[00:25:27] Isabelle Guarino: So you or your loved one knows exactly where you're going and you can live for free, leaving your kids blessings, not burdens. 

[00:25:33] Randal McLeaird: Nice. I like that. That's good. I'm going to go back then. Okay. So you mentioned NIC. We'll get to that. And it's like, we were talking about the placement agents. Yeah. Local. All right.

[00:25:42] Randal McLeaird: Mom's right. That sort of thing. And so there's a way to find them and talk to them. The other side of it was actually hiring the staff. So that seems like a massive ordeal, fairly daunting because they're running the entire thing. You may not have any medical background. You may not have any. So how do you go [00:26:00] about doing that?

[00:26:00] Isabelle Guarino: So the 1st key hire is that licensed administrator, right? And so they, in most states, they're not a nurse, not a doctor. Like, I think 1 state, they have to be a nurse. Other than that, they're not. It's a license that they get to be a licensed administrator and it's typically a nurse. Right. A couple hour training and then some time working as a caregiver and a course that they have to take to get that approval for it.

[00:26:25] Isabelle Guarino: Every state varies, but that's typically what the setup looks like. They're going to do the hiring, firing, retention, onboarding of your caregivers. Basically, they're building out their team. How do you ensure that these caregivers are doing what you want and everything's running smoothly? It's you having that Attention with that administrator and making sure that they're running the business.

[00:26:45] Isabelle Guarino: You want it the way you want it to be run implementing policies and procedures cameras in the house, you know, making sure that you're watching everybody's move being slow to hire quick to fire using hiring tools like predictive index. All these different things really help you make sure [00:27:00] that you're getting strategic hires and that you are running a tight ship because it's very important.

[00:27:05] Isabelle Guarino: Like this isn't just real estate. This is people's lives at stake and you don't want to mess around with that at all. 

[00:27:11] Randal McLeaird: Yeah. That's another one of the reasons like the liability seems to go up significantly. So what special insurances or special coverage do you guys have to have on these types of investments?

[00:27:22] Isabelle Guarino: You definitely want liability insurance. It's about two to three dollars per day per resident. So with 10 residents, 900 bucks a month, it's a line item, but you want it because it protects you, your seniors and your staff. And that safety is the number one most important thing for everyone involved in this.

[00:27:40] Isabelle Guarino: Right. And so you want to make sure that you get that, but people get really scared, like liability insurance would be so expensive. It's really not, it's really, 

[00:27:47] Randal McLeaird: yeah. How was the market impacted during COVID? 

[00:27:51] Isabelle Guarino: You know what's so crazy? The big boxes got hit so hard and couldn't have been happier about it. I hate to say that, but they got [00:28:00] exposed.

[00:28:00] Isabelle Guarino: They got exposed for shoving food under the door and neglecting seniors and leaving them for days on end with no attention. And finally, people started waking up and saying, Oh my God, my loved one was getting this type of care? Are you kidding me? They started ripping their loved ones out of big boxes and begging to come into our doors.

[00:28:19] Isabelle Guarino: And for years, at the big box conventions, we'd come and they'd look down on us because we were small, we were the small guys, you know, we're so lame. We don't own thousands of beds and all this stuff. And we were just chopped liver to them. Then COVID happened and we were the star of the show. Every single big box owner is saying, how do we become like you?

[00:28:38] Isabelle Guarino: How do we do this? Because no one wants us anymore. They all want you. So now you'll see big boxes are starting to buy up like an entire block of land and turn it into like a cul de sac of small care homes. They're trying to become us because it's terrible. And I'm happy that COVID ruined it for them because 97 percent of COVID cases with seniors was in big boxes.

[00:28:57] Isabelle Guarino: And I'm happy that COVID ruined it for them because 97 percent of COVID cases with seniors was in big [00:29:00] boxes. 3 percent in ours, we can control who's coming and going like we're home, you know, who walks through your door every day. They know who walks through the care home door every day. Not in a big box.

[00:29:11] Isabelle Guarino: Someone's working on floor five one day, floor 18 the next day, spreading God knows what with ours. It's the same people in and out every day. It's so much easier to control. 

[00:29:20] Randal McLeaird: Yeah, that's what I was alluding to a minute ago about institutional, like if they are transitioning out of that and trying to take part of the market of the smaller homes.

[00:29:28] Isabelle Guarino: They definitely are. 

[00:29:29] Randal McLeaird: Yeah. Yeah. Okay. So that's happening. It's currently in transition. So. 

[00:29:33] Isabelle Guarino: People may find that as a threat. Oh, they're going to come in and do this. If you have a portfolio of five to 10 of these, they're going to buy them up from you. So this is the best time to get in, start your brand, build your reputation.

[00:29:47] Isabelle Guarino: We have a student with 26 homes under one brand in Colorado, all cash flowing between 10 and 20 K a month. And their plan is to get to a hundred, package them up and sell them. That's a huge buyout. So this [00:30:00] is the best time to get in because they don't know and they don't want to take the effort to play the small man's game.

[00:30:07] Isabelle Guarino: If you play it right and build it the way they want to scale, they'll buy you out and you can either keep it in cashflow and pass down to your family. And I love that. That's what my family's exit plan is, is just to keep it. Or you can play the big boy game. It's whatever you want, but it shouldn't scare you from getting into it.

[00:30:25] Isabelle Guarino: It should be like, Ooh, there's some real money on the table. For 

[00:30:28] Randal McLeaird: sure. To clarify. That's what I was driving at. Like, so I look at like storage, right? Storage was, you know, mom and pop, like 80 percent mom and pop, no websites, no whatever. And now it's been institutionalized and it's been gobbled up. So that's, what's happening.

[00:30:41] Randal McLeaird: I guess I can see that happening in this industry. If it hasn't already. Absolutely. You mentioned NIC. What is NIC? 

[00:30:49] Isabelle Guarino: NIC is, I think it's called National Investment Center. If you just go to NIC. org, they have a bunch of senior housing, like, investment information. 

[00:30:58] Randal McLeaird: Okay. All right. Thanks for clarifying [00:31:00] that.

[00:31:00] Isabelle Guarino: Yeah. 

[00:31:01] Randal McLeaird: Let's talk again, when you're bringing people in, you're bringing students in and you're starting with them. Give me the, like, high level points, like, hey, you're going to start here. This is what we're going to do. You're going to end up here. Like, what's the process with you guys? 

[00:31:12] Isabelle Guarino: Yeah, we host 3 day trainings in Phoenix, Arizona, every like 6 to 8 weeks.

[00:31:18] Isabelle Guarino: I'm the lead educator, but everyone else who's there who's teaching and training our past students who went through the education, went out, got their care homes up and running. And now they're back to kind of teach you their expertise. So we really go through A to Z what you need to know when it comes to finding the home, renovating it, getting the capital so you don't have to use your own money to do this.

[00:31:38] Isabelle Guarino: We go through hiring your staff, doing tours with families, how to market the home. We really cover it all. We even go through memory care. And if you want to add that on as an option within the home, um, so how to get licensed for that and the differences with that. We talk about investing remotely because 31 percent of care home owners are remote operators.

[00:31:57] Isabelle Guarino: They own in another state or area from [00:32:00] where they live. So we go through A to Z teaching you everything you need to know. We have coaching and mentoring after the fact, but most people, that's enough information to go out and hit the ground running. And they now know what to do. They have their plan of attack and they can kind of take it from there and get their care home up and running.

[00:32:15] Isabelle Guarino: We have a national association that represents all 30, 000 group homes across the country. So we've got a lot of free resources for our care home owners that go through our training there. And we host a national convention, which is like a party for all the care home owners too every year. And we have a lot of fun with it.

[00:32:32] Isabelle Guarino: So yeah. 

[00:32:34] Randal McLeaird: So you mentioned remote, like owning remote and working remote. So what kind of tools do you need? What kind of systems do you guys have in place? What do you need to be able to do that? And to actually be comfortable knowing that that asset is actually operating the way you want it to operate?

[00:32:49] Isabelle Guarino: Yes. It sounds so simple, but things like using zoom and using your phone to check in with your administrator. So you don't have to be in the home, right? Having cameras and actually watching the footage. [00:33:00] If you want to write, having all of your documentation online, when someone comes in to tour the home, you can send them everything on docu sign and have them all sign it.

[00:33:08] Isabelle Guarino: They're having electronic payments and e mars electronic medical recording systems. Having cameras over your medication, dealing with the doctors virtually. I mean everything is virtual these days and that's a beautiful thing because it means you don't have to go to the care home. I visit my home's Every other month, maybe, and they're only 45 minutes down the road from me.

[00:33:29] Isabelle Guarino: I could go every day, but I'm like, why, why do I need to go there? If I I'm no use, I'm not a caregiver. There's no need. So a lot of the typical things that you would be using to run any business, that's what you're going to be using over there. QuickBooks and payroll, all of it can be done online. Even a lot of the marketing, it's pretty much all online.

[00:33:48] Isabelle Guarino: There's some relationship building that needs to be done in person, but for the most part, as the owner operator, your job is really just to oversee that administrator, make sure everything's being done properly, and then get all those [00:34:00] systems in place so that the business can kind of run itself with minimal input from you.

[00:34:06] Randal McLeaird: What would you say you spend? You have three of them. And how many total beds do you have? 

[00:34:10] Isabelle Guarino: 30 total beds, five hours a week. 

[00:34:13] Randal McLeaird: Five. And that's mainly looking at reports. You're not sitting there watching the cameras. No, you're not. Yeah, 

[00:34:19] Isabelle Guarino: it's one meeting a week with my administrator. She brings to the meeting a written report that basically says, Hey, Joe Schmo moved out.

[00:34:26] Isabelle Guarino: Sally Sue moved in. We've got one open bed. This is my plan for filling it. You know, this caregiver showed up late this week. This one filled this shift. We have this holiday coming up. This is our activities are met. She writes it all out for me. I'm like, Looks good. And if there's any concerns, the thing is in the beginning, it is so much more work because you've got to get it all set up.

[00:34:46] Isabelle Guarino: You've got to get those systems down. So your administrator knows how to communicate with you that way and knows this is what we're going to do within the home. But once it's up and running, it's very, very passive. But in the beginning, it is a lot of work. Hear me loud and clear. [00:35:00] 

[00:35:01] Randal McLeaird: What do you see happening?

[00:35:02] Randal McLeaird: How's the market evolving? We've talked about the big box guys coming in and they're going to be buying up some or developing new. Small group home type setup. What do you see going and what are you personally trying to do over the next three to five years? 

[00:35:13] Isabelle Guarino: Yeah, I do. First, we're going to have, this is going to be a hot topic.

[00:35:19] Isabelle Guarino: It's not a sexy topic, right? But it's going to be a hot topic because. The boomers have been driving our economy for the last 70 plus years. What makes us think that's just going to magically go away in their last years of life? It's not. They drive our economy, follow the money. You're following the boomers.

[00:35:34] Isabelle Guarino: They hold most of the wealth in our country today. They also hold most of the real estate. And when they're moving into your home, guess what? Their home is now up for grabs. So to me, I think this is going to be the hottest thing over the next 20 years. And we're going to see more and more people talking about it, more and more people getting involved and wanting to play their role, whether it's owning the real estate, owning the business, you know, doing some sort of supplemental business, being a placement agent or something like that, it's going [00:36:00] to be a hot topic.

[00:36:00] Isabelle Guarino: That's what I'm seeing. I'm seeing, you know, the big boxes starting to get involved at the smaller scale and really try to figure out how to work their way in. And I'm starting to see a lot of real estate investors in general. It's tough to cashflow on most other forms of single family investing right now.

[00:36:19] Isabelle Guarino: Even Airbnb is tough these days. You've got cities practically shutting them down and really just hating on the owners. This is a really lucrative opportunity, but also an opportunity to really do good and give back and have a solution. And I love that, that do good, do well balance. So I see a lot coming.

[00:36:39] Isabelle Guarino: I think this is. We're going to see a lot more about this. And for us, my biggest thing is our mission is to positively impact 10 million people by providing high quality assisted living. So my mission is to get out there and encourage as many people as I can to get involved in this industry one way or another, but this is [00:37:00] the opportunity of our lifetime and.

[00:37:03] Isabelle Guarino: It's kind of like we're in 2008 and there's a crystal ball in front of you and you're not taking action. It's like you look back in 2014. You're like, what an idiot was I right? It's like, that's what's happening right now. You can literally see the numbers. You can see what's going on and it's right in front of you.

[00:37:21] Isabelle Guarino: And for everyone who doesn't take action, you're going to be kicking yourself in 10 years. That's what I see. 

[00:37:26] Randal McLeaird: So are you going big? Are we going to see more beds on the horizon? 

[00:37:31] Isabelle Guarino: To get 10 million, you know, seniors impacted. We need to get as many homes as we can. So the best thing I can do is teach as many people as possible how to do this.

[00:37:40] Isabelle Guarino: So together we can all make a huge impact. Cause if I can teach you and you open a three pack and you teach more people and they open three packs together, we can accomplish this. It's bigger than just me eating my little piece alone, you know? 

[00:37:53] Randal McLeaird: Yeah. Yeah. I like it. I like it. One thing you just said, I like sparked in my mind immediately.

[00:37:57] Randal McLeaird: You go, we've got seniors are moving [00:38:00] into our houses, their house then becomes available. So are you positioning yourself in any way to capture those leads and or do something with that? Cause there's a bunch of people that want to buy those or agents who would want those leads to list those houses. And if you're the conduit, that could be a revenue generator.

[00:38:17] Isabelle Guarino: Huge opportunity for sure. We are going to launch a program for realtors. When I have more info, I will let you know for now we have an incredible affiliate with Philip Vincent of mom's house, and they help teach people and realtors how to invest. Get the home, place them in the home. So you're making that income there.

[00:38:40] Isabelle Guarino: You're getting the real estate and getting to do whatever you want with it. Right. So fix and flip, you know, buy and hold, turn it into an RAL, whatever you want to do. So Philip Vincent for now is the go to guy with mom's house. 

[00:38:52] Randal McLeaird: Awesome. Well, Isabel, I appreciate you jumping on, sharing your knowledge, information about that business and all that it [00:39:00] entails.

[00:39:00] Randal McLeaird: I'm going to throw your contact info in the show notes. So if anybody's interested and wants to get in touch with you directly, just click through directly to Isabel. So thanks again. It's a great convo. 

[00:39:10] Isabelle Guarino: Thanks for having me. 

[00:39:11] Randal McLeaird: Appreciate it. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional?

[00:39:20] Randal McLeaird: If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

[00:39:27] Bye. 

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Randal McLeaird

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