EP 53 - Isabelle Guarino - Residential Assisted Living The Future of Senior Care

 Ever wondered about The Future of Senior Care and how you could turn a single-family home into a profitable business while helping seniors? This episode of Money Focused Podcast is all about that! Isabelle Guarino, COO of Residential Assisted Living Academy, shares her inspiring journey. It all started with her quest to find quality care for her grandmother, which led to a booming business in residential assisted living (RAL). We dive into the business model, licensing requirements, and how to run these facilities smoothly, even from a hands-off position once your systems are set up. Isabelle debunks myths about using single-family homes for senior care and highlights the amazing benefits. These homes offer personalized care that’s often better than larger facilities, thanks to the Federal Fair Housing Act. We also talk about the growing demand for senior housing, driven by the "silver tsunami" of baby boomers, and the economic opportunities this brings. Isabelle breaks down the typical income and expenses to show how profitable this can be. You'll learn how modern technology enhances senior care and get practical tips on starting in the RAL industry, including training programs and funding options like SBA 7A loans. Don’t miss out on this chance to learn, grow, and make a difference in the lives of seniors while exploring the future of senior care! 


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Transcript

Speaker 1: 0:45

Welcome back to the Money Focus Podcast. I'm your host, moses the mentor, and on this episode I have the pleasure of having Isabel Guadagno on the show. Now, isabel is the COO of Residential Assisted Living Academy and she's a pioneer in transforming single family homes into profitable residential assisted living facilities. She's here to share her journey and also enlighten us on the incredible opportunities in the assisted living industry. So let's dive in. All right. Thank you so much for joining the Money Focus podcast. I really appreciate it. The first thing I always like to ask my guests to do is to just really walk us through their career journey, professional journey, just ultimately, in your case, how you got started in the residential assisted living space. So the floor is yours.

Speaker 2: 1:38

You know, we got started in this space because my grandmother fell and she needed assistance and my dad had been a real estate investor for 30 plus years at that point and we were really searching for somewhere suitable for her and every place we went into smelled bad, the care was bad, they were expensive, with waiting lists, and we were like is this? It Are these the only options? So we were really looking for an alternative option at that point and we did quick math and said wait, wait, wait. It's going to cost us 5K a month for her to live in one of these homes or we could own it cashflow 10 grand a month and she could live for free. It made a whole lot of sense to just get into this industry.

Speaker 2: 2:22

So, without knowing anything about the assisted living space my dad had been a real estate investor, but nothing with seniors, nothing with assisted living we just jumped in. We purchased our first existing RAL the real estate and the business and with the intent to move my grandmother in. She passed before we could move her in, but we really fell in love with the cause and the industry and all the amazing seniors that we were able to help. So that was about almost 14 years ago now 10 years ago, we started training people how to do this and in 2021, my father passed away, so he left me his three cash flowing residential assisted living businesses, and now I train other people how to do it, all across the country. So it's just one you know problem turned into a solution and then turned into blessings and it's really carried on from there.

Speaker 1: 3:18

Just so I understand. So when you, when you have purchased that property, you say you purchased the property in the business, did you need any type of certifications or anything like that to get the business rolling?

Speaker 2: 3:30

So you, technically, as the owner operator, don't have a license. The physical home has a license based on emergency egress, square footage, bedroom, bathroom setup, all that good stuff. So the home has a license and bathroom setup, all that good stuff. So the home has a license. You're hiring a licensed administrator which is kind of in the real estate world like your property manager. They're doing all the hiring and firing, training, onboarding of your caregivers and they're marketing the home. They're touring the new seniors through the home, they're doing intake and all that good stuff. So the licensed administrator has a license and then the licensed caregivers have a license. So you, as the owner operator, actually don't. It's the home, the administrator and the caregivers.

Speaker 1: 4:15

The makeup of the house in that kind of fits, the qualifications of whether or not it's a RAL right, and then you hire people who have the credentials to run it. So you can be kind of hands off if you want to.

Speaker 2: 4:28

Exactly we get these businesses down to. I think I spend about five hours a week on my three care homes and I visit them like maybe every other month, maybe once a quarter it's pretty rare because there's no real reason for me to be there. I'm not a caregiver, I'm not licensed to do the care for the seniors and we run everything just like you know, we're meeting virtually right now, so everything can be run really systemized. That it's, you know, running in place. Of course, in the beginning it is a lot of work to get it up and running and you do have to be more hands on, but once you set those things into place you can run it more remotely or more hands off.

Speaker 1: 5:07

Yeah, no, I would have never known that. So this is why I bring people on like you to educate us. So talk to us about like the opportunity, so for people that are listening that you know they want to, you know use their money, have their money, work for them, and they've never heard of an REL and how to do this. Can you kind of really give us the scope of the investment opportunity that's at hand with your business?

Speaker 2: 5:33

Let's just do an average breakdown. The cost of care in our country today on average is $5,500 per month per person. So if you had 10 seniors living in your home, that's $55,000 coming in every single month. Now you have quite a bit of expenses in this industry. You've got to pay for 24, seven staff, food activities, cable, utilities, liability insurance, property insurance, you know, taxes, all this good stuff. It may run you $35,000 every month. And then debt service is starting to get more and more expensive. In our country today, right A lot of markets, you can't even get a nice home for 5 or 6K anymore. It's like a $10,000 minimum. So if we put in a $10,000 mortgage right there, that's cash flowing you $10,000 a month or $120,000 a year. So that's what we show people how to do. In most markets you're allowed to have somewhere between six and 16 residents in the home.

Speaker 1: 6:36

Is that the RAL formula that you refer to on your site?

Speaker 2: 6:41

Yeah, yeah, gotcha. What are those?

Speaker 1: 6:42

steps. What is the formula? Yeah, yeah, gotcha. What are those steps? What is the formula?

Speaker 2: 6:53

Well, we show people in our live and our online trainings how to find the homes, how to fund the homes and how to fill the homes. So we're really breaking it down step by step how to go through everything you need to know to get this business up and running from doing the demographic research, hiring the licensed appropriate staff, getting licensed through the state, what renovations you need to do and then funding the whole thing. Because so many investors they don't want to use their own money. They want to find a way to use OPM and make that work for them, and so we love to focus on that within this industry.

Speaker 1: 7:21

OPM Other People's Money. So for those who are not familiar with that acronym, how long does it take from the time that someone has a property to where they can realistically start making money?

Speaker 2: 7:34

Yeah, great question. It really depends on which of the four routes you choose to get started. So if you're going to buy land and build a custom home from the ground up, that could be one to three years to get that build and then get it full with residents. If you're gonna buy a single family home and convert it to become depending on how much renovations you need to do, are you just chopping it up differently or are you adding on 3,000 square feet? You know those are gonna range, but call it six to 12 months.

Speaker 2: 8:03

If you're gonna buy an existing business, like the first one we did, you're purchasing the real estate and the business You're up and running, cash flowing day one. That should take you about three months from finding the deal to you're up and running right. The fourth way to get started is to lease a home to use for this. So someone else has purchased and renovated the home and you're gonna to operate the business within their home. That's also like a three month process. So different timelines, different price points and really a lot of different options to suit your needs.

Speaker 1: 9:01

whatever you want to do and however you want to get involved in this, Is there one that you prefer that your students take, or is it really truly case by case basis?

Speaker 2: 9:12

I always tell people to be open to opportunities because if you are so dead set that you want to buy an existing, but an amazing piece of land comes up available in your market, in the right demographics, with a brand new big box, down the road the numbers work out. It's like don't skip that right, go for it, even if you don't know necessarily how to do that. That's why we educate people how to do this, because you know you don't need to know everything. You need to find someone who knows it and leverage their you know expertise to make it happen. So I always tell people be open to opportunities.

Speaker 1: 9:49

As far as finding someone, because I'm not a medical professional. It sounds like that wasn't your background either. Is it difficult to find someone that can operate the facility for you?

Speaker 2: 10:01

So about 80% of this industry is run by immigrants. So most of them come from maybe Philippines, romania, all sorts of different places across our world and when they come to America they have a heart for seniors. Many of them own and operate their own care homes. They live in the home, work in the home, do everything themselves. So a lot of people who are in this business. That's kind of the route they go. When we started in this industry we were the first ones kind of putting a business professional spin on it, saying no, we're going to not work in the home and live in the home, we're going to run this as a professional business. So we're kind of the new wave of what's already been happening for the last 20, 30 years. But most of the staff within the home is those same people. They're people who you know love seniors. Maybe they're, you know, from abroad somewhere within our world and they want to work with seniors even though they're getting paid.

Speaker 2: 10:57

You know caregivers. Typical wage for a caregiver is minimum wage plus a couple dollars an hour. You know you can get that at Chick-fil-A or In-N-Out or a lot of different fast food places these days. But these specific people they wouldn't work in fast food if you paid them right, like they're here for seniors. They love seniors, they want to do this and they wouldn't work anywhere else. So there is a caregiver shortage. You know people talk about that all the time but we're not seeing that in our homes and our students. Thousands of people across the country aren't necessarily seeing that. Where you're seeing it is the big box facilities. They have a big problem with maintaining their staff.

Speaker 1: 11:38

That makes sense and a lot of cultures you know, with your multi-generational households, that's part of the fabric of who they are just care for their elders. So I can see how that makes sense. What would you say is some of the misconceptions that people may have as far as owning a facility like this?

Speaker 2: 11:58

I think people think liability is going to be through the roof. You know it's typically two to three dollars per day per resident, so 10 residents, 900 bucks a month. It's a line item. You definitely want it, right, you definitely need to have it, but it's nothing to break the bank over.

Speaker 2: 12:14

I think a lot of people are confused on that, and I also think people are very concerned about doing this in a single family neighborhood. That's what we teach and preach. These aren't facilities, they're homes, right. They're regular homes being used for this purpose. So people think, well, you can't do that in a neighborhood, right? Actually, we're protected by the Federal Fair Housing Act. It's discriminatory against disabled people to say we can't do this home in your neighborhood because the seniors are considered disabled at this point. You know they're not moving in for fun. They're moving in because the doctor's saying they can't go home alone. They must have 24-7 care, and so this is like a doctor's order type thing. They're not safe on their own, and so that's a beautiful thing that we're protected. But I think it's a big misconception in this industry.

Speaker 1: 13:07

The first thing that came to my mind is what about just the level of care, the level of care that you know a senior may have? If I have a senior that I love, as a potential client say hey, you know, I'm open to having my grandparent live here versus going into a true facility, how do you overcome that objection from potential clients?

Speaker 2: 13:29

It's actually pretty funny. 90% of our clients come from big facilities because the care is so terrible. It should be illegal, truly. They have a 30 senior to one caregiver ratio in a big box facility in your area so you might be paying the same $5,500, but in our home it's a four to one care ratio. So it is night and day difference. Most of the seniors come because they fell and weren't attended to for six plus hours. They were double diapered and got a UTI. They were neglected for hours During COVID. Food was shoved under the door. People were ripping their loved ones out of big boxes, begging to come into our homes. It's night and day.

Speaker 2: 14:16

So I've actually never had somebody question the care in our homes because it's known that we're doing so much better than what's offered in the big boxes. It's absolutely tragic what's happening over there. But people walk in and they see the big chandelier and the pickleball court in the pool and they say mom's going to love it here and they forget that mom doesn't play pickleball anymore. Right, mom doesn't care about the chandelier. What she cares about is being attended to when she needs it and that's what we offer. So this isn't a home-like like they try to make the facilities feel this is a home. You know you didn't grow up in a hospital. You grew up in a home, so why would you want to move somewhere that feels like a hospital? Long hallways, impersonal staff, where they don't call you by your name, they call you by a number. It sounds like jail to me, and that's what it really is in many of these large facilities. So it's not much of a critique we get, it's more of. That's the pro. That's why we do what we do.

Speaker 1: 15:23

Well, I think you convinced me. You know that made a lot of sense. I mean, it's, you know, a 30 to one ratio versus a four to one. I mean you know that that's, that's just like that's a no brainer, that's a no brainer. So I appreciate that. And then the part where you said it's not home, like it's a home. Those are two great selling points. So I think you, I think you got it down fat. I always hear the cause I'm in real estate, so I think you got it down fast. I always hear the because I'm in real estate, so I always hear about baby boomers and so many people are retiring and seniors are gonna need housing, people are living longer. So I'm just interested to hear from you, like, what type of trends are you seeing in your industry right now and what do you expect to see in the next five to 10 years?

Speaker 2: 16:12

We call it the silver tsunami of seniors, because there is a massive influx of people coming into this industry. Currently, the silent generation is who's in assisted living, but the baby boomers almost double the amount of people in that generation. They're coming into this market right now, so this is something that's gonna last for the next 20 plus years. Is this massive influx of people? We do not have the supply. We are currently 1.2 million beds short and they're only projecting that. We're building about 50,000 new beds per year, so there is not enough room in the end, right, there's not enough beds available and there's a massive amount of seniors who are about to need care and assistance. So I love sharing with people how to do this, because it's perfect. You couldn't ask for a better economic situation, right? You couldn't ask for a better economic situation, right? Not enough supply, way crazy demand. This is a bird in the hand.

Speaker 1: 17:15

Yeah, I mean the numbers definitely suggest that you know there's a huge need here, typically when things like that happen. Just curious if you know this or have the insight Are there any government incentives being put out there for people who would be interested to invest?

Speaker 2: 17:35

Potentially, if you're going to do a home that accepts government funding so Medicare, medicaid they pay out at about $1,800 a head, so the homes that accept that you're usually eating rice and beans You're usually having really low level of care. It usually is someone who lives and works in the home. We don't focus on government funded, we focus on private pay. So most of the seniors are using their own cash, their savings, their IRA, or keep in mind the baby boomers. They own 60% of the real estate in our country today. If they sell one home that they bought for 20K and is now worth 2 million, they're good, they can pay for the care.

Speaker 2: 18:17

So many of them use their own cash or they're relying on their adult children to foot the bill for them. And that's where it gets tricky. And I talk to adult children all day long who say mom and dad don't have a plan, you know, and they're relying on me to do.

Speaker 1: 18:35

Okay, so your model is private money. It's not government funds at all.

Speaker 2: 18:39

No, and about 10% of the population has long-term care insurance. If someone has that, we'll accept it and it's a great way to pay for your care needs at the end of life, but many people don't have it.

Speaker 1: 18:51

Gotcha. Next, I wanted to talk a little bit about technology, and this is more from the person who owns the property. So I believe you said something about five hours a week, roughly. What role does technology play in how you actually monitor or manage the property for an owner?

Speaker 2: 19:11

We use a ton of technology within the home from Zoom meetings with my administrator I'm always texting or calling them so I don't have to go there in person. We have cameras all in the interior and exterior of the home not in bedrooms or bathrooms, that's a HIPAA violation but everywhere else in the commonplaces we have. I can look at payroll online. I can look at the resident rent rolls online. I can use all these different things to see what's going on. We have EMARS, electronic medical recording systems that the caregivers, when they're feeding and passing the pills to the residents, they're tracking who took their pills, who didn't, if there was any up or down in medication. All that good stuff.

Speaker 2: 19:53

So there's a ton of technology that we use within the home. Even as simple as you know marketing your home. You're going to want to have a Facebook page and a website and you're going to want to do promotion online as well as those relationships, those in-person. You know marketing techniques, but there's a ton of different systems that we can use. There's even an amazing tool that is like a wearable trackable, almost like a Fitbit, almost like an Apple Watch, and it geo-tracks where the seniors are within the home. If they fall, it sends an alert to the caregivers If they need anything. They press the button and the caregiver can find exactly where they are in the home and come service them. It times how long it takes the caregiver to come get to them. It can track UTIs, dropped blood pressure all of this amazing stuff. So it really helps us keep our seniors safe and healthy and serve them as quick as we can.

Speaker 1: 20:50

So it sounds like technology is a huge component of success for someone in this industry. Cool, you know I talk a lot about on my show to. You know people that want to, you know leave their job and, you know, replace their income. Are there any numbers that you can throw out there or any figures that can help someone understand, like, how much they can actually make from investing in a facility like this? Is it base per bed? Anything of that nature like give you an example, like in real estate, you know we look at per door, so per door we might say you know you're making $300 a door. Is there any metric similar to that?

Speaker 2: 21:35

So the example I shared at the beginning, the 5,500 times 10 residents bringing in the 55,000 minus 35,000 of expenses, minus 10 of mortgage, that 10,000 net is what the owner operator receives. So for us, one door equals $10,000. That is the take home for you as the real estate investor and operator.

Speaker 1: 21:59

Yeah, that's real nice. That's one facility, five hours a week.

Speaker 2: 22:04

Exactly. It's by far the best single family home investing option. I mean, we have people all the time who come to us who own 40 doors of an apartment complex and they sell it and get into just one RAL because they can cash flow more. And that's an average. Home is giving you 10K and that's why I always like to share averages because I don't want anybody to get upset if I say more. But we do have plenty of students making 20, 30, 40k on one door, right, but average depending on where you are in the country, you can easily be making 10K net.

Speaker 1: 22:38

Gotcha. So if someone is ready to get started, they're listening right now and they want to work with you. Talk to us about the process to enroll in your program and what all they can expect from your courses.

Speaker 2: 22:53

Yeah, to get started, you could just head to ral101.com. You can download a free webinar, free book or schedule a call with me or the team and if you're interested in taking advantage of the offerings, we have our online home study course or our live three-day training. We host the live events in Phoenix, arizona, every six to eight weeks or so. We just finished one this past weekend, so there's one coming up real soon. There are three full days jam-packed of training A to Z, everything you need to know in this industry, so that you can get up rocking and rolling, feeling really confident about all four routes to get started how to raise the money, what you need in your business plan, what you need in your policies and procedures, how you're going to hire your staff and market for your residents.

Speaker 2: 23:39

We go through the entire gambit. We even show you case studies of our students all across the country. You know 10 years in this business with thousands of successful students. We've got a lot of success stories to share with you. So we showcase seven different home tours and we break down their numbers so you're seeing exactly what their cash flowing all across the country, and that's a really cool thing. I'm the lead educator and then everybody else who's there teaching beside me. They were past students, so they sat in the class, they soaked up the info, went back to their markets, opened their care homes and now they're back to teach and train you how to do the same thing.

Speaker 1: 24:18

I did have another question that just kind of popped up just to understand the whole funding component. So when someone is looking, because you're mentioning single family homes what type of loan products do you recommend? Would this be considered a commercial loan because it's pretty much operating as a business, or do your students still purchase it as a residential property?

Speaker 2: 24:42

It's still residential. It's not commercial, so it's residential. A lot of our students use SBA 7A loans, which will help fund the real estate, the renovation and carrying costs. So that helps them take them all the way through to when they're open and cash flowing. So that helps them take them all the way through to when they're open and cash flowing. Some people do syndication. We do an entire section on that in our training how to raise capital from private lenders. You can use hard money, bank money, you know whatever you want in that regard, but we like to focus on syndication and SBA 7A loans.

Speaker 1: 25:15

I need to find someone who's a SBA expert.

Speaker 2: 25:30

So point them my way. Typically with SBA, I've always heard that it takes a lot of time. But do you have an idea of how long it takes? Because all the documents that they require that person you know. They say, hey, you need all this, and it takes them nine months to pull together everything. When you're prepared, things can go a lot quicker. You just need to know what you're doing before you get involved.

Speaker 1: 25:49

What's the long-term vision for your company? Talk to us about that.

Speaker 2: 26:00

Yeah, our mission is to positively impact 10 million seniors by providing high quality residential assisted living in a home environment. So our mission is to just continue teaching as many real estate investors, entrepreneurs, medical professionals how to get into this industry so we can increase exposure, so we can take down the big boxes and hopefully make them not the main option. You know, at one point we all took taxi cabs everywhere, and now everyone's taking Uber. That's what we're trying to do. We're trying to disrupt this industry and say, no more, our big box is the only option. No more do your loved ones have to get terrible care for their last years of life. There's something better. You're gonna like it more. We just have to educate the market about it. So that's our mission, and the more people that want to join us, the better.

Speaker 1: 26:47

Sounds amazing. I really appreciate you Go ahead and close this out with your final thoughts or advice that you would like to give to someone who's interested in you know investing in your space, and then also close this out with your website, social media so we can connect with you. Thank you, awesome.

Speaker 2: 27:08

Yeah. So I would say final words. You know, if you're thinking at all about getting into this industry, just do something right. Whether you're going to become a placement agent, sell medical beds, diapers, or become a residential assisted living owner, do something. The baby boomers have been driving our economy for the last 70 plus years and that's not going away until they all go away. Okay, so follow the money. They set the trends, they set the tone, and this is your final chance to take advantage of that. The silver tsunami is coming. The writing is on the wall. You can do it. There's nothing stopping you from getting involved. So that's my little closing message, and if you want to connect with us, you can follow us on all the different social media accounts TikTok, instagram, facebook. You name it at RAL Academy and schedule a call with me or the team at RAL101.com.

Speaker 1: 28:04

Perfect, and I'll make sure to include that in the episode show notes. So again, thank you so much. Definitely an eye opener, so I'm sure the audience will love listening and watching this episode. So thank you so much.

Speaker 2: 28:18

Thanks for having me.