Every day, about 4,000 people become 85 years old. Every year, thousands of them need help. Many people are turning to residential assisted living (RAL). Not only entrepreneurs and business professionals who see it as an opportunity to make money, but for those needing help as they get older. Today, Toby Mathis of Anderson Business Advisors talks to Gene Guarino of Residential Assisted Living (RAL) Academy. Gene’s interest in RAL became real when his mom needed help. It was no longer all about a business opportunity to invest in and make money, but creating a perfect place for mom and making a community and worldwide impact.
Highlights/Topics:
- Entrepreneurial path that led Gene down the real estate road to RAL
- First property purchase as a real estate professional: No money down, no credit, no clue
- Keeping-it-all-for-myself mentality vs. willingness to share, teach and answer questions
- What is RAL? Converted single-family homes that provide the aging population with basic or advanced care, depending on their needs
- Moving in with your adult children, or going into a nursing home aren’t the only options
- Perception vs. Reality: Nursing home is 24×7 medical care; most don’t need such care
- Taking care of aging parents isn’t practical for most families; caregivers can suffer significant health consequences due to added pressure and stress
- Nursing home provides 24/7 medical care via doctors, nurses, and gurneys; RAL offers 24/7 assistance from qualified caregivers for basic, non-medical help
- The average cost for RAL is $4,000 per month, per room; what matters most is the quality of care, location, and price
- Three most common mistakes made when looking for RAL property: Wrong location, the wrong type of real estate, and trying to do it all – instead of hiring others
- RAL Academy: Educates and connects investors, operators, and owners interested in senior housing projects
Resources
Residential Assisted Living Academy
Insiders Guide to Investing in Senior Housing (Amazon)
Second Wind Success Radio Show
Tax and Asset Protection Event
Full Episode Transcript:
Toby: Hi, guys. Welcome to the Anderson Business Advisors Podcast. My name is Toby Mathis. Today, we’re joined by Gene Guarino. Welcome, Gene.
Gene: Good to be here with you, Toby. It’s been a long time since I’ve seen you, a few months anyway.
Toby: Yeah, gosh, I guess it was a couple of months ago. You’re stuck at one of the awesome residential assisted living groups. I love the fact that there are so many people getting into it. Hopefully, today we can spread some light onto this topic because it’s sorely needed, it’s one of those areas in the country that, not a geographic region, this is an aging of America and this is something that’s very timely. I’m excited to talk about it, I’ll contain myself. Let’s learn a little bit about yourself first off, so everybody gets an idea. I’ve known you for several years, you’ve known […] my office for what?
Gene: A long time. We don’t want to disclose how old we actually are.
Toby: Two months. Give me your path because I know you didn’t just walk in and say, “One day I want to be working in residential assisted living.” What was the path that you went about?
Gene: My path started way back when I was 18 years old with my first piece of real estate, that was actually because we had a business. I was a professional musician as a teenager, so we had a recording studio, a music school, small record label. We were renting the property, the landlord is bad, property was worse, ended up buying a house, no money down because I had no money, no credit, no clue, and that lead into fix and flip, buy and hold, small commercial.
Now, fast forward of my entrepreneurial career to about 20 years ago was the first time I heard about what I do now, residential assisted living, but nobody was there to teach me how. As I asked questions, people said, either I don’t want to share because I’m keeping it all for myself which is odd mentality or they work successful or willing to share, able to share because not everybody is a teacher. My interest went down until about the time when my mom needed help, that’s when things get really real, Toby. It’s not just money anymore or opportunity.
When my mother needed help with her own health needs and so on, wow, everything changed. That was eight years ago, and then I made a commitment to get into this because I couldn’t find a good solution for my own mother, so I vowed to create it. We called it residential assisted living, turning single-family homes into the assisted living homes. That’s all I do.
Toby: Residential assisted living, for people that don’t know what it is, just give us the 10,000 foot view. What is it really?
Gene: You take a single family home, make some modifications and those modifications are senior safe, so seniors can live there in a group home situation, 24-hour care, not medical, but they can’t stay by themselves. That assisted living in a residential setting could be a house next door, the average person is paying $4000 per person per month. There is a need for this all over the country. The average resident in that house is in their ‘80s, they need help with a couple of activities. Some need a lot of help, some need a little bit of help. With 24-hour care, you might have 10 adults in that home. The cash flow is tremendous, but we’re really helping other people as well.
Toby: Let’s go over perception versus reality. I’m in the same situation as you, Gene. I have a mom, she lives on her own, I worry about her. When she gets sick, it’s a huge deal trying to make sure somebody is there. She lives in a different state than me. I’m always trying to get her to move closer to me and she’s always doing the vice versa. We all have that situation. When folks get older, either they’re moving in back with their kids or the other option is what? To go into a nursing home or something like that. Is that a fair assessment of what you hear out there?
Gene: It really is. When we say nursing home, that’s obviously medical. That’s the point that not everybody needs medical attention where it’s 24-hour nurses and doctors available to them. Most people, when they age, they need some help, but not medical or nursing home. We do that in the clean level, it’s not the Golden Girls where they’re home alone with another couple of seniors. It’s not a nursing home or it’s medical, it’s right in between. That is a real mass growing need.
When I grow up, we had seven kids in the family. Seven kids are lots of kids, somebody is available to take care of mom and dad or move in, it’s okay. A lot of families today have one or two or maybe three kids. For somebody to quit their job or to otherwise put their career aside to take care of mom and dad is just not practical in a lot of cases. Bringing mom or dad to some place for that 24-hour care is a really good solution.
Toby: I was kind of surprised that it seems that people that are caregivers end-up suffering as a result sometimes. That added pressure of taking care of somebody seems to have some pretty significant adverse consequences on health. I just looked at this, the data. You probably know better than I do, this is your area. What do you see in that?
Gene: My mother-in-law is a great example, she’s in her mid-80s, my father in law, mid-80s. He needs assisted living, but she made the commitment, “No, I’m going to take care of him.” I said, “I appreciate that, and I love you both dearly.” He’s welcome to move to my home and live for free, which is a great benefit to have, but if you’re going to take care of him, please be careful, because she’s taking care of him. There may be a time where maybe he falls, she reaches down to pick him up, the next thing you know she tweaked her back and is lying in the bed now. That’s a direct thing, but just the quality of life, the inability to get around, they can’t go to some places these days as they used to, so that’s real.
Toby: This is the viable in between and it’s basically, just getting a residential home and making it habitable by, how many adults are usually living in one of these homes?
Gene: A lot of people here listening, you’re probably used to do rental properties with three bedrooms and two baths, 1800 square feet, an average cookie cutter box. That would really be the home that we’re looking at, we’d want a bigger home with bedrooms, more bathrooms in a nicer area. It might be 4000 or 5000 square feet, it might start with four or five bedrooms, but we convert space to make it eight or ten bedrooms. There might be 10 seniors or more on that house, sharing rooms or private rooms and adding bathrooms. It’s an average home from the outside, inside, you might have more bedrooms, more bathrooms. The caregivers come during the day and at night to take care of the residents who are there.
Toby: Is this medical like they’re providing medical services or is this, “Hey, I’m cooking meals and cleaning.”
Gene: It’s not medical and that’s really an important distinction, Toby. It’s not doctors and nurses and gurneys. They may go to a doctor’s appointment. A doctor may come in and visit, but they’re not needing medical treatment on a daily basis. If they did, they wouldn’t be a good resident for us. That resident may need help with bathing, with medication management, with food, with housekeeping, with other things as well, but nobody moves into assisted living unless they need help. It’s not a country club, it’s not there to play pick a ball and tennis and golf, that’s independent living. 55 and above, they go there to live their retirement years. This is when they need assistance and somebody to watch them.
Toby: Let’s start laying this out in the spectrum. You have somebody who lives in a home, if I say a home, like a house or a condominium or something like that, they’re by themselves, they always have the option of going into these adult independent living facilities. I’ve seen them in my backyard, where people go and nobody is really checking in on you, you probably have friends in the neighborhood. This is taking it to another level, what happens when somebody really does need to have somebody checking in on them on a daily basis? Maybe it’s to make sure they’ve taken medication, make sure they’ve eaten, make sure they’re able to take care of the premises like mowing the lawn and cleaning the house type of stuff.
Gene: It’s usually even a step above that because the average senior wants to live in their own home forever or as long as they possibly can. The average kids you’re going to hire or going to take care of mom and let them live in that situation the best they can. The problem is when we get to the point where you and I both travel a lot. If mom has a situation, she can’t just call us and say, “Can you stop over today?” You just can’t do it, even if you live close by, and you’re saying, “I’m working nine to five and now I’m going to stop over after work,” that’s one thing, but what happened between nine to five, did she need any help?
Again, it is in between those that independent living, they’re on their own and a nursing home where they need medical, it’s in between there but these people tend to need more help than less help. Usually, it’s an incident, nobody moves into assisted living, it’s usually an incident. Somebody fell, they go to the doctor, the hip isn’t broken, but the doctor or nurse or the caseworker says to the family, “She could fall again. He could fall again. Who’s going to stay home and watch him?” That’s where the conversation begins. You can’t give up the job, got to watch my kids and so on. Now, it’s either hire somebody to come into the home while you’re not able to or bring mom or dad into a facility, is what you would call a place or a residential assisted living home.
Toby: I’m assuming that this is timely, this is something that is really needed. Do you know the numbers on how many people are going to need this? It seems to me like you’re at home, maybe you hire in and have somebody that comes in and visit, I know that’s expensive. I’ve actually done that with my mom. She had the flu, and I had somebody there making sure that she was taken care of. My parents moved around, we’re not in the same state. I do have a brother that lives near, but we had somebody come in and just visit and stay. There’s that and then there’s something else. What you’re talking about residential assisted living where now you have multiple people and you have a set of eyes that’s on them. It’s not 24/7, right?
Gene: It is 24/7 care.
Toby: 24/7? Wow.
Gene: Yes, there are caregivers during the day. Here’s how it would typically work. There are let’s say 10 residents and there are two caregivers during the day and at night there’s one caregiver. That caregiver at night is awake and they’re cleaning the house and taking care of any residents that get up in the middle of the night, but 24-hour care, not nurses, not doctors, these are qualified caregivers according to whatever the state’s requirements are. Most states are pretty low, our personal requirements for our training in our home is very high, we want to be really good caregivers.
They’re being taken care of 24/7, all the food is supplied. If they need help with bathing and so on, everything from top to bottom that they need. The kids […] will come visit, whether it’s once a month or once a day, just come and visit for a few minutes or hours or the whole day. Some of our homes even have extra rooms so that this way if you’re from out of town, I want to stay and see mom, you can stay right there and eat dinners and meals with them as well. It’s a real home, not a hospital. It’s a home, not a big facility. It’s a small group and the caregiving ratio, five or six to one is the highest in the industry.
Toby: I’m starting to get my head around it. For somebody that’s looking at this, I’m assuming that this is a great investment opportunity. That’s why you’re going into that realm, is to fill a need. How strong is the need? I guess I want to nail down that. Do we have numbers on this?
Gene: You mentioned the number, so currently, there are between 77 and 79 million baby boomers, people born between ‘46 and ‘64, some people have passed away, but people have moved into the country to replace them. That means there’s an average of 4000 people everyday turning 85 years old. If we say that’s the median age for somebody to go into assisted living, not everybody who turn 85 checks into assisted living, but 4000 a day, that’s 1.4 million people this year and every year for the next 20 years, are turning 85. Every year, hundreds of thousands of those people will need help with this. The need is not the […], the rooms are full, there’s no room in the inn, it’s a crisis for those who don’t have resources and it’s a real opportunity for entrepreneurs.
Toby: You mentioned $4000 a room, that’s a private room?
Gene: That would be the average and that includes Medicare and Medicaid which we don’t deal with private pay which is the kids or the individual paying for their resources all the way up to long term care insurance and then the top of the top, so $4000 is really average. Most of the people on our homes are $4000 to $8000, that upper middle, not the top of the top, but that’s a lot of money. People don’t realize that that’s what it cost.
It really comes out of everything that somebody has accumulated. You’ve worked with them as an organization to protect those assets, but now they are in their last few years of life and it’s being liquidated. Their house is being sold, their pension is being absorbed, social security, stocks are being sold. All of that is going away at $5000 a month to take care of their long term care. I do want to make sure that everybody understands that there are really two opportunities in this, one is real estate and the other one is business. The real estate is great because you can own the home and lease it to somebody else, so operator of that care home. If you do, they’re going to want a five-year lease or a long term lease […] out which is good.
They’re also probably willing to take care of a lot of the basic maintenance, have a home warranty policy for the big maintenance issues that come up. They’re also going to be willing to pay a higher rent. Why? Because you’re going to be making so much money. You could just do the real estate or the business. The business is really where the money is made because out of that $4000 a month, if there are 10 residents, $40,000 a month, you’re net on that should be between 20 and 30% of that gross income. $8000 to $12,000 on that average home would be a good number to look at.
If you want two or three of those, we call that a three-pack that $10,000 a month times three homes can be very, very significant. But I want to back up one more step, everybody’s. We’re all going to get involved in this one way or the other. Right now, anybody who has a parent of age, I’m in my 50s and that means parents are typically in their ‘80s and ‘90s, that’s a parent of age. If […], it’s just, “Bam! We need to move mom into a home.” That could be $5000 or $10,000 a month just being sucked away from your future inheritance. Where if you have one of these homes today, they can move into the master bedroom and live for free.
Toby: Does long term care cover some of the expenses for people or is this something that’s coming out of pocket, insurance, anything like that?
Gene: We love long term care, it definitely is exactly what this is for. The reality, Toby, 90% of people don’t have long term care insurance. If somebody is 85 years old, they’re coming into assisted living and they have long term care, that’s a beautiful thing because probably they bought that policy 30, 40 years ago. It started with $100 a day benefit and cost to living writers, it’s now $250 a day or $300 a day. $300 a day times 30 days is $9000 a month. If it’s an old policy, it’s probably for a lifetime.
They move in and they’re paid for a lifetime, they’re taken cared, it’s a beautiful thing. When somebody comes to long term care, we love it. I’ll read the policy, I’ll take care of it, I’ll pick a room, it’s all good. If they don’t have the long term care, another solution is to get one of these homes. Now, you can move in when it’s your time, master bedroom, live for free, you’re leaving a blessing to the kids and not a burden.
Toby: Again, I have a ton of clients that do this. The homes that I’ve seen, you tend to get the high end homes, you usually look at it as a potential rental. I have a handful of these too. It’s not your typical residential assisted living, it’s for development disabled adults so they tend to be younger and they’re going to be there a lot longer, but it’s exactly as you said, they don’t want a year lease, they want three to five years at a minimum and they do pay a little bit of a premium, not just a little bit, but I would say probably 10%, 15% premium on that property to make sure that it’s a really good size, larger property, these are all five bedrooms in that case.
Is that what you’re seeing? Is that these are homes that normally wouldn’t cash flow for a rental and then someone’s taking it and saying, “You know what, great area, maybe they’re in a golf course community and something like that. Let’s make this into something where it’s a premium.”
Gene: In the industry, what we do would be considered luxury. You have to take that word with a grain of salt because that means different things to different people. When we say luxury, this is not warehousing grandma, it’s not 150 seniors together in a big converted hospital or even a brand new facility that looks gorgeous that Brookdale or Sunrise or Atria has built. It’s a house; a home. We like bigger homes and much nicer areas and that home itself is then going to have the conversion inside.
If we make it nicer, somebody who has money and has the ability to pay it for mom and dad’s care, they’re going to come in and say, “Yeah, I’m willing.” I rarely do tours of the homes, but my manager needed help and I’m in town so she said, “We’ve got somebody who wants to come back to see the house for a second time to do a tour.” I said, “I’d be happy to do it.” I ran out there, met with the wife of the resident, met with the daughter of one of the resident, and gave them the tour of the home.
The reality is, you know what I’m saying, “This room is $5500.” She’s like, “Okay, no problem at all.” “This room is $7500” “Well, the budget is not the issue.” That’s the kind of clientele that you want where it’s. “We love dad, we love my husband, we want to take care of them, money is not the issue.” As opposed to somebody who’s saying Medicare or Medicaid or whatever the state, poor mom. It’s almost like Section 8 in senior housing and that’s not…
Toby: That’s a horrible situation to be in too, that’s got to be like you’ve ended up in a box, that’s going to be the situation. For some of those of folks who’s going to be in this…It’s bad.
Gene: It is, whether it’s big or small. A lot of people who run these homes do a mom and pop model, it’s a small home, the kids moved out, they say, “We’ll stay in the back bedroom.” You and me, the husband and wife, we’ll partner together and be the caregiver and the manager and the cook, the baker and the candlestick maker. That’s not a business, that’s something that owns you, you don’t own it. We don’t do it that way, we pick the right location, that’s a number one. The real estate can be scraped away, rebuilt or remodeled.
You mentioned a couple of clients that you have, they did a gorgeous place in Kansas, and it’s just beautiful. It’s everything you could think of, first class. I went out there for the open house to see it, it’s just perfect. A beautiful place, a beautiful location. When the kids come, 56, you just say, the house is almost inconsequential, Toby. “Are they going to love mom? Is mom safe? Is she going to be well taken care of?” That’s what matters, not how nice is the furniture, and do you have silver teacups, that’s not it. It’s the caregivers, the quality of care, and location, and price and then, yeah, how nice is the house comes after that.
Toby: I think you once said, a house is not what you want to drive by, you’d want to drive to.
Gene: There you go, I love that.
Toby: I stole that from you, Gene.
Gene: I love it. Take them all.
Toby: No, but I think there’s a lot of truth to that. As you sit there, you go by somebody’s place and you don’t want to stop at it, I mean, you look at them and it looks like a prison. I tend to value independence and you want to value that your parent is actually getting some one on one help. It doesn’t have to be a parent, it could be, in some cases, even children. You’re looking at it say, “I want to make sure that there’s someone caring and giving them attention.” Some of those places scare the parents off. What’s the worst thing somebody getting into residential assisted living, what’s the big mistake that you see that you go, “Please don’t do that.”
Gene: We own and operate but we also train people how. Sometimes, people call us and say, “I bought a house and I think it’s perfect.” I’m like, “That’s not typically a good way to start the conversation,” because what they think is perfect is probably not because of location, number one, but very commonly, it’s like, “Hey, I got the house for free. It’s three-bedrooms, two-baths, and I’m just going to start here with three seniors in it or we’ll put two in a room and there’ll be six seniors in it.” It’s difficult to do this from a cash flow perspective with three or four, five, or six seniors. Really, you want to do it with 10 or 12 or 15 or 16. I know that sounds like a lot, but it’s really not in assisted living.
The location being wrong where it’s maybe a perfect house but it’s the wrong location, nobody is going to drive to it. That’s absolutely mistake number one. Two, the house is too small or inappropriate, maybe it’s a three-level townhouse. They’re like, “Oh, it’s downtown. It’s right near the library and the hospital and the grocery store. “No, no. they wouldn’t be living in assisted living if they’re walking to a library, okay?” Three-story townhouse with 600 square feet in each level, not a good thing for assisted living. So, it’s location, one, the wrong real estate, two, and I’m going to throw in one more.
You’ve been to our training, so you know when we do it, I start the whole thing with, “Is it okay with you if I share the good, the bad, and the ugly?” Everybody says, “Yes.” I love sharing that. The other thing is people who say, “I’m going to be the one who fill in the blank—manager, caregiver, handyman, whatever.” Don’t do that. That’s a big mistake. If you start off that way, it’s going to be really hard for you to get out of that mold. You got to start with, “I’m hands off. I’m going to hire the right people, empower them, give them the tools to be successful,” and then do your part which is to go get the second location, the third location while they’re doing their part which is the day to day.
Toby: Is it usually the person that’s good with the real estate is also good with the operator or vice versa or do you find them to be very different skill sets?
Gene: Different skill sets, yeah. You and I travel in the real estate realm a lot and talk to real estate entrepreneurs a lot, but the real estate is the easy part of this. It’s the easy part of it because you can find it and fix it up and scratch it away and build it again. It’s the human part, so the manager, the caregivers, the residents, the family, that part is where you really make the big money. I gave you some facts and figures, the idea of 20%-30% of their gross income so that would equate to a 20 cap or a 30 cap.
In apartments today, if you’re getting an A cap, you’re wetting your pants, you’re thinking you’re doing great. A few years ago, that was […]. When I say 20 cap, that’s incredible, but that’s because there’s a lot of moving parts, it’s not just real estate. Real estate the easiest part, it’s the most important, but not nearly as important as the business part.
Toby: I’ve gone and spoken to several residential assisted living associations. Tell me about yours and where it is and what you do, that sort of thing.
Gene: We have a, because we’re kind of the nexus of everything in regard to residential assisted living, we’ve actually formed the National Association—so it’s RAL National Association and ral.com is the website for that—where now homeowners from across the country can join. We gathered together to have the power of group buying, group lobbying, and then national marketing. That’s really the impetus for it. In the handful of states right now, meaning about eight I believe, or maybe a handful and a half, have an organization, that’s a state organization where somebody can find. Our mission is to bring all of them underneath our national group and then create groups within each state, so everybody has representation nationally and locally.
Toby: That’s really important. You’re in Arizona, right?
Gene: Correct.
Toby: How many homes do you have personally in Arizona?
Gene: I personally own and operate three homes myself. I’m invested in a number of other homes here and invested in many projects around the country, but I own and operate myself here.
Toby: Is the licensing different in all states? Are there some states where it’s easy, other states where it’s a pain the tush?
Gene: Yeah. Every state is different. There’s rules and regulations for each state. It’s not federally mandated or controlled, it’s only state, and then it’s local. Phoenix is different than […] and Dallas is different than Houston. Every location is going to be a little bit different. There’s some generalities of the do’s and don’ts and what you can and can’t do, but it is always local. It’s done in a residential setting. We’ve learned how to get past homeowners associations and speak to boards; the Fair Housing Act works in our favor in this case because you can’t discriminate against grandma. We’ve really gone through a lot of detail over the thousands of students we have across the country.
Toby: Yeah, tell me about that. If somebody is looking to learn about this, what are the options out there? Again, I’ve known you for quite a while and you’re the one that I’ve heard this from. I didn’t see many options out there.
Gene: We are really the only national option for residential assisted living. There are some people that individually train in certain states and typically do it from a mom and pop model. That’s the one I just described where you are the manager, you’re the caregiver, you live in the home, and this is a home-based business and you’re trapped in your home.
Toby: Which most investors don’t want to do. Most investors just want to say, “Hey, let me find properties, fine some good operators,” or maybe you’re an operator and you’re looking for opportunities to scale up your operation. Is this something that will be appropriate for that?
Gene: Absolutely. The training that we do, educate somebody whether you want to be an investor or an operator or an owner/operator where you own the real estate and operate the business. We actually created a whole other company called Family Legacy Homes just for the expressed purpose of investing in these senior housing projects. That works together investors, the people with money that wants to invest with project operators, people raising capital with their PPMs, and putting them together so that they can deal directly with each other.
The next phase on that—phase three—is we call it as we’ll have our fund that people can either borrow money or we can invest in projects but that’s in phase three. We’re in phase two right now of Family Legacy Homes.
Toby: You’re kind of all in on this whole idea that this is a massive need, it’s slow to being filled, are you guys keeping up on it or do you think that work towards, “Hey, there’s a lot of people out there that need this that cannot get mom or dad or junior into some place where somebody’s watching.” Is this like a crisis or is this stuff where you guys keeping up on?
Gene: It is a crisis in a lot of people’s eyes, it’s an opportunity in my eyes, your eyes, and entrepreneurs. To answer the question, are we keeping up on it, the industry itself is just exploding and the need is there. When you look at a chart, and if you look at a chart and see where the baby boomers start, it’s literally a spike in the chart that’s 1946. That, as it keeps coming across the chart, the aging of our demographics, that’s like a tsunami wave that we can see 10 years in advance. The baby boomers are not in senior housing yet, they’re in independent living but not assisted living, their parents are or they’re next, so that’s coming.
This business is really good now and it’s getting better and better and better. The big box of solutions, the REITs, the hedge funds and so on, are putting billions of dollars into the big box of solutions. You see it coming upwards to 200 beds and its multi-acre campus and independent living, assisted living, nursing home all in one spot, but not everybody wants to move to a hotel.
What we […] is another solution, a better solution, and I know it’s a better solution because we go to many of the conventions for the big box places. When I talk to the executives, whether it’s hedge fund managers, the owners of, the presidents of, and I tell them what we’re doing, they all without exception say, “Yours is where I want to put my mom. We’re trying to be like you—a home, we’re trying to turn this big box into what you’re doing.” They love what we’re doing but they can’t scale it yet, Toby, and this is a big opportunity. We’re doing one home at a time. But we have some students now who’s goal is to have 100 of these homes in a high-end level, that’s when the hedge funds will come in and say, “We would like to buy what you’ve got from its multiple.” That’s where we’re headed.
Toby: I could see that. Now, would you know that you have a residential assisted living facility nearby? When I say facility, a home, in your case. Obviously, I know when there’s a big one because they have a big sign out front, but if it was just in your community, would you even know one of this is there?
Gene: Probably not because it’s a home without a sign in front 99% of the time. There’s probably not a lot of kids running around or commotion and there’s not cars raising up and down the street. You’ll see a few cars in the driveway, not the resident’s, it’s the caregivers coming to visit. On occasion, you might have 10 or 12 cars but usually it’s just one or two. You probably would know it all. Unless there was some kind of signage out in front.
Toby: This is a home that’s just like any other home, the biggest difference is somebody is there 24/7 watching the residents, making sure that they’re fed, making sure that they’re bathing, that they’re clean, that everything is all honky-doriet in the house.
Gene: Yeah. Again, from a real estate perspective, it’s going to look just like any other house on the block, promote what’s happening on the care home side of it, that business itself being operated is 24/7. Caregivers are there, not medical staff, they’re taking care of the residents and their needs. Inside, the inner workings of it is different and unique than anything that others have done. The house on the outside looks exactly the same.
Toby: I could just tell you from my standpoint because I’m an avid investor, work with a lot of investors. This is one of those things where you’re doing some social good with it. I tend to push people like, “Hey, if you have a heart and this is something that’s speaking to you and you want to take care of some pretty significant needs, this is something you should take a look at.” If it’s just dollars and cents, I don’t know. I don’t know if […] on that, but when I see people that are just dollars and cents people, maybe as a lender, maybe as the real estate side, but I don’t know if I’d want them operating. Do you share that or…?
Gene: Not operating. We look at that as a three-legged stool. There’s business, there’s staff, and there’s the residents. You can’t be all about any one of them. Even if you’re all heart and say, “I just love people. I don’t care if they can pay me a dime,” that ain’t going to work. Or, “I’m all about business. I couldn’t care less about their health or needs,” that ain’t going to work. […] even balance of the three. I want to just say this too; Anderson has been tremendous for us in regard to how you helped us and all of the students that we have come through the training program. One of the things you inspired me to do years ago is the idea of setting up a charitable foundation and the opportunities within that, and that for me, personally, has been a game changer. Tax-wise, for sure, but the ability to do this on a higher level and doing good and doing well, so I thank you for that. I just encourage anybody who’s been thinking about it because I know you talked to me about it for a while before I finally got it. It’s like, “Hey, that’s […].”
Toby: I got a […] at you, “Give it away. Give it away, Gene.”
Gene: I’m like, “What an idiot? I should have been doing this forever,” so thank you.
Toby: […] When you’re doing assisted living, you can do it as charitable activity accounts. It’s a 501C3 if you actually wanted to run homes and things like that. You certainly can do it because it’s benefiting society.
Gene: Yeah, it opens up a whole other realm of opportunity, for sure.
Toby: Some people, again, the idea of making money on certain things is repugnant to them and they’re really idealistic and this and that. It’s like, “Great. You don’t have to make anybody […], give it all back.” And then there’s other people that are like, “No, I just want my money to make money.” Alright. […] heart.
Gene: You said this very succinctly, the idea of it’s not just the money. For investors, those listening, is impact investing. You’re not just investing, but you’re making an impact in the world, your community, and it is self-serving. You’re going to make money as well, but everybody wants to do something important. We work with family offices, these are people with hundreds and millions and billions of dollars, they’re looking to do good, not just get a return. Yes, their money has to be saved, but they have money that they want to put to work and that impact investing is really what they’re looking for. I think we all are.
Toby: I appreciate that. If somebody wants to learn more, I could your link up, but I know you have the academy and you have the association—two kinds of different things. If you’re already in residential assisted living, should they go to the association? And if you’re not, then you should go to the academy? What order? Should you do both?
Gene: I know you’re going to put a link in up there. I’ve got a free book to those who do go to the link to be able to download that as well. They could also go to Amazon to buy that, I’d be happy if they did that, but download it, it’s free. Toby will hook you up with that if you go to the show notes.
Toby: What’s the book?
Gene: It’s called the Insider’s Guide to Investing in Senior Housing. From that standpoint, it’s a good resource of tool. But it’s interesting you asked the question where should they start, I would say, if you have a home, consider coming to the training that we do at the Residential Assisted Living Academy. Come there because invariably, we had a couple of homeowners in the room this past weekend when we did out training, and they’re like, “Wow, we’ve been in business for eight years and we didn’t know this or this or this.” Sometimes people just assume they know it all because they’ve figured something out on their own. If you think of getting in, absolutely come to the training because there’s so many mistakes that you can avoid that will save you time, effort, money.
If you are already in the industry and thinking you know it all, go to the National Association because group buying, the national lobbying, the national marketing, we have a map, we’re showing your homes around the country, love to have your home there so we can bring some business your way. Family Legacy homes if you want to invest. But that link will get people kind of there to all those spots.
Toby: Perfect, Gene. I really appreciate your time. Is there anything else you want to throw at them or is that good for you?
Gene: I just want to encourage everybody. You’re always looking for something in life and I think you came here and listened to this because yes, you love Toby’s voice, you love his words of wisdom that he shares with you, but you’re looking for something meaningful, something that gives you passion, so find that, your why, and what gives you passion and then go for it 150% whatever it is you’re going to do. I just know, for me, I’ve found it, the radio show we had called The Second Win Success, I think a lot of people my age, are looking for something more meaningful to put our time, effort, money. It’s not just mass success but a significance to want to do something. There’s a huge need. We’re all going to become a part of it so you’re going to get involved one way or the other, you decide how. But I’ll give you the resources you need if you’d like them.
Toby: I certainly appreciate that. That’s enough said for me. This is the Anderson Business Advisor business brief. Thank you so much, Gene for joining us. We’ll make sure that people can learn more about you.
Gene: Thank you everyone!
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