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The Senior Housing Gold Rush: Why Residential Assisted Living Is Exploding for Real Estate Investors


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Show Summary

In this conversation, Isabelle Guarino discusses the growing field of Residential Assisted Living (RAL) and its significance in the context of an aging population. She shares her personal journey into the industry, the unique aspects of RAL compared to traditional assisted living facilities, and the opportunities it presents for investors and real estate professionals. The discussion also covers marketing strategies for filling RAL homes, the role of placement agents, and the regulatory landscape surrounding assisted living. Isabelle emphasizes the importance of being proactive in marketing and building relationships within the community to ensure success in this sector. She concludes by introducing her new book, ‘Assisted Living Revolution’, which explores the emotional and financial impacts of assisted living on families.

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    Investor Fuel Show Transcript:

    Isabelle Guarino (00:00)
    The silver tsunami of seniors is coming. You just have to figure out

    what your lane is, whether you want to be an owner operator, sell diapers or be a placement agent, figure out how you’re going to take your piece of the pie because it is coming whether you care or not. And this is one of those opportunities that really generations don’t see.

    And if you take advantage of the next 20, it could change the rest of your life.

    Dylan Silver (02:00)
    Hey folks, welcome back to the show. Today’s guest, Isabelle Guarino is a two-time best-selling author named one of the top influencers in senior housing. She’s been featured on Bigger Pockets, The Wealthy Way, and Sales Disruptors. She’s the CEO of Residential Assisted Living Academy, sharing the message of doing good and doing well with 100,000-plus entrepreneurs and investors across the country. Twice she’s been named the future leader of Assisted Living. She’s the nation’s top coach and trainer for all things Resi-

    Residential Assisted Living. You can find her online at ResidentialAssistedLivingAcademy.com. Welcome to the show, Isabelle.

    Isabelle Guarino (02:38)
    Thanks for having me, I’m really excited to be here.

    Dylan Silver (02:41)
    Now, we were talking before hopping on here. It seems like all roads residential assisted leaving maybe lead to you. So you’re kind of the nexus of residential assisted living. I guess starting off at the top, how did you get into this space?

    Isabelle Guarino (02:57)
    You know, personally, we got involved because my grandmother fell, broke her hip, and she needed assisted living. And so we were looking for an option suitable for her. And every place we went into smelled bad, was expensive. They had wait lists, the care was terrible. And we were like, this is the option. So we really wanted to find something that would make her happy, confident, comfortable, and that we were okay, you know, paying for.

    And my dad had been a real estate investor for like 30 years to this point. And so he did quick math and he’s like, wait, wait, wait, wait, wait, we’re gonna be paying six grand a month for her to live in one of these or we could own it. You we can cashflow 10 grand and she can live for free. Let’s get involved. So it started as a family business with the need for my grandmother. And it’s really grown like crazy from there.

    Dylan Silver (03:50)
    like if we can to get a little bit granular talking about what the scope of residential assisted living really looks like. think for most people, ⁓ including myself honestly, there’s a fair degree of ignorance until maybe you have to put yourself or a family member in a position where you are now looking at.

    you know, how do we navigate this space? I’m thinking when I think of assisted living, think of communities, but I know that this, you know, is far beyond that scope. What is the residential assisted living space if you had to define it succinctly?

    Isabelle Guarino (04:28)
    You are right on the money, Dylan. People do not look at this, care about it, know about it, worry about it until it happens to them or their family member. And then we’re all stuck in this situation of saying, do I quit my job and go take care of my senior loved one 24 seven? Like I’m not cut out to be a caregiver. Like what do I do? Or do I pay for in-home caregivers to come live with them? Which the average rate in our country right now today is

    $35 an hour. So if your loved one needs 24 seven care, that’s like 25 grand a month for just the care, right? So many Americans can’t afford that. And then the third option is, well, let’s put them into a home.

    And as soon as you say it, you’re like, ⁓ I.

    I I wouldn’t, I said I’d never. You we all have this really negative connotation of the big box facility with long hallways and impersonal staff where your senior loved one is literally called by a room number. I mean, the only other place I know like that is prison. And that’s really what’s happening to these seniors. So residential assisted living is kind of like the Airbnbs to the hotel.

    It’s the Uber to the taxi. It’s the new wave of assisted living. So it’s a single family home in a regular residential neighborhood that houses anywhere from six to 16 seniors still getting that 24 seven care medication management three meals a day, but they’re getting significantly more love attention. You know everything that they need as a senior who’s aging who needs help with their activities of daily living.

    And it costs the same usually as that big facility, but the care ratios are four to one or five to one in a residential assisted living versus in a big facility, it may be 30 seniors to one caregiver. So vastly different level of care in the smaller homes and they actually are a home. They’re not home-like, right? They’re a home. So it becomes a lot more confident and comfortable option.

    Dylan Silver (07:20)
    Yeah. ⁓

    Isabelle Guarino (07:25)
    for the families, for the senior, and then for investors, if you’re in the single family space, it is hard to make things cashflow right now, right? Things that worked for the last five, 10, 15, 20 years just don’t work anymore. And so people are looking for ways to get creative and shared housing with residential assisted living is truly one of those ways that you can make property cashflow in this market or any market because it’s recession proof.

    Dylan Silver (07:53)
    Yeah, I mean, you mentioned a number of things that are unique to residential assisted living. know, one of the big ones is that it’s operating and correct me if I’m wrong here. It’s operating in many cases out of what looks like a home, right? It doesn’t look like in many cases this large community. It looks like a home, right?

    Isabelle Guarino (08:14)
    Yep. And most of the time what we teach and what we do is it is a home. It’s a residentially zoned single family property. It’s large, it’s luxury, but it is zoned residential and next door is mom, dad, two kids and a dog. So it is a home.

    Dylan Silver (08:29)
    Right.

    Now for investors who are getting into this space, mean, you have this need really everywhere in the country, aging population, you know, and so the residential assisted living segment, I mean, I think we’re going to start to see more people get into the space as demand increases, right? Now on the flip side of this as well, you have maybe some people who may be thinking, well, yeah, but I’m not a healthcare professional. How do I bridge the gap? So how are

    Isabelle Guarino (09:00)
    You see?

    Dylan Silver (09:02)
    investors who don’t come from a medical background getting started in residential assisted living.

    Isabelle Guarino (09:09)
    You know, you’re right on the money with saying, hey, this is a coming need. As an agent, you we were talking about that earlier. A lot of agents are starting to see this. Hey, seniors are selling their homes and going into assisted living. And right now in our country today, we are 1.3 million beds short. And in the next five years, the eldest of the baby boomers are gonna be coming into this market. So 76 million seniors in a 20 year span.

    are gonna be entering into assisted living and we do not have enough beds. Not only, not enough beds, but not even enough money to create the amount of beds that are needed. So what happens when the demand is crazy and the supply is low, costs skyrocket. They’ve already gone up 87 % over the last 20 years and they’re projected to continue to go crazy. So.

    mega, mega opportunity and you do not have to be a medical professional. That’s what I love about this. I’m not a nurse, a doctor, and you know, any, even a CNA, I’m not even a licensed caregiver, right? Because what we do and what we show people how to do is own the real estate, operate the business. So it’s really just a play on regular residential real estate leasing or investing. You’re buying a home, you’re renovating it for seniors, getting it licensed, hiring the staff.

    who’s gonna work in the home 24 seven, not you, right? But the staff, and then they’re running it on a day to day basis. You market to fill the home with seniors and you’ve got yourself a cash flowing business.

    Dylan Silver (11:15)
    I’d like if we can to give away some gold here for our audience. Maybe not the whole bar, but a couple gold nuggets. So we’ll get a little bit granular here. Let’s talk specifically about how folks are finding these ⁓ residential assisted living ⁓ opportunities. And what I mean by that is if I’m a senior person and I’m looking for a residential assisted living, would I be doing a Google search? Would I be looking on the MLS? Is there a community?

    Isabelle Guarino (11:19)
    Thank

    Yeah.

    Dylan Silver (11:45)
    on the flip side of this, once an investor has that ⁓ residential assisted living facility, how are they typically finding the tenants?

    Isabelle Guarino (11:56)
    So when it comes to marketing to fill the home, right? We just set all these crazy numbers, say 76 million people and we’re 1.3 million beds short. Okay, but how do they find me? Right? There’s really three branches to this. The first is an entire industry of people called placement agents. They’re basically realtors for assisted living. So when mom or dad falls and breaks their hip, most of the time they are going on Google and who’s coming up first is a placement agent.

    and they really work with the family to show them different properties with different price points, different amenities, different locations, whatever it is that they’re looking for. It costs the family nothing. It costs the care home owner the first month’s rent. So that’s a way to pay for speed and get people in your door. Now remember, first month’s rent might be like, my gosh, I have to pay them six grand? Well, yeah, the average stay in assisted living is three and a half years.

    So I’ll give away that first month all day long if I know someone’s gonna be coming in and probably staying for over three years. Now the second tool is Google. If you needed care, if I needed care, we’re probably gonna go search for assisted living in Houston, Texas or wherever you’re at and areas will pop up. So you want a great Facebook page, you want a great strong website using SEO and all the traditional things that any business, brick and mortar or online who uses

    know, marketing tools needs to have. The third way is local relationships. And that means partnering with elder law attorneys, geriatric doctors and nurses, hospice agencies, funeral homes, churches, synagogues, temples, all of these people are gonna be referral sources for you for free. So going out in your community and building those relationships saying, hey, when you have somebody who needs a bed, I’m a local, you know, referral for you. Okay, great.

    Dylan Silver (13:42)
    Yeah.

    Isabelle Guarino (13:50)
    and they help fill. all three of those legs of the stool working at the same time help keep your beds full.

    Dylan Silver (13:58)
    Now, you mentioned several, three marketing avenues. Do people ever struggle to fill rooms? Could someone get to a spot where they’ve done everything to get to that point, but they just don’t have the marketing channels ready and they could struggle potentially to get those beds filled?

    Isabelle Guarino (14:18)
    You know, our students, because we focus so heavily on marketing, I’m telling them, market the home before it even exists, right? They’re not having those trouble. They know exactly who to go to, what to say, how to build those relationships and keep that up. And marketing to fill your beds will become make or break as a real estate investor, because yes, you will have carrying costs set aside because you’re not going to be cash flowing day one.

    So you need to bake that in. maybe two residents the first month, then another two, then another two. Okay, well we might not be full for six, seven months. And so we need to have all that leverage in capital set aside to keep us going through those hard times. But marketing is something you should start upfront, A, number one, you don’t wait until those doors are open. If you do, that can be the kiss of death. And it’s really the difference between people who educate themselves

    Dylan Silver (15:05)
    Hmm.

    Isabelle Guarino (15:12)
    and work with a company like ours or like others out there and those who say, I’m gonna YouTube university and do this on my own. That’s who makes a lot of mistakes along the way.

    Dylan Silver (15:25)
    You mentioned earlier as well, there’s locators who, know, once someone gets into a position where they may be looking for an assisted living, that they will reach out typically to a locator or they may get referred to a locator. Is that locator a realtor? Are they a designated professional that works with an assisted living? How does a person become a locator?

    Isabelle Guarino (16:30)
    Yeah, a placement agent. So many times they are realtors who kind of add this on in their repertoire. Or a lot of times it’s a single mom. It’s a, you know, person who’s in the industry and they just create their own little business, have their SEO going. So when you search that in assisted living in Sarasota, they pop up to be the person you go to. So they’re actually fighting for SEO in comparison to the homes because they want you to come to them.

    to say, let me help you through this process. But it’s just someone who has created a business. There’s no kind of database of referral agents. It’s a mom and pop industry.

    Dylan Silver (17:06)
    Yeah.

    Placement, I mean, I’m thinking right now about I’m a realtor I mentioned, right? So all the realtors that I know that may be looking at, you know, where they can expand their business or if you’re starting out, I’m already thinking like, hey, if this is someone who needs, you know, assisted living, you are placing them in the assisted living, they’re gonna now have a vacant home potentially, at some point, they’re gonna need to do something with that home. That’s gonna be, what’s your thoughts on that? I mean, to me, that’s a huge opportunity for realtors.

    Isabelle Guarino (17:38)
    Yes, we have noticed over the last couple of years with all the changes in the real estate agent space with commissions being cut and you know, just so many terrible things happening to realtors. We’ve noticed an influx of real estate agents coming to our trainings with exactly your thoughts. And there’s many ways that they can not just double dip, but like triple quadruple dip.

    We actually created a course RAL Agents where we show real estate agents how to buy and sell RALs. So you don’t have to be in the luxury space. You’re not dealing with families. You’re dealing with serious business owners who have the capital and are ready to go and take action. And your commission literally doubles or if not triples overnight because you’re buying and selling the home and the business. So that’s one way you can get involved.

    Dylan Silver (18:02)
    Hmm.

    Yeah.

    Isabelle Guarino (18:28)
    Two is by becoming the placement agent, placing the seniors in. And now three, their home is up for grabs where potentially you can either buy it and do whatever you want with it, right? Wholesale it, fix and flip it, turn it into an RAL or just sell it, right? You could be the realtor who sells it to someone else, but it becomes this mega opportunity for realtors, but truly anyone and everyone listening, right?

    The silver tsunami of seniors is coming. You just have to figure out

    what your lane is, whether you want to be an owner operator, sell diapers or be a placement agent, figure out how you’re going to take your piece of the pie because it is coming whether you care or not. And this is one of those opportunities that really generations don’t see. we get, you know, I’m assuming you’re young like me and a lot of people are like, we’ve gotten handed the worst. We’ve actually.

    Dylan Silver (19:18)
    Yeah, that’s true.

    Isabelle Guarino (19:25)
    been handed one of the best opportunities of our lifetime. The Baby Boomers have been driving our economy for the last 70 plus years. And if you take advantage of the next 20, it could change the rest of your life.

    I mean, all you need is a really good 10, 20 years and you could be set forever.

    Dylan Silver (19:43)
    You you raise a really good point about, this applies, I would say, to other segments of real estate too, which is you could have a stable business, but let’s call it a modest business, but there could be one like seismic event that really propels you. In many cases, that could be, you know, one relationship that you made or one deal, right? And that opens up a lot of doors, but this is gonna open up, I think it already has, a lot of doors for a lot of people, whether it’s, you know, people selling businesses and, you you hear about

    These main street businesses right that that people who may be aging are either closing or looking to sell And then assisted living of course is going to be it is already ⁓ Really a huge need it’s going to become even larger of a need as as time goes on I would like to ask you one question for investors who are listening and looking at getting into this space is there a typical Hold time for a residential assisted living like if someone is coming from a multifamily background and they’re thinking

    I typically do a five year hold, maybe a seven year hold or three years if I’m able to hit the pro forma quickly. Is there a similar timeline in assisted living?

    Isabelle Guarino (20:53)
    of how long they want to hold it before they sell. Yeah. For the most part, honestly, most of our students who come through our training, they want to hold them forever because they’re shooting off such good cashflow and it’s an appreciating asset. And what they want, many times when people come to us, they say, hey, I have a senior loved one who needs care and assistance. So I’m going to put them in my home. When they pass,

    Dylan Silver (20:56)
    Right.

    Yeah.

    Isabelle Guarino (21:21)
    I’m still cash flowing. Then when I need care, I’m gonna move right into the master bedroom, leave my kids a blessing, not a burden. I’m gonna leave them cash flowing businesses that they spend five hours a week running. And it can become this thing that the family holds where it shoots off cash flow. If you did ever need to sell it, you’ve now gained a lot of appreciation and obviously you’re selling the business as well. So you’re making money there, but it becomes a solution for the family.

    So a lot of people get into it selfishly in that regard where they want that solution for their family. If they don’t and they want to treat it just as a real estate investment, I would say that, you know, 10 to 15 years would be a good hold time just to get that really that leverage on the appreciation of the home. ⁓ You can sell it whenever you want. There’s some people who technically fix and flip in this space and they sell after like a year or two, but they’re not making as much as they could if they held it longer playing that.

    Dylan Silver (22:14)
    Hmm.

    Isabelle Guarino (22:18)
    single-family appreciation game.

    Dylan Silver (22:21)
    Yeah, I mean, you mentioned the idea of being able to hold it long term, right? And then also too, right? You may yourself or someone else in your family may need this type of service. And if you could be the one to facilitate that for them and it’s your business, it’s really, you know, something that I think is doing good, not just for yourself and your family, but also for the community. Are there any difficulties that you’ve encountered or that you’ve heard people encountering with permitting? Like people might find

    with short-term rentals, for instance, or are most places, highly densely ⁓ populated areas, realizing that, we need to allow as really as many of these as we can.

    Isabelle Guarino (23:03)
    You know, these do exist in all 50 states and because of the Federal Fair Housing Act, we are very different than Airbnb who, you know, they can come in and change the rules overnight and screw the owner and operator of that business. We have federal laws that protect our kind of licensed class. And so that’s a really nice thing because that means an HOA, a city, a state, an angry neighbor cannot tell you no.

    and they cannot change the laws overnight because they would be competing against a federal law. So due to all of this, it doesn’t mean that they won’t try to say no. They sure as heck might try to say no, but they won’t win the battle. But a lot of, you know, investors in the past, they’d come into the situation where, the HOA won’t let me do this. And so they just quit and they just wouldn’t jump through that hoop.

    So we got together with all 30,000 licensed group home owners in the country and created the first and only RAL National Association that represents group home owners because there’s leverage, money and power for the big box owners, but nobody was representing the small guys. So we have lawyers and we have all sorts of different ⁓ opportunities for people who run into those issues so that they can reach out to the RAL National Association and get the support that they need to move forward.

    Dylan Silver (24:23)
    We are coming up on time here, Isabel. Any new projects that you’re working on, and then as well, what’s the best way for folks to get in contact with your team?

    Isabelle Guarino (24:31)
    Yeah, I actually just launched a new book called Assisted Living Revolution. I’ll send you the link so we can put it in the show notes. But it’s a really great book, my first fiction book. And it’s a story of three families going through assisted living and kind of the emotions and the decisions and the financial impact that it has on families. And kind of leads you down the best path, which is always gonna be RAL.

    ⁓ Assisted Living Revolution, really excited about that one. As you mentioned in the beginning, it was an Amazon bestselling book, but it just launched end of last year. So still very fresh and a lot of people are loving diving into that story. And to find out more info, yeah, ral101.com is a great place to connect. We’ve got all sorts of free resources for everybody there. So I’m grateful to have this opportunity and be on the show and share more about doing good and doing well.

    Dylan Silver (25:23)
    Isabelle, thank you so much for your time today. Thanks for coming on the show.

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