Putting an elderly family member in a nursing facility is an option that many feel uncomfortable choosing. But some circumstances leave us no choice, especially if an elderly parent or grandparent needs full-time care. In this episode, Isabelle Guarino – Smith shares her story of how she stumbled into Residential Assisted Living after her own dilemma of either staying in her job or taking care of her grandmother full-time. Ultimately, she chose to do both, leading her to this particular business niche. She also explains the difference between a nursing facility and a residential assisted living, diving deep into why the latter is a better alternative for elderly care and keeps your cash flow coming. So tune in to this conversation and hear how Isabelle found an opportunity in residential assisted living and how you can run one yourself.
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Residential Assisted Living With Isabelle Guarino – Smith
I’m very excited to be here with Isabelle from RAL, which I’m sure she’s going to elaborate a little more on. Welcome, Isabelle. I’m excited to be with you.
Thanks for having me. I’m glad to be here.
We are excited to know what you’ve got going on and all of the incredible things happening in your business. Do you mind starting and giving us a little background about yourself and how you came into this family? It’s a family business.
RAL stands for Residential Assisted Living. We teach and train on senior housing in a residential setting. It’s not like a big box facility but in a single-family home in a regular neighborhood. How I got into this is my grandmother fell. She broke her hip and the doctor was like, “She can’t go home alone. What are you going to do?” Like many families who have a loved one, it’s that overnight thing where it’s like, “Are you going to quit your job and take care of them full-time? Are you going to get in-home care, which can be incredibly expensive or do you put them into a home or a facility?” You feel guilty as soon as you even say it.
The reality of the situation is what’s the best choice for you, your family and those needs? That happened in my family, with my grandmother. My dad and I went and searched for everything in anything we could for her. We felt uncomfortable with the options that we found available. They were incredibly expensive. The care was sub-par. They smelled and felt bad. It was not good. My grandmother was living in New York. We were living in Phoenix, Arizona.
We thought, “There’s a lot of older people out here. There’s got to be some better options.” We stumbled into Residential Assisted Living, found one of those homes, did quick math and realized, “We either are going to be paying $5,000 a month for her to live here or own the real estate in the business and be cashflowing $10,000 a month. She could live here for free.” It’s no brainer that we’ve got to do this when we purchased the real estate and the business with the intent to move her in and the rest is history.
How many years have you been doing this?
We purchased that first home in 2012. It was for our family. Once we got into it, we realized, “This is such a better alternative than a big box facility. People want and need this. It’s a good option. We have to teach as many people as we can about this. Not only are they exposed to the different options but those who are real estate investors might want to get involved in this for the same reason we did, a solution for their family and the cashflow option.”
Not many people would do that but how smart? It’s an issue. I talk to friends all the time. I have elderly parents and they’re in difficult situations in finding a solution. Overnight, it’s like, “What do we do?” What exactly is assisted living? How is it different than a nursing home?
When you need assisted living, you need help with usually 3 to 5 ADLs, Activities of Daily Living. That’s anything we do from the moment we get up out of bed to go to bed, including getting up, bathing, taking a shower, going to the bathroom, brushing your hair, brushing our teeth, medication, eating, all of those different things. Typically, a senior needs help with 3 to 5 of those by the time they move into an assisted living home. A nursing home or nursing facility is like doctors, gurneys and IVs. It’s medical attention.It's not about finding better employees. It's about being a better employer. Click To Tweet
You can get the Residential Assisted Living home licensed for assisted living and get it licensed for memory care but you can’t get a residential home license for nursing care because it’s truly living in hospital. A big box facility is probably the most comparable to what we do because they’re offering help with activities of daily living but their costs are much more. Their caregiver-to-resident ratio is much worse than ours and the ability for them to control things like COVID.
They got hit real hard during COVID because there are hundreds of seniors in there and hundreds of staff members coming and going. That’s hard to control but in ours, where it’s one home, it’s the same people in and out every day so it was a lot easier. Those are more comparable but still very different in many regards.
How much can you do realistically to own an assisted living care home?
We teach people how to own the real estate and the business together, just own the real estate or JV partner and be a private money lender on this. Those are the three different ways that you could get involved. The main way that we teach and train in our academy is to own the estate and the business like McDonald’s. You not only have that real estate play of the appreciating asset. Usually, these are upscale homes in nicer areas because every state has a limit on how many residents you can have in the home.
It usually falls between 6 to 16 residents. In Arizona, where I am, we’re limited to ten. All of my homes are 10 bedrooms and 10 bathrooms. They didn’t start that way. We had to convert them to become that way. That’s what teaching and training how to do. It’s like how to acquire the real estate, renovate it, get it licensed and hire the staff so that you can be in the owner’s box and not work in the home on a day to day. That’s not what we do. We run it pretty passively. That’s what I want to show other people how to be able to do.
With what you train on, there’s got to be some rules and regulations that play in effect. Do you know a few examples of variable states? New York compared to Phoenix was a similar situation but what would be the difference?
There are different rules and regs in every city, state and even county. The biggest thing to remember is this. We have students in all 50 states. This is happening all over the country. There are 30,000 of these Residential Assisted Living care homes in our country. It exists. It’s happening. It’s not that it’s not. It’s just about finding those specific rules and then following them.
It’s like baking a cake. You get the recipe. If you can follow it, you can do it but you’ve got to find it, follow and play by those rules. I love rules and regulations because I don’t want anyone to be able to get into this industry. I want there to be hoops to jump through. We’re talking about seniors’ lives, people’s lives. It shouldn’t be easy to get into this. I’m okay with that because the reward is great, not only financially but also in the impact that you can make on families, whether it’s your family or other senior families, as well as for the caregivers.
Many caregivers are overworked and underpaid in big box facilities. They’re so over it. That’s when we hear those stories of bad situations. It’s because these people are in a terrible work environment. We’ve got to do better. I like it for that reason. For example, the distance rule. Every state has a rule on distance. One care home can be from the next care home. It’s just finding out what yours is in your area. Is yours have to be 1 mile apart or 200 yards away? What does that look like? Everyone has the same rules. It’s those little new things.
This is a family business. You started from the very beginning.
My dad had been a real estate investor for 40 years. He owned a bunch of all sorts of homes, fix and flip, single-family rentals, short-term rentals, all sorts of stuff. He knew what he was doing but he didn’t know assisted living.
He was an incredibly smart man. I met him several times.
Thank you. For him, it was like, “I know what I’m doing. I have a learning curve here but let me see if I can figure this out because if what I’m seeing is true and the silver tsunami is coming, 77 million Baby Boomers aren’t in assisted living yet but in the next years, they will be.” We’re $1.3 million beds short.
There is only $7 million in the silent generation, which is who’s there. We’re talking about doubling the amount of demand and we’re already that short. It’s going to happen like that because you don’t know when you’re going to need it. It’s just all of a sudden, you need it. You don’t move into an assisted living for funsies. You need 24/7 care. The doctor’s saying you can’t be alone.
My dad got jumped right in. I was a flight attendant at the time when I saw what he was doing. I realized, “What’s going on here?” I’d always been interested in what he was doing. I knew he did real estate, investing and stuff. I realized, “You’re happier and lighter making all this money. What’s going on?” He sold everything else he did and only went into assisted living for the last ten years of his life. He passed in 2021.
He doubled down on this. He was like, “This is it. I see the trend. I know the money and this is happening.” We made it work. Over the course of me watching from the outside, eventually, I’m like, “Do you need help? Can I can be a part of it?” I weaseled my way in there to become his assistant and then become the owner of our company and it’s been a lot of fun in the meantime.
Are there other siblings in the company too?
My older sister and youngest brother worked with me. My other brother did work with us for a long time but he’s taken a little hiatus. He had his first baby so he was focused on that. We have uncles, cousins and all sorts of people who work with us. We’re a team of 50. Are you originally from New York too?If the property is right, the property is right. Click To Tweet
Yes. I’m from the Northeast. That’s why I hit it off with your dad too. He was always kind and nice but I was like, “Is he from Arizona?” They all make sense. What a visionary to be years ago, sit back and from a personal situation, have a vision and perspective of where everything was going. I have a family that works in healthcare. I know the exhaustion, frustration and long hours. They’re in a more small intimate setting but it’s as hard. One gets sick and they all get sick. It’s challenging for sure. I see it personally with my family members to the point of exhaustion.
Any business is a three-legged stool like your client, which for us, is the senior resident. With the business, you have to make money if you’re going to do anything and then your staff. A lot of people forget about that. They’re like, “It’s all about the seniors and the money.” Your staff is so important. They’re the face of your company, the vibe, feel and everything. You need to make sure that they are being appreciated.
A lot of people say, “It’s going to be hard to find good employees or good staff.” I’m like, “No.” Over The Great Resignation, everybody quit. They surveyed and said 70% of people who left their job did not leave for more money. They left because they didn’t feel appreciated. If we’re going to spend most of our lives at work, it’s fair for them to say, “If I don’t feel loved and appreciated here, I don’t want to spend my time here.” Why don’t we understand that in any business?
To me, it’s not about finding better employees. It’s about being a better employer. What are you going to do to make them feel wanted, loved and appreciated when they come to work? Love is a weird word to use in business but it’s true. You will feel good. I’m asking you to be here all day, every day. You’re not going to last very long. When you feel respected and appreciated, you’re thanked for the hard work that you’re doing and you feel you’re being paid fairly or compensated fairly in whatever regard that is, you’re going to be loyal and stay because if that can you happy, then it’s a non-issue. Everytime someone’s like, “I can’t find good people,” I’m like, “It’s on you.”
I take care of my team too. I can understand. It’s not residential assisted living but in any business, they’re my family. It’s all about them too. In your case, especially like somebody with a parent, aunt, uncle or grandmother, family member. What can you tell me about what you are teaching and what you’re having success with? In our economy, are you seeing anything different?
It’s been interesting because I mentioned COVID and how it affected a lot of the big box facilities. In our homes, we did not see nearly as big of an impact in the sense of it was a lot easier to control what was going on. We did not lock them down and say, “You can’t leave.” First of all, I don’t think that it’s very healthy for people to be stuck inside. We need sunshine, touch, love and being around family and people that make us happy. When you’re inside in a dark place alone, no wonder people are dying from this.
We were able to see a positive shift in the market for us where people started saying, “Smaller is better.” I want to move my parents from a big facility to a smaller one. We’ve seen demand go up as far as clients go. When it comes to the real estate side of it, things have been going crazy over the last couple of years. The good thing is that I always say, “You’re buying the house and dating the rates.” Rates are going to come and go. We can fix it later. People are stressed out like, “I can’t buy. The rates are so high.” It’s like, “We’ll figure it out.”
You refinance it later when the rates go down. There’s another solution.
If it’s the right time for you to be doing anything, whether it’s buying your home or doing a business, then it’s the right time. It’s you more than it is about anything else. In these homes, I don’t mind paying full price for homes for a residential assisted living because my bottom line is going to be so good that it doesn’t matter what I’m paying in that regard. If the property is right, the property is right. For us, it’s super heavy on location. You have to be whether 50 to 70-year-old, upper-middle-class homeowners near them.
Facilities like a hospital, I would presume. Is that part of it?
If you can be near any of that, that’s great. You don’t want to be over the river and through the woods.
I live out in the middle of nowhere. I’m 1 hour and 20 minutes from any major hospital.
We don’t want to be there.
You don’t want liberty taxes.
We want to be near what we call Daughter Judy. That 50 to 70-year-old, who’s upper-middle-class because she’s the one looking for mom or dad’s care. She’s usually the one looking for it, paying for it, visiting mom or dad. She doesn’t want to drive for two hours to go visit. She wants to go 5 to 10 minutes on her way home from work. Identifying those pockets of that upper-middle-class older, 50 to 70 and then saying, “This is where we want the home to be,” is the best way to go when you’re looking at a location.
I’m okay paying for more because my bottom line is going to make it worth it. I don’t want people to be scared to start businesses and things. Millionaires are made in recessions. The poor are going to get poorer. The rich are going to get richer. It’s up to you to decide which one you’re going to fall in because the middle class starts to dissipate and fall into either category. It is your choice. What are you going to do? If you sit back and let it happen, I’m pretty sure you’re going to fall into one I don’t think you’re going to be happy with.
When you first started this years ago, if you could do something different or go back to your younger self, what would you tell yourself? Starting in this niche of residential assisted living, what would be 1 or 2 things you would tell yourself?
It took me a minute to realize that even though I had gone through it myself with my loved ones, you forget how emotional this is. It’s not a fix and flip where you can sell it. This is a full business. It’s very emotional for everybody involved, from your caregivers to your seniors and specifically that family. As a real estate investor, you get excited about the real estate side of it. You’re like, “Look at this beautiful home and this and that.” They’re like, “Are you going to love my mom?”If anything, residential assisted living is a solution for you and your family. And if you can be cash flowing all the while, why wouldn't you? Click To Tweet
It’s like a mind switch because you’re excited about all this hard work you did and look at this beautiful thing. They’re like, “Are you going to feed her healthy food to keep her alive the longest? Who’s going to be there to care for her when she needs something? Are you going to over-communicate with me?” That’s what they want to do. They want a nice bedroom and bathroom but that’s not what they’re worried about.
Put on those goggles and realize what you’re selling is not the bedroom or the bathroom. You are selling the love, care and a dream that they can feel less guilty about putting their moms somewhere. They need to feel that relief. The only way they’ll feel it is if they know they can trust you. I thought it was a physical sale but it is an intangible sale. That was a big switch. I wish I had recognized that sooner. It’s been important. I love to share that with people who want to get into the industry because I’m like, “Look at this gorgeous home and everything I’ve done,” then it’s like, “No.”
That’s not what it’s about. The only reason I could see that is that I have family members that work in it 24 hours a day. They’re working day and night, 24 hours around the clock in some cases and it’s all about the client. I think about myself, for example. I’m younger than my husband. I often think about those things like, “He’s older than me. What would happen?”
I would never want my husband to be in a facility or some random nursing care center at all. I wouldn’t want any of my family to be so. I think about that because I have family that works in it. I hear the stories. I’ve been there for my sister-in-law several times when she’s at her breaking point and I’ve seen it firsthand. I love what your golden little change would be because when you put on a new set of goggles, it makes a difference as you had for your family. You’re doing an incredible thing with the assisted living academy.
It’s been fun, even the impact that we’ve been able to have on the investors and the entrepreneurs who come to the training to learn how to do this. I’ve seen guys who have been in this business for years, our system of our successful students. Every time I see them, I’m like, “You look younger and happier. “They’re relieved because they’re like, “I’m making a difference in the world. I make money.”
At that point, making money is your focus and then it switches to like, “I want to give back, make a difference in the world and make an impact. I don’t know where that is in everyone’s life. Most people hopefully get there to some point where they’re like, “Let’s let my money do something good.” I love being able to see our students come in and have that switch and then they’re looking younger and feeling happier. I’m like, “That’s amazing.”
It’s fun to be able to watch people’s lives transform from getting involved in this. That’s a big blessing for me to be able to guide people down that path and whether it is or isn’t right for them as an investment project, I want as much exposure as we can in this industry because what’s happening in those big facilities is not okay. We have to have an alternative. To me, this is one of the best. It’s like Uber. The first time you’ve gotten an Uber, you freaked out. “I have to download an app. I don’t know this person. I’m in their car.” You get in and you’re like, “This is way better.”
I’ve been in some bad ones. I’m like, “Where am I in?” There are dirty plates on the floor. I’m like, “This is not happening.”
I feel like that’s residential assisted living. You get in for the first time and you’re like, “This is way better than the cab I’ve been in for years.” You will get into some bad ones. Occasionally, you’ll go in. It’ll be not good but it is a better alternative at the end of the day. It’s important to expose people for maybe their needs but then also investors and entrepreneurs like many of your readers to have an option for themselves. I heard everybody do one of these because, if anything, it’s a solution for you and your family. If you can be cashflowing all the while, why wouldn’t you?
For our readers, they can get more information on the academy, RAL Academy at UndergroundWealthSecrets.net/RAL101. Before we end, are there any last things you’d like to say for our readers?
First, I want to thank you for having me here. It’s been a lot of fun chatting with you and catching up. For readers, if you are looking for something new or different, nothing is safe and secure when it comes to the investing world but when you research and you look at those numbers, you see what’s to come.
This is going to be one of the safe and secure things that you can invest in over the next years, which is pretty exciting. There are going to be even more demands than we’re seeing. If you know anything about supply and demand, you want to follow that and be in a place where that makes a lot of sense.
I would urge you to do your research or check out that link because we got free books, free phone calls or whatever you want there to learn a little bit more and educate yourself on the topic and how you plan to ride the silver tsunami. If we can help you with that, we’re always here for it.
Thank you so much, Isabelle. You were incredible. I’m honored to have you on the show.
Thanks for having me.
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