From House Flipping to $1B: Brian Burke on Senior Housing, Market Cycles, and Demographic Trends

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The conversation explores the pressing issue of the shortage of senior living facilities across the country, highlighting the challenges faced by an aging population. It delves into the varying needs of seniors, from those who age in place to those requiring assisted living and skilled nursing care, emphasizing the competitive nature of accessing these services.

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Brian Burke (00:00)
80 plus population is gonna double within the next few years. And there’s not enough space for people who need assisted living, skilled nursing and memory care.

in current inventory and it’s cost prohibitive to build in a lot of cases and in a lot of markets. So there’s this supply constraint yet demand is intensely growing and there’s already a shortage. So here the difference is, is I don’t need people to move to an area for this to be successful.

Dylan Silver (02:02)
Hey folks, welcome back to the show. Today’s guest, Brian Burke, out of California, is the CEO of Praxis Capital Inc, a vertically integrated real estate private equity firm founded in 2001, and he’s acquired over a billion dollars worth of real estate over a 35 year career. Brian, welcome to the show.

Brian Burke (02:25)
Thanks for having me here, Dylan.

Dylan Silver (02:26)
It’s great to have you on here. I always like to start off at the top of this show by asking guests how they got into real estate.

Brian Burke (02:35)
Well, probably the same way a lot of people did where I started out as a small time house flipper because I read a book that said that you could buy real estate with no money down. And I thought, well, you know what? This is perfect for me. like, I was 20 years old at the time. I knew nothing. I had nothing. I knew no one. And I had no money. And I thought, well, if I could buy real estate with no money down, this book is speaking to me. So I made my first real estate purchase.

was a small little rental house. didn’t even own my own house, a small little rental house that I bought with no money down, if you can believe that. And I thought, wow, this really does work. This is easy. Then I learned later on that it’s not really all that easy to buy property with no money down. But that got me a start. And then I was addicted and never looked back.

Dylan Silver (03:23)
So I’m imagining those were single family home deals where they distressed properties, those first deals.

Brian Burke (03:30)
You know, my first one actually wasn’t really all that distressed. I just happened to find the right seller that I guess trusted me. And, you I got the loan from a finance company and they carried back the down payment.

And it was as simple as that. And then I got into more distressed properties and realized like, okay, it’s a little bit harder to find no money down assets. I need to start looking for distressed properties. got into buying foreclosed real estate. And for, ⁓ gosh, probably about the next 10 or 12 years, I was doing mostly, if not entirely, buying single family homes on the courthouse steps.

fixing them up and reselling them. And it became a really interesting business of buying discounted distressed real estate.

Dylan Silver (04:07)
Wow.

I am a fan ⁓ of the County Courthouse steps. When I was in Texas, I was pretty much enamored with the County Courthouse steps because I thought, wow, this is nuts. This is like an auction that’s taking place in 2025, right? And I can go and look and connect with so many different people from every, it felt like every area of the real estate space. had attorneys who are showing up.

Sometimes and I’m sure you have this experience Brian it almost feels like to these attorneys want people to know that they’re auctioning off this property because they’re kind of huddled in the corner over here and just kind of you know announcing this very quietly and then you have lot much larger what everyone thinks of when you go to an auction and people rattling off prices and so on and You I would get to meet so many amazing investors like yourself when you were in that space at the courthouse steps, did you have

the people that you would go with? Did you have a team? Were you underwriting these deals before you got there? What was your process?

Brian Burke (06:05)
Yeah, I was doing everything myself back then. was the lone ranger. And I mean, this was 1995, you know, that’s how long ago that was. And, and, know, I’ve actually been doing it ever since we bought one at the courthouse steps, you know, a year ago and, every once in a while we still, I still do that. But back then, before I had a team, I was doing it all myself. I was doing all my own due diligence. was, I learned how to do my own title research, learned how to, you know, run comps and value real estate and.

estimate repairs and the whole nine yards. You know, it was quite a business. then things really changed in 2009 after the great financial collapse and foreclosures went through this just absolutely skyrocketed. And at that point we were doing, I was probably buying 120 houses a year on the courthouse steps. And I had a big team. had 300.

houses going to auction every single day in a multi-county territory. And I had multiple bidding teams and had to write my own software and all kinds of stuff and created a real impressive business around it. But you know, the thing with foreclosures is it’s cyclical. I mean, there’s times when you’re drinking through a fire hose.

And there’s times when you can find a foreclosure, you if you were looking for one everywhere you looked. So, you know, I knew it wasn’t really a sustainable and scalable business. And that’s what pivoted me more into commercial real estate, income property, multifamily apartments, and most recently senior housing, assisted living, skilled nursing and memory care.

Dylan Silver (07:40)
When we talk about pivoting, think a lot of people, especially on the outside looking in, might say, well man, it’s so much effort to learn how to get in a real estate, to get that first deal, then to have a system at the courthouse steps and building a team and a hundred deals, and not to pivot into something else. It almost feels like you’re giving up a part of yourself. But I’ve spoken with so many folks on this show who’ve made similar pivots, and part of it is, you know,

If you don’t pivot, you might not be around, but also too, the real estate game you have to pivot. Even something that’s working great right now, five or 10 years from now, might not be working so great.

Brian Burke (08:23)
Yeah, that’s absolutely true. You know, we we had bought about 4000 apartment units, you know, starting somewhere in like the mid 20 teens, know, 2015, 16, 17, 18, 19.

And recognizing that the market was about to completely change, started aggressively selling our multifamily assets in 2021 and early 2022, literally right before the bottom fell out of the market. you know, I always say that investing in real estate is kind of similar to a stream that meanders through a meadow. If you’ve ever seen a stream through a flat meadow, it curves left and right and left and right. And if you’re in that stream and you’re rowing your boat,

And all you know how to do is row in a straight line, you’re going to run aground. You have to learn how to turn left and turn right to follow the current of the stream. And so one of our turns was when we decided to start selling multifamily, we got out of, you know, three quarters, at least of our multifamily portfolio before the bottom fell out, was just recognizing there was a shift of foot. And then for three and a half years, I didn’t buy a single thing from 2021.

through 2024 did buy anything. then in 2025, starting in June, bought $130 million in senior housing because we shifted recognizing like, multifamily, there’s just no opportunity in it right now. I think there will be, unless you’re a smaller investor that’s building up a personal portfolio, great time to buy right now. But if you’re a syndicator and your business is to generate returns for investors and you’re buying at scale,

It’s just a little bit early and last year was not the time at all. So, you know, looking at demographics, we pivoted again and shifted into senior housing, recognizing there’s a massive tailwind there. So I think part of being successful in real estate is just recognizing where the current is going and being able to steer your ship ⁓ to follow the downstream current and not have to spend it paddling upstream.

Dylan Silver (11:03)
I want to ask you because I’ve had so many guests recently on the show in the multifamily space across various segments from, you know, small multifamily under let’s say 50 units up to very large ⁓ multifamily hundreds or thousands of doors. And then you’re in the senior living space. I’ve had a couple of guests in that space as well. When you’re looking at deals.

Is there a telltale sign for you ⁓ that this is a good deal, that there’s something there? Is it strictly the numbers? Is it motivation? Is it a combination of factors? And then also how much does in the multifamily space the strength of the market in that area come into play as well?

Brian Burke (11:53)
All of that comes into play and yes, we have to do all of that stuff that you mentioned, but the caution that I can give to the listeners here is that what I look at and what you look at may be two very different things depending upon your strategy. So if I’m out there buying small multi, maybe four plexes, five units, 10 units, 20 units, and I’m collecting this from my own personal portfolio,

where I plan to hold this for maybe the rest of my life or well into retirement, I’m gonna look at one set of things, right? But if I’m doing this because other investors are gonna be investing into a larger deal, like let’s say a 200 unit apartment complex, the largest single deal I’ve done is 540 units in one complex. So when you’re doing those kinds of transactions and you’re

bringing in capital from outside investors, I’m looking at an entirely separate set of things than what you would look for if you were just making a personal investment and collecting a portfolio for your own future retirement or wealth building. it really depends on your strategy is going to dictate what things you should be looking at. to answer your question about markets, absolutely the market that you’re investing in does matter.

and will definitely dictate how easy or difficult your road ahead will be.

Dylan Silver (13:23)
When I think about the senior living space, mean, aging population, I can’t imagine that there’s enough senior living. I can also imagine that there’s a lot of demand for this, that these senior living facilities are maybe not as affected by some of the other market conditions that other segments of multifamily have been affected by. Is that true?

Brian Burke (13:51)
There’s an old saying in real estate that says that if you want to make money in commercial real estate, follow the demographics. So when we were buying, you know, multifamily, we were buying a lot of it and we were buying in markets where people were moving to and avoiding markets where people were moving from, because you want to capture the influx of population because an increasing population, job growth, income growth, ⁓ household formation.

Population growth, those things drive multifamily assets. Senior housing is kind of different. It’s a different follow the demographic. Here what we’re looking at is the aging senior population.

80 plus population is gonna double within the next few years. And there’s not enough space for people who need assisted living, skilled nursing and memory care.

in current inventory and it’s cost prohibitive to build in a lot of cases and in a lot of markets. So there’s this supply constraint yet demand is intensely growing and there’s already a shortage. So here the difference is, is I don’t need people to move to an area for this to be successful.

All I need them to do is stay put and get older. And I guarantee you that’s going to happen. People are going to get older whether we like it or not.

and they’re going to need a place to go. So it’s a very needs-based use of real estate versus an optional use of real estate. And I think that’s a real important place to be right now.

Dylan Silver (16:01)
When you’re looking at these deals, I’m imagining the senior living space is different from every other space, because there’s a lot more management that goes into it. You’re having to have nursing staff. You’re having to ⁓ manage, ⁓ really, would say, folks who need more daily assistance. And so when you’re looking at that, is there multiple ways to add value to

the senior living facilities? Are there senior living facilities that may not have the management in place? Or when you’re looking at something like that, would you shy away from that? Because they may have burned their reputation in the market.

Brian Burke (16:43)
You know, all of the same things that you’ll find in any other type of real estate you’ll find in senior housing. So, you know, if you’re looking at multifamily, you’ll find really bad operators and bad managers that have run properties into the ground. And, you know, in the senior space, you’ll see the same thing. You’ll run into bad operators from time to time.

who have really made a mess and you can clean those messes up and add a lot of value. And there’s a lot of ways that you can add value. you know, primarily our approach to this business is to not be patient care providers ourselves, because we’re real estate people. And that’s what we understand, right? We understand finance. We understand debt and equity. We understand, you know, real estate and demographics and location and all of those things, you know, the physical plant. that’s what we

specialize in. So rather than trying to now become patient care providers and saying like, I’m going to become an expert in hiring nursing staff. No, that’s not the way to approach this business. Some people do it and then they end up falling flat on their face. And then you see these opportunities where, you know, there’s a lot of value add for the next guy. Our approach to this business is much different. So we’re

We’re partnering with operators who are experts in their local geographical area at providing senior housing patient care. And we’re putting them in the facilities that we’re acquiring. And we were doing it one of two ways. We’re either signing a triple net lease with an operator. So we own the real estate, the operator triple net leases it from us. They provide patient care. They have to hire the staff and, you know, and do all of the things.

and they pay us rent. So it’s just like being a commercial landlord, but we’re a commercial landlord in an asset class that has intense demand and a lot of upside. And another way that we approach the business is the joint venture with an operator and say, okay, we want you to run this facility for us, but you have to invest cash in the deal and you can’t, have to have a vested interest in the outcome. And they become kind of an

If you were to parallel this to the multifamily industry, it’s kind of like them being a management company, like a third party management company. It’s a third party operating company for healthcare. And so it’s kind of the same type of a relationship, but instead of just hiring them and paying them a management fee, they’re actually investing in the deal alongside us and, you know, and not just collecting a management fee.

Dylan Silver (18:57)
Yeah.

When folks think of aging population, senior living, they might think of some states like Florida, Arizona, right? But you also mentioned earlier on in the show, wherever there’s people, if they stay put, they will need to be senior living facilities in that market. So I’m thinking of places like even Denver or Chicago, ⁓ the Northeast. Do those areas as well not have enough senior living facilities?

Brian Burke (19:40)
nowhere has enough senior living facilities. There’s a shortage pretty much everywhere. And there’s everywhere you’ll find an aging population. It’s very agnostic. People may go to Florida to retire, but there’s a lot of people that stay put all across the country and get older. And some of them never need any senior housing space, right? They may just stay in their house, age in place, be totally fine, lead an active lifestyle and suddenly have a heart attack and never actually need

any type of residential care. But there’s a segment of the population that ages and ages very slowly and you get into a state of decline where, you know, now you need assistance, right? You need somebody to help you get up out of bed or if you fall, help you get off the floor. Or, you know, if it gets to a point where you need 24 hour skilled nursing care, that’s something you need. It’s not something you do because you want to. It’s something you do because you have to.

And you’ll find that all across the country in every city is going to have people that are in that situation. it’s most cities will have a deficit of inventory for those folks. And it’s very competitive to get in.

Dylan Silver (20:51)
Are there now developers that are looking at heavily developing out these types of facilities? also, follow up to that is, are they partnering with the types of third party organizations that do the patient care or are they coming in themselves and trying to do everything under one house?

Brian Burke (21:12)
Most of them would partner with somebody that’s gonna do the actual patient care element. There are some larger senior housing REITs that are vertically integrated and they have their own ⁓ management arm that’s separate from the REIT but still has some ⁓ common control. ⁓ But generally speaking, you’re gonna find that there’s gonna be operators that are out there and the owners tend to be separate from the operators. Now, are people building?

In some areas, yes, they are, but most of what’s getting built right now is the ultra luxury stuff.

⁓ There’s a lot of ⁓ CCRCs being built, is a continuing care retirement community where they have an whole array of patient acuity. You can go in as independent living. And then when you need assisted living, you can move to an assisted living unit. And then when you need skilled nursing, you can move to a skilled nursing bed, all within the same property. And some of those places will charge a million or $2 million just to get in, just as an entrance fee on top of the monthly.

⁓ rent that’s due in addition to that. That’s where a lot of the development is focused and concentrated because the only thing they can make pencil average everyday senior housing, assisted living, skilled nursing and memory care is just not penciling for new construction right now. Case in point, we just bought ⁓ two facilities from a lender. ⁓ They were lender controlled following a lender takeover pre foreclosure.

Dylan Silver (22:29)
Hmm.

Brian Burke (22:39)
⁓ For thirty five thousand dollars a bed and it would cost over two hundred thousand dollars a bed to build those same properties in their newer facilities are only like fifteen or twenty years old newer facilities so. When you have that kind of stuff happening out there it’s very difficult to make the numbers work for new construction and part of the reason for that is that the senior housing spaces at the bottom of its cycle it’s.

It fell dramatically after COVID, after the COVID disease literally wiped out senior housing, valuations tanked, ⁓ properties went into distress.

And it created this incredible opportunity to buy it basically the bottom of the market. But if you’re old enough to remember the housing market in 2009, after it was bottoming out, nobody was building housing because how could you when foreclosures were selling for a hundred grand and it costs 350,000 to build a new house, nobody was building any houses. So we’re kind of seeing the same thing happening now in senior housing where, you know, you can buy existing assets far cheaper than you can build them. So why would you build them?

Dylan Silver (23:45)
Why would you do it, right? ⁓ We are coming up on time here, Brian. Where can folks go to ⁓ learn more about Praxis Capital Link or how can folks get in contact with your team?

Brian Burke (23:58)
Yeah, the best ways is through our website. It’s praxcap.com. For our senior housing investment opportunity, you can go to investwithpraxis.com. You can also follow me on Instagram at investorbrianburke or find me on biggerpockets.com in the forums, just answering questions for everyday real estate investors.

Dylan Silver (24:21)
Ryan, thank you so much for coming on the show here today.

Brian Burke (24:24)
Thanks for having me here, Dylan.

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From House Flipping to $1B: Brian Burke on Senior Housing, Market Cycles, and Demographic Trends

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