How to Make $10K–$40K a Month from ONE Home with Senior Living | Isabelle Guarino

Summary

Podcast Summary: The Science of Flipping Episode Title: How to Make $10K–$40K a Month from ONE Home with Senior Living | Isabelle Guarino
Host: Justin Colby, Bleav
Guest: Isabelle Guarino
Release Date: July 21, 2025

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Introduction

In this insightful episode of The Science of Flipping, host Justin Colby delves into the lucrative and often underexplored niche of senior living real estate investment with renowned expert Isabelle Guarino. Isabelle, known for her extensive work in Assisted Living Facilities (ALFs), shares her expertise on transforming single-family homes into profitable senior living spaces, offering listeners a blueprint to generate significant monthly income while making a positive societal impact.

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Understanding Assisted Living Facilities (ALFs)

Isabelle begins by demystifying the concept of ALFs, contrasting them with traditional, large-scale assisted living complexes. She emphasizes the personalized care and community feel that ALFs provide, which not only enhance the quality of life for seniors but also create a sustainable business model for investors.

Key Points:

• ALFs vs. Traditional Facilities: Unlike impersonal large facilities, ALFs operate within single-family homes, offering a 4:1 to 5:1 caregiver-to-resident ratio, enhancing care quality.
• Location Importance: Targeting affluent neighborhoods with a significant population of adults aged 50 and above ensures a steady demand from adult children financing their parents' care.

Notable Quote:

"It's a residential home that can house anywhere from 6 to 16 seniors in the home. It's still giving you that 24/7 care, but at a 4 to 1 or 5 to 1 ratio." [04:35]

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Financials of Running an ALF

Isabelle breaks down the financial model of ALFs, highlighting the potential for substantial monthly revenue while maintaining manageable operational costs.

Key Points:

• Revenue Per Resident: On average, each resident generates approximately $5,900 to $10,000 per month, primarily through private pay structures.
• Operational Costs: Includes mortgage, caregivers' salaries, food, utilities, activities, and liability insurance.
• Net Income: After covering all expenses, investors can net between $10K to $40K monthly per ALF, depending on the scale and efficiency of operations.

Notable Quote:

"Now you're getting six or ten residents, so that's like $60,000 coming in your mortgage these days." [10:12]

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Business Models and Scaling

Isabelle outlines various business models for investing in ALFs, catering to different investor profiles and capacities.

Key Models:

1. Direct Ownership: Purchasing and converting single-family homes into ALFs, requiring significant upfront investment but offering higher control and returns.
2. Leasing and Partnering: Leasing properties to operators who run the ALF, reducing the need for direct management.
3. Acquisition of Existing ALFs: Buying established care homes, which can provide immediate cash flow and reduce initial setup challenges.

Scaling Strategies:

• Systematization: Implementing robust systems allows investors to diversify their portfolio without getting bogged down in daily operations.
• Hiring Licensed Administrators: As the number of homes increases, hiring licensed administrators and caregivers ensures consistent quality and operational efficiency.
• Exit Strategies: Forming a substantial portfolio (e.g., 50+ doors) can attract hedge fund acquisitions, providing lucrative exit opportunities.

Notable Quote:

"If you're running both the real estate and the business sides, you sort of aim for an exit because it's a forever type of investment." [31:12]

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Finding and Managing Caregivers

A critical component of an ALF's success is the recruitment and management of reliable caregivers. Isabelle shares her strategies for sourcing and vetting caregivers to ensure high-quality care.

Key Points:

• Recruitment Channels: Utilize platforms like Indeed, Craigslist, Facebook, and partnerships with caregiver training schools.
• Verification Process: Implement thorough background checks, reference calls, and personality assessments (e.g., Predictive Index) to ensure caregivers are patient and dependable.
• Retention Strategies: Foster a supportive and respectful work environment to reduce turnover and maintain a stable caregiving team.

Notable Quote:

"We do a working interview so I can see them on the floor, see them with other staff. We call all references." [28:37]

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Regulatory Considerations and Legal Backing

Navigating the regulatory landscape is essential for operating ALFs. Isabelle discusses the importance of compliance and the protections provided under federal law.

Key Points:

• Federal Fair Housing Act: Seniors are classified as a protected class, preventing neighborhoods from denying ALFs based on discrimination.
• State Regulations: Varying limits on the number of residents per home and specific care requirements must be adhered to, depending on the state.
• Legal Support: Isabelle’s organization has established a national association representing ALF owners, providing legal backing and assistance in disputes.

Notable Quote:

"They can't stop you because a neighborhood can't fight a federal law." [42:57]

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Success Stories and Testimonials

Isabelle highlights numerous success stories from her students who have effectively implemented ALFs, demonstrating the scalability and profitability of this investment model.

Examples:

• High-Income ALFs: Students generating up to $40K per month by optimizing resident capacity and operational efficiency.
• Generational Business: Creating cash-flowing assets that can be passed down through generations, ensuring long-term financial security.
• Corporate Scaling: Building multiple levels of management (e.g., executive directors, administrators) to oversee a growing portfolio of ALFs.

Notable Quote:

"You may not want the biggest empire, but you can have financial freedom with just a couple of ALFs." [39:17]

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Conclusion

The episode concludes with Isabelle encouraging aspiring real estate investors to explore the senior living sector as a viable and profitable niche. She underscores the dual benefits of high financial returns and the fulfillment derived from enhancing the lives of seniors.

Closing Thoughts:

• Tailored Investment: There is no one-size-fits-all approach; investors should align their investment strategy with their personal goals and capacities.
• Long-Term Vision: Building a robust portfolio of ALFs can lead to substantial passive income and opportunities for lucrative exits.
• Impact Investing: Investing in ALFs is not merely about financial gain but also about making a meaningful difference in the community.

Notable Quote:

"This is impact investing because you're creating something that not only cash flows well but also does good." [45:55]

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Additional Resources:

• Isabelle Guarino's Website: Ralacademy.com
• Social Media: Follow Isabelle on Instagram at @RalAcademy for more insights and updates.

For those interested in learning more about transforming single-family homes into profitable senior living facilities, Isabelle Guarino's expertise offers a comprehensive guide to entering and excelling in this rewarding investment niche.

Transcript

[A]

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[B]

WhatsApp message privately what is up Science of Flipping Family? I'm very excited. For those of you that like cash flow, for those of you that like investments that can create wealth and a whole lot of money along the way, this is going to be your episode. I have with me Boss lady herself. She has taught thousands and thousands, maybe tens of thousands of of individuals about the senior living space. She herself owns a lot of senior living. She they're also known as ALFs. And if you are interested in trying to find a business model to grow wealth and grow massive amount of income and do Goodbye people. Isabel Gurino is here.

[A]

Yes, thanks for having me.

[B]

Let's do this.

[A]

Yes Excited to be here.

[B]

I'm very excited. I think it's under taught, under spoken about sector of our space. I've done however many thousands of deals in my life into this very moment as I'm sitting in front of you, I've not done an ALF or a senior living.

[A]

What are you waiting for?

[B]

What am I waiting for? Off camera. We were just talking about I Friday. I got text, hey, we have an available one here in Miami. Common in Miami.

[A]

Yeah.

[B]

You're in Phoenix.

[A]

Yeah.

[B]

Probably pretty common there.

[A]

I would say Florida and Arizona are the most popular places.

[B]

Okay.

[A]

Yeah.

[B]

And so I think people that are in real estate are silly and includes me.

[A]

Yeah.

[B]

I'm calling myself out that you don't look at this. I mean, the reality is, I have looked at it very surface level. The returns are insane, the income is insane, and it's real estate.

[A]

Yep.

[B]

The other sector of that is also a business.

[A]

Yes. And that's why I think people don't look at it, because they say, I'm not a medical professional. I don't know what I'm doing. I don't want to work in a home or be a caregiver. So they get turned away by the myths and misconceptions of what it is. It really is a business in real estate at the end of the day. But you can make the business very passive. It's not a passive business. You can make it passive. You can become a passive owner. And that's what we show real estate investors how to do.

[B]

Talk to me like a student. Tell me, like, exactly what you just said and let's elongate on that. Because the reality is I even me, right. After 20 years of doing this business, I would be like, man, I just said this to you. Oh, it's another business. I would be creating another business for myself, and I don't need another. Right.

[A]

Y.

[B]

And that's me trying to keep in my visionary self, like, corralled in, because I'll be like, yeah, let's go buy one. Let's go do that. Right. But talk to us about what it is and how you separate it and how. How should people be looking at this asset?

[A]

So when people think of assisted living, they think of that big stuffy box. Right?

[B]

Right.

[A]

Long hallways, impersonal staff, where you're literally called by your room number. And that is equivalent to prison, if you ask me. Right. Like, that's terrible. They're getting horrible care. It's 30 seniors to one caregiver ratio. And none of us want to go.

[B]

There at the end, we're talking about those big, almost apartment looking, massive 250 do.

[A]

Exactly. That's what we all think of when we think of assisted living. So this is like what Airbnbs did to hotels. This is a residential home that can house anywhere from 6 to 16 seniors in the home. It's still giving you that 24, 7 care, but at a 4 to 1 or 5 to 1 ratio. So significantly better care. Right. And it's in a home so you don't have to go to this institutional feel. You get to stay in maybe the same neighborhood you always grew up in, but. And it's the same cost, so you're getting better care, better food, better location and you're paying the same. So for the seniors and the families, it makes a ton of sense for the real estate investor who says, well, maybe I'm not ready for multifamily or ready for commercial yet. I wouldn't even go that direction anyways. I don't care that it makes more money. I don't feel good about myself at the end of the day.

[B]

Right.

[A]

If I was to own a big, big box. Right, right. In a smaller care home, the seniors are actually getting the quality care they paid for. So now your real estate investment, you're getting a check for six grand wrapped in a love letter.

[B]

Yeah.

[A]

Ten times a month. That feels real good. Like you're like, okay, I could do this.

[B]

Thank you for taking care of my mom or my grandma or whoever. My wife has. Her grandmother is in one right now.

[A]

Yeah.

[B]

And so I'm very knowledgeable. While you're talking, it's a normal single family home.

[A]

Yeah.

[B]

In a normal neighborhood.

[A]

Yes.

[B]

I think there's three bedrooms, there's six women.

[A]

Okay.

[B]

There's three nurses.

[A]

Okay.

[B]

And every time we go there, there's like, I mean, literally all three nurses are there on staff.

[A]

Yeah.

[B]

All the women are sitting and watching and playing cards and doing.

[A]

Yeah.

[B]

And I'm like, God, that's great. Because listen, at the end of the day, the end of people's lives can be tough.

[A]

It's very.

[B]

It's almost like the Benjamin Button story is like you turn into it like a child. Right.

[A]

Yeah. You're playing games, hanging out.

[B]

That's right.

[A]

Yes. And it's really tough.

[B]

So talk to us about, you know, the, the idea of separating church and state and what I say is like the real estate side from the business side.

[A]

Yes.

[B]

Because if you're going to run one, there is the business component. Hide from that.

[A]

No.

[B]

Talk to us about that.

[A]

Okay. So on the real estate side, a lot of people, what they're doing right now is buying real estate and turning it into an ALF or an ral as we call it. Residential assisted living.

[B]

Is that hard to turn it? Like if I just bought a home in Miami, is it hard to turn one into.

[A]

Not necessarily, but the like the keys are Right. This is what really what you're looking for is the demographics of the area. You want to be where the majority population is 50 years old and older, making two times the median income.

[B]

Okay.

[A]

That's not the senior, that's the adult child.

[B]

That's right.

[A]

Because they're the ones usually paying. It's almost seal. Right. They're the ones paying for mom or dad to go into the home.

[B]

Right.

[A]

So you want to target them because they don't want to drive 45 minutes away where it's cheaper. They want to drive five minutes on their way home.

[B]

Yeah.

[A]

So where the affluent 50 plus community is, that's where we want the home.

[B]

Okay.

[A]

And then the larger the footprint, the better. So I really prefer private bedrooms, private bathrooms and depending on where you are in the country, you're allowed to have between 6 and 16. So here in Florida, your state says 12, but most of your counties say 6 or 8.

[B]

We're talking about people.

[A]

People, residents in the home. Yes. In Arizona I'm limited to 10, Texas is 16, New York is 16. So it just depends where you are. So like my homes in Phoenix, they started as a 65 and now they're 10 10.

[B]

Okay.

[A]

So I renovated them to become that way, you know, didn't even have to do any addition because think like 300 to 500 square Fe a resident. So for 10 minimum, 3,000ft upwards of 5,000 is pretty comfortable.

[B]

Yeah.

[A]

And we're just taking a home and chopping it up differently so that it can serve these seniors needs. It doesn't.

[B]

So you almost make it a the new kiddos these days. The house pad split pad splits.

[A]

Similar but different in the sense that they're getting rid of living spaces, office, everything. We still keep all that like similar but we're like the luxury version of them.

[B]

So I'm only familiar with the one. My wife's grand bright which is just a normal like they didn't do anything. It's just three bedrooms. Two. Two women per bedroom in add bedrooms.

[A]

Yep. Which people do all the time.

[B]

You could do either.

[A]

You could do either. It's just for maximum profitability. They want private bedrooms.

[B]

Yeah, yeah. So let's Talk about numbers. Like, what can you get? I mean, compared to just a single family long term rental, the numbers are staggering.

[A]

Oh, it's crazy. So average cost in our country right now today is $5900 per month per resident. I don't know how much she's paying because she's in a shared room. So it might be more, might be less even.

[B]

Just think of that would be like just the month of, of a tenant.

[A]

Oh, yeah, that would be.

[B]

But now you have six or 10.

[A]

Yep. So in, in my case. Right. 5,900.

[B]

Now we're going to get me to go squirrel on this.

[A]

Let's call it 6000 just for easy math. Okay. So 6000. Because also remember, average includes our friends on government funding as well as our private pay friends, and we only focus on private pay.

[B]

Okay.

[A]

So for the most part, that 5,900 is kind of low for, for me and most of our students, they're getting 7, 8, 9, $10,000 per resident per.

[B]

Month because of the government funded.

[A]

No, we don't do any government funded. Government funding is about $1,800 a month.

[B]

Oh, so you go the other way.

[A]

Other way.

[B]

That's why you want to be in the mid-50s. So the kids that can afford them to have. Yeah.

[A]

Making two times the median income, they can afford it. Right. So let's call it 6,000amonth. 6,000 times 10 residents. 60,000 coming in your mortgage these days. To get a nice home like that, it's going to cost you ten grand. Right. Like easily. Okay. Because if you're getting a large home and you're renovating it and whatever the case is, it's going to cost you like 40,000amonth to run a 10 bed home. A very average 10 bed home.

[B]

And I'm saying that people, because all the business operational costs.

[A]

The operational, yeah. So your, your caregivers. Right. Insanely expensive. Okay. Food, activities, cable, utilities, Internet, just everything. Throw it all in their liability insurance, whatever. That one home still bringing you in $10,000 a month. So it's a, it's a really interesting way to take a home that maybe wasn't Airbnb before. And Airbnb is being kicked out of your city or they're making it impossible.

[B]

For the owners, or they're just too crowded. There's too many of them.

[A]

Or they're crowded.

[B]

Like you don't get a top dollar anymore.

[A]

Yeah. Or you just have a nicer, larger home in a good part of town and you're like, hey, I put One family in here and I make 500 bucks a month. I want to leverage this. I want to utilize this real estate for something that actually does good and does well. And now I can do senior housing with it. And so that's what we show people how to do.

[B]

That is amazing.

[A]

Yeah.

[B]

Right now I need people to go find you.

[A]

Yeah.

[B]

Where's the best place for people to go find you?

[A]

On social media? We're at Ral Academy pretty much everywhere. TikTok, Facebook, Instagram, you name it.

[B]

Academy.

[A]

Yeah. Residential assisted living. Yeah.

[B]

So again, let's talk to me because. Because I'm so interested, but almost like I don't know much.

[A]

Okay.

[B]

Because I think a lot of people are going to be like the same way I am right now.

[A]

Yep.

[B]

Can you just go by, I mean, in a general sense.

[A]

Yes.

[B]

If you're looking for a single family, long term rental.

[A]

Yeah.

[B]

To some extent you could just turn that into Aria or residential living.

[A]

Yeah. Residential assisted living.

[B]

Yeah, yeah, yeah, you could. It doesn't really matter. You don't have to overthink it. You don't have to be like, I need to be within this mile of so and so. Like there's no like complicated algorithm of location and distance of things or pricing or like, no. Do we need to.

[A]

So the demographics is just a number one. So we really want to be in that area. Because if it's in the wrong area, you're not going to get those rates.

[B]

You won't get the numbers. Right.

[A]

You won't get the numbers. If you're, if you're in too high of an area now, you're going to be getting really high numbers. But your real estate might cost more. Basically the cost of the real estate is going to kind of go the same with the cost of care.

[B]

Yeah.

[A]

So if you're saying, let me use a low end house in a crappy part of town. Well, you're going to get low end. You know, cost of care. That's what people can afford out there.

[B]

Right.

[A]

So you want them kind of to.

[B]

Be able to zone.

[A]

Well, it depends on our nation because obviously like 1.4 in San Jose is a piece of trash.

[B]

That's right. Right. I was going to say a million here in Miami is not anything.

[A]

Is not anything special.

[B]

That's just.

[A]

So here's, here's the thing. There's four ways to do this. Okay. One by land custom built from the ground up. A lot of our Midwest students do this. A lot of our Texas students do this. That's a great way. Especially if you can have more than 10 res, it's really hard to find a home that you could renovate to really have 16. 16, like that's you're doing. You're doing a massive rental anyways.

[B]

Yeah.

[A]

So custom building is amazing for that. Buying a single family home and converting, that's another option. What we've been talking about.

[B]

Yeah.

[A]

Third is buying an existing care home. So we're very lucky in both of our markets. You know, there's over 4,000 group homes here in the state of Florida. There's over 3,000 in Maricopa county alone.

[B]

Wow.

[A]

Yes. One zip code where my care home is is the most in the whole.

[B]

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[A]

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[B]

That's cool.

[A]

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[B]

I literally my team just brought to attention to single family homes in Maricopa. Yeah, like at 450 price range. Both of them have four. Four bedrooms.

[A]

Yeah.

[B]

Would that potentially be essentially. Could I look at that and say, I'm willing to pay retail on that because the numbers on.

[A]

We pay full price all the time.

[B]

Right. That's what I'm saying. I'm really thinking of my own real estate business. Right this second as I'm talking to you, there is potential to say, okay, I'll pay 450. Because based around what we're talking about here today. Yeah. The math works like this.

[A]

Yeah.

[B]

And you'll say, justin, if you look at it like this, that would be a good deal.

[A]

We're not like hunting for the best deal. We're actually just hunting for the best location.

[B]

Pool or no pool.

[A]

You know what it. If the pool's off the house, it can be a feature and amenity. But if it's like dangerously close, where they're just going to go in their wheelchair and plump. Nope. Not ideal. Yeah, not ideal. So our three homes in Phoenix, we filled one in, turned it into an outdoor grotto. Another one, we drained it, and it's an eyesore gate around it. It's ugly. But that's our lower income house. And so it just didn't make sense to upkeep it. And we couldn't fill it in. Cranes couldn't get back there. And then the third one, it's further off the house and we kept it in eye candy. It's been used once in 15 years. But daughter Judy, as we call the adult child. Right. She walks into the backyard and she goes, wow, there's a pool. Mom's gonna love this, you know, so.

[B]

And never used.

[A]

No.

[B]

All right. So we went through three land conversion. Conversion. One that's already built and used as an alf.

[A]

Yep. And then the last way to do it is you could be on either side of this leasing a home to use for this. So if you just want to be on the real estate side, you buy and renovate a home and then you lease it to someone who's going to operate this business in your home.

[B]

Interesting.

[A]

On the opposite side, you're saying, maybe I don't have that real estate experience. I don't have that capital. I want a lease from someone and I'm just going to operate the business in their home. They know what I'm doing and we're kind of in partnership together, but that's a way that you can just be on the real estate side. Or if you're like, I don't have any money, but I need to start cash flowing, you could just be on.

[B]

The business side, how hard is it to find the operators? Because I'm Now I'm like, okay, well, maybe I don't want to run the business. Maybe I just want to go do what I know. Buy the asset, find the asset. But then I would also need the operator. Is it a hard market to find operators?

[A]

It is harder. There's way more people who are comfortable on the real estate side than there are people who are comfortable on the operations side. And I'm going to say it's harder to find a good operator. And like anything, 80% of this industry is currently run mom and pop. So they live in the home, they work in the home. They do everything themselves. It's almost all immigrants from other countries who run this industry. I'm like the minority that. I'm like a white girl in this doing this. There is not a lot of people who look like me doing this.

[B]

Yeah.

[A]

So that's. That's unique.

[B]

Are you bilingual?

[A]

Poquito. Tiny. Tiny.

[B]

Me too. Yo tambien.

[A]

You see, my. My nanny speaks Spanish to my son, so I need to learn so he know I know what he knows.

[B]

Yeah, that's right. I Funny sidebar. But, yeah, same thing. Nanny speaks to my son. So he actually knows Spanish more in English right now because he's only 15 months.

[A]

Yeah.

[B]

My daughter, nothing. We just raised her talking English. I'm like, but she's only four. Yeah.

[A]

Okay. She's got time.

[B]

So, man, this is so interesting. And who are the type of people that should be looking at something like this? Like, should. Everyone should. Is it. You know, you got to kind of understand what you're looking to do. Is there a sector like your students? Who's your perfect student avatar? Because if you're here.

[A]

Yeah.

[B]

You need to find Isabelle immediately. But who is your perfect student avatar?

[A]

You know, it's interesting. We get a lot of people who. Someone in the partnership or relationship has real estate background and someone has medical background. Like you and your wife.

[B]

Yep.

[A]

And that, to me, I always. When. When they come to class, I'm always like, you guys are perfect.

[B]

Yeah.

[A]

Because one of you understands one side and the other understands the other. And it's the. You're not going to step on each other's toes.

[B]

Yeah.

[A]

Because you're involved in very different pieces to it.

[B]

That's right.

[A]

So I love that partnership. But we've had people as young as 17, as old as 72. We have people in all 50 states who are doing this. Zero real estate background. We've had kindergarten teachers truckers, NYPD. I mean, you name it, doing this. And now fully, you know, cash flowing and going crazy and they've got like one or two homes and they're like, I'm good. Like, I don't. I'm financially free now.

[B]

Even the economics you just gave me where essentially, after all costs, you have 60 grand gross between the mortgage, the people, the, the caretakers, the food, that and you net 10 grand a year.

[A]

Yeah, 10 grand a month, bro.

[B]

I mean, I'm sorry, A month?

[A]

Yeah.

[B]

You have three and you have 30 grand a month coming in.

[A]

Yes. And. And that's a very, like, that's not.

[B]

A big business business. That's like.

[A]

No.

[B]

Probably could sleep most the day.

[A]

Yes. And I really share that 10k example because it's very like average and normal.

[B]

Yeah.

[A]

But most of our students, like I said, are getting way more than that. Six.

[B]

Yeah.

[A]

So their numbers are crazy different. I have students making 20, 30 and 40 thousand dollars a month on one door.

[B]

Like, price point, like at 40 grand a month, what price point of real estate are we talking about?

[A]

40 grand a month. So they're paying about 20 in debt service in their mortgage. 20,000.

[B]

So there's somewhere in the mid, like between 1 to 2 million depending upon their loan.

[A]

Yeah, yeah. So most of these homes are like, in that. I would say less than 2, but right in that.

[B]

That's the right frame if you're one.

[A]

To two, pretty much.

[B]

So if you're just talking to me, which. That's what I'm saying, I need to go buy, find a home somewhere between one to two million dollars, give or take. Give or take with the right unit mix. Unless I wanted to go and remodel it.

[A]

Yeah, you're gonna have to remodel it.

[B]

A little bit anyways, just for accessibility and stuff of that nature.

[A]

Yeah. It doesn't need to be ADA compliant, but you want it as close to that as possible. So ramp scarred rails, handrails. But just no home is going to come a 10 10. So like you're gonna have to do a little bit of Renault anyways.

[B]

Okay. Describe what the house should look like after Renault. Like, it should be a certain look.

[A]

Or so you actually, you want it to feel as much just like a home as you can. Obviously the excess of bedrooms and bathrooms is a little bit like something weird's going on here. Right. But it's, it's so much more. It really should just feel like a home.

[B]

How many? Bed, bath, unit mix, like, so let's just say would a Four bedroom home be okay or would you want more? Like what would. If you were going to buy one today in Phoenix.

[A]

Yeah.

[B]

What would you be looking for?

[A]

Well, because my max is 10, I would look for something that is about 4,000 to 6,000 square feet is what I'd be looking for. Because the floor print and the location is really what I want because I'm going to rent it anyways.

[B]

Okay.

[A]

It doesn't matter if there's already seven bedrooms or three bedrooms. I'm good. I'm looking for the square footage, you know, so it's that. It's that rule of thumb with a square foot. And here's the thing, the state will tell you 100 square feet per resident. That's sick.

[B]

That they live in a coffin.

[A]

Exactly, exactly. That's terrible. So some of these homes you walk into and they're itty bitty bitty tiny. Tiny. So when daughter Judy again comes to their home and then comes to your home and you're abiding by our rule of thumb, which is that 300 to hundred, she's like, oh, this is nice. Like I could see her living here. It's like, yes, that's what I want to hear.

[B]

That's right.

[A]

Yep.

[B]

Okay, so in an ideal world for best profitability, is there a number of bedrooms that gives you kind of the ideal profitability?

[A]

Yeah, I would say six is the lowest I would go.

[B]

Bedrooms.

[A]

Yeah. Residence.

[B]

Residence.

[A]

Okay. Yeah, I wouldn't. I don't like anything less than six and most of your states allow six or more, so you really should. The only reason people do less than six is because they say I want to do this unlicensed. Which to me is like shame on you.

[B]

Because what, like a contractor doing it unlicensed?

[A]

Correct. It's like you just don't want to follow rules. And the rules are about the senior safety. So I'm. This is a real estate play. But I'm like very heavy on like the seniors need love and care and respect and safety. And if you're not going to do that, you should not be in this industry.

[B]

Shivers. Because the reality is you are taking care of someone's family member at the highest level at the end of the life where they probably need the most help in their life. And if you are going to shortcome or take a shortcut to doing that and serving people don't do this business.

[A]

Correct.

[B]

Just go get a long term rental. Who cares? Let them lease it. It doesn't matter.

[A]

Yep.

[B]

But don't do the business when you have someone else's family. It like literally in your hands.

[A]

Yes.

[B]

To take care of them.

[A]

Yes. 100. A lot of people hear this and they get excited. Oh, it's money. And. And oh, yay. I could cash flow really well. The reality is, you guys, you could cash flow well on a lot of types of real estate. Of course, there's a million other ways. This is not one you should get into. If it's all about the money. Right. It has to be that equal balance. And this is impact investing because you something big. When you asked who's the right person for this? Most of the people who come to our training, they have a loved one who's in assisted living who had a bad experience. And they're coming because they either want to get them out and put them in a better home, or they're like, I will never allow that to happen to anyone else in my life. And so they have like a.

[B]

They're doing it for the right reasons. Right. It's not just. Don't get me wrong, we're all in business, but it's not just about the money. To your point, you can go get storage facilities. That literally doesn't have a human involved.

[A]

Correct.

[B]

And you can make a God a load of money.

[A]

Oh, yeah. Oh, yeah.

[B]

So, okay, so 10 people.

[A]

Yep.

[B]

10 occupants.

[A]

Yep.

[B]

Do you ever. Do you always focus on one person, one bedroom, or will you do two in one bedroom?

[A]

So here's the thing. Shared is actually harder to fill. There's less people who don't want their.

[B]

Mom to share it with. Yeah.

[A]

So shared is harder to fill. We had a resident or a. We had a student who was licensed for 16, and they custom built a home out in Georgia, 13 bedroom, 13 bath. With the intent that some people will want to share and will have that option. They've only ever had 13 residents from like the last five years, from day opening to now.

[B]

Yeah.

[A]

And it's like. Yeah. Because people don't really love it when you're in a low income area. Everyone wants to share. Everyone needs to share because they can't afford that.

[B]

That's right.

[A]

But as the business owner, you're now bringing in less income, but you still have the same expenses. Your mortgage doesn't change those caregivers. You still have to pay them.

[B]

Yeah.

[A]

So now you're just making less money and you know, because you fact that.

[B]

You feel more people. Yeah. Okay, I understand. So one bedroom, one bath. They all need their own.

[A]

So bathrooms can be shared.

[B]

Okay.

[A]

You know, again, it's ideal if they have their own, just gives them the sense of privacy and it's mine. And you know, you have to think if you are a senior and you're moving from your whole own physical home to now a shared space.

[B]

Right.

[A]

And a shared bathroom and a shared bed, it's like, it's a lot, right? So being able to be like, okay, you have a semblance of independence and this is yours and no one can touch it, it really is helpful to them. So you can have shared bathrooms. The state will say you can have six people sharing one bathroom. Again, like, terrible. Don't do that. Right.

[B]

Is that only Arizona or is that just.

[A]

No, we teach nationally. So I, I review all the state's rules. Okay. Some states will say you can have four in a bedroom, two in a bed in a bedroom. Like, it just depends on bedrooms. It, it ranges. But bathrooms. Almost all states say six or eight can share a bathroom. And I'm like, that is terrible.

[B]

What's your website again? Ral academy.com if you want more info. Ralacademy.com and then Instagram.

[A]

Instagram, Ral Academy.

[B]

Let's go.

[A]

Nice.

[B]

So, all right. Now the uniqueness of this is inside the walls.

[A]

Yeah.

[B]

Right. Let's talk about the business a little bit.

[A]

Okay.

[B]

Right. Where do you find the caregivers? Yeah, is, is there like organizations that you can call and say, hey, I just opened up an alf. I need caregiver. How do we do that?

[A]

Buying a car in Carvana was so easy. I was able to finance it through them. I just. Whoa, wait, you mean finance? Yeah, finance. Got pre qualified for a Carvana auto loan, entered my terms and shot from thousands of great car options, all within my budget.

[B]

That's cool.

[A]

That financing through Carvana was so easy. Financed, done. And I get to pick up my car from their Carvana vending machine tomorrow. Financed. Right? That's what I said. You can spend time trying to pronounce financing, or you can actually finance and buy your car today. On car financing, subject to credit approval, additional terms and conditions may apply. So you're hiring them just like you would hire most any other job? Indeed. Craigslist, Facebook, Marketplace. Like you're just putting kind of the word out there. You can go to caregiver training schools and kind of get on the list for fresh graduates so they. You could be a preferred place that people go. But it's also a very tight knit industry and it's a lot of word of mouth. Most caregivers work at two or three locations of smaller homes. Or even bigger ones like a Brookdale or a Sunrise. So a lot of times when you open, you put the ad out there, you get a couple people coming in and then those people tell their friends and it just kind of like is very word of mouth, but indeed is great.

[B]

Yeah.

[A]

Yeah.

[B]

How do you verify, you know, are they good or bad? Like, because you hear those. Awful.

[A]

Awful.

[B]

Yeah. That are just gut wrenching. Gross.

[A]

Yes. How do you verify, you know, in any business, you should be slow to hire and quick to fire. Right. That's like rule of thumb as a business owner. But it's really true in assisted living because these are people's lives at stake, as we've said.

[B]

And some of them are literally like, they're. They've lost their mind. Right.

[A]

Dementia.

[B]

Dementia. And all the different things. Like.

[A]

Yeah.

[B]

It's just like, you need to make sure these people are on it.

[A]

Yeah.

[B]

It's not just someone that's a little bit older.

[A]

Yes.

[B]

They need help.

[A]

Yep. 100. You know, I think that there is a big, like, this is not a job where you. You're not going to call the references. You're gonna call the reference.

[B]

There's no doubt. Like, that's what I was like, dude, how many people do you call and sit down with? Because even I just think of, like, our families. And if you think about your mom, like, you are gonna go above and beyond to make sure.

[A]

Oh, yeah.

[B]

They are taken care of by the right person that actually cares.

[A]

Yep.

[B]

And I understand to some extent, like, if there's 10 people and three caregivers, like, it's not like they're getting. But they gotta care.

[A]

Oh, yeah, totally. So interview process is really serious. Have you ever done the predictive index?

[B]

I have.

[A]

Okay. So I actually make all of my staff do PI.

[B]

Yeah.

[A]

And I have, like, certain profiles that I'm looking for.

[B]

Yeah.

[A]

Especially the patient's meter. I'm looking for patients, like, off the chart. Because if you are not. I am like, way driving, like, not patient at all.

[B]

Yeah.

[A]

I'd be a terrible caregiver. Right. Because to. To react with these seniors, you have to be. Okay. That you ask a question and the response might come a minute and a half later.

[B]

Yeah.

[A]

Yeah. And you can't keep asking and asking like. No. You have to just sit with it. That is hard for me.

[B]

That's hard. It's hard for me with my daughter.

[A]

Yeah. Oh, yes. Just like kids. Right. So I know it's. It's a lot. So I think that we use PI. We do a Lot of other things. We do a working interview so I can see them on the floor, see them with other staff. We are call all references. We. I don't do background checks on my residents. I do them on my caregivers because I want to know what's going on. And also we will kind of like ask around because many of them have worked with each other in other homes. Like, this community is kind of small.

[B]

Yeah.

[A]

So everybody does kind of know each other. And if there's any, any, any, like, even the tiniest speck of gray, it's like, it's a no. I'm really strict about that. We've got cameras everywhere, in, inside and outside of the house. So I'm watching like everything, you know, and nothing. If, if again, if anything's in question. No, you're out.

[B]

Yeah. Yeah, man. It's just such an interesting model. So what's the, the, the burr model to me is very familiar. Yeah. Right. I go into a burr model, I say, okay, I want to buy the asset, I want to do the whole burr, renovate it, rent it, refinance, but probably have around a five year exit.

[A]

Yeah.

[B]

When you look at a business model like this.

[A]

Yeah.

[B]

You really go into it with an exit because.

[A]

Good question.

[B]

You're running a business, like, unless you buy the real estate to lease it to the business.

[A]

Yeah.

[B]

But if you're running both sides of it, do you really kind of go into it and exit? I feel like this would be like kind of a forever type of investment.

[A]

Kind of forever. So my dad started this industry with me. Right. Like we, like back when my grandmother fell and needed care, we got into it for her with the intent to move her in. She passed before we can move her in. But we kind of fell in love with the concept. So he stopped everything he was doing in real estate investing and went all in on this. And that was about 15 years ago. And I joined alongside him maybe 10 years ago when we started training people how to do it, because I was like, oh, I want to help with this. I helped a little in the care homes, but I was like, I'm not cut out to care for seniors. This isn't for me. So I'd help with other things like activities and decorating and whatever. But, you know, when we got started in this, it was his play that, hey, this is so that it's for my mom, it's for any of my siblings, it's for, you know, my mom's parents, if they needed it. And he's like. And it's for me and your mom if we ever need it. Now my dad passed in 20, 21 and so he never needed that. Right. But my mom might, you know, she's like doing red light therapy every day. She's going to live forever.

[B]

I love it. I love it. I think we all are. I mean the way keep the the world going with health.

[A]

Yes.

[B]

You do it right.

[A]

People are living longer and longer. So she her our plan is that whenever she does need that 20 years, 25 years. Okay, great. She can move right in, live for free. We're still cash flowing. And then one day I can pass it to my son and I can do the same thing. So it can be a generational business. That's how it ended up being for us when he passed. It's like I got left three cash flowing businesses. That's pretty cool.

[B]

Yeah.

[A]

So it can pass. We have other students who their plan is they're on home number 28 out in Colorado their homes to package a hundred up, sell it to the hedge funds.

[B]

So hedge funds buying it.

[A]

They will. If you have that volume.

[B]

No kidding. So now let's talk about that. That's really interesting. So there is an exit.

[A]

There's an exit.

[B]

So the reason why I don't love pad split isn't because I don't like the concept or the economic. Like I just believe is new enough that I can't see where's the exit. Yeah, like who, who buys a home that has like a sink in 12 bedrooms? Yeah, like who buys that besides someone else that would want a pad split.

[A]

Yep.

[B]

Which I believe potentially down the road. But also I want to know our hedge funds buying hepad splits and is too early of a concept now alfs and this is not assistant living's not. So let's dive into that. Who is like are they buying? How do they buy? What are they looking for?

[A]

Yes. So they would buy but it would probably be 50 doors or more.

[B]

Yeah.

[A]

The more you have, the better. Right. And having them all under a brand like that.

[B]

They want brand.

[A]

They want the brand.

[B]

Yeah.

[A]

So that's also important. So that's exactly what our students are doing. They're like, hey, we're going to like brand this and that. They're doing an incredible job.

[B]

28.

[A]

28.

[B]

And they want to get to 50 and see if the hedge funds will buy 50.

[A]

But really their goal is a hundred.

[B]

Yeah. Because why slow down? I mean.

[A]

Yeah, their goals 100.

[B]

So talk to talk about them.

[A]

Okay. They started and they came to our training in 2017. And he was, they were both flippers. And that's, that's all they did, was just flipping and they came and they totally jumped in on the concept, went through our mentorship and coaching. So we'd been working with them, opened their first home and then just scaled, scaled, scaled. And really what they focused on was systems. Because currently, if people hearing me say this who are in the industry might be like, there is no way you could do that. And it's because they've built themselves a job, right? They did not systemize it. They did not not set it out like, no, how do you want it? Year five, build it that way, day one. Even if you take a little bit less money, it is worth it. Like pay for speed, pay for someone else to do all these day to day jobs, whether that's VAs or whatever it is. We really help people build systems so that they can become hands off. So it is possible. I mean, they wouldn't be able to do 28 if they didn't have that. But the more you have, the more levels that you're getting now, it becomes even more systems in place. So in one care home, you're the owner in the owner's box, right? And then you have a licensed administrator, which is kind of like your PM in the real estate world. They're hiring your licensed caregivers. That's it, three levels, right? Owner, admin, caregivers.

[B]

Okay?

[A]

Now when you have more homes, let's say three homes, you might have someone on top of all of them being like the executive director who's overseeing all three. And you have each one with an administrator and then caregivers and so on. Now you've got 10 homes. You might have another level where it's like, okay, we have an activities director who's overseeing all of these and coordinating, you know, all of these systems for it. So it just becomes more and more levels similar to corporate, right? And that's how you can really help systemize it. And again, keep yourself out of the weeds is you're hiring someone else to do this job at a mass scale and so you can scale and grow like that every.

[B]

The podcast. Do you have a podcast?

[A]

I do.

[B]

It's the greatest thing in the world.

[A]

You learn so much.

[B]

I have such amazing guests like yourself. I sit here and go, every time, I just go, should I be doing something? I am like, oh, so, all right, I have so many questions.

[A]

So I will say this. If you just wanted to sell one, if you just had one and you wanted to sell it. Just so, you know, numbers wise. Yeah, it's. It. The transaction looks like this. It has to be a commercial broker. So it's. The real estate is the one sale. The real estate's worth whatever it's worth.

[B]

Right.

[A]

And then the business is two to five times the ebitda.

[B]

Okay.

[A]

So obviously, if I'm selling, I want it five times. If I'm buying, I want it two times. It's worth what someone's willing to pay. We usually see that three to four multiple. So you can sell these. And we help people buy and sell them. I mean, you, you know, got a deal that we were talking about earlier.

[B]

We help people, your students. In my event, I almost. I mean, because I don't even know who it was. I got attacked. Hey, I know you're in Miami. They know me. Yeah, they're in my phone or they're. I don't save them, but they're like, hey, I know you're in Miami.

[A]

Yeah.

[B]

Are you interested in.

[A]

Lf you never know. So. So we help people buy and sell them all the time. But I really think that the exit plan, if you're going to scale this correctly, could be that large. Buyout something like that to a hedge fund. Or if you're saying like, hey, I want three of these, I want to hold them until my mom or I need care, and then I want to package them and sell them. Somebody will still buy a three pack, a five pack, a 10 pack, but it'll probably be someone like me or my students who's like a smaller level person, not a big fund.

[B]

So someone like me who, like, all I would have to actually do is the two things that I'm best at. Find the real estate and raise the capital. I then go find someone to fill the seats of the caregivers and whatever, give up some more money on the front end to pay the people. The right people.

[A]

Yep.

[B]

So then I can go do more real estate and more capital.

[A]

Exactly. That's what I want to keep you in your box.

[B]

Right. And I just rinse and repeat street, find the capital, find the real estate, find the capital, find. And I overpay Suzanne, who has 15 years of doing this to go find the caregivers.

[A]

Yep.

[B]

And I'm happy to do that on the first couple because then I can get to five or 10.

[A]

Exactly. And then you can have a big salary.

[B]

And so I have a real business.

[A]

Yeah, I mean, it is a full blown business. You know, I was just in New Orleans just like two days ago. With one of our students, and he's just turned 30. He's got two care homes in Wisconsin, and one's cash flowing him 19,000amonth. The other one, 21,000amonth. And he was a travel nurse before he did this. Zero real estate background. He heard me on bigger pockets, and he was like, okay, I gotta do this, right? And I feel like. Like, I'm like, when are you getting your other one? He's like, why? I'm good.

[B]

Like, well, 50 grand a month for most people is.

[A]

Yeah.

[B]

He's like, at this point, you go.

[A]

He's like, I'm 30. Like, I'm happy, I'm fine. He's like, I'm actually gonna go move to New York City and just. Just salsa dance and have fun and, you know, mess around. I'm like, okay, cool. Good for you. So everyone comes in with different game plans. Other people think huge. Some people are like, let me just cash flow and so I can chill and live my life, you know? And other people, they want something that they can be involved in in a business they can be active in. And that's the cool thing about this industry is it can be whatever you want it to be. It could be a couple of assets that cash flow you. Well, that you don't have to really attend to very often. I would say I visit my homes once a quarter.

[B]

So out of your real work life.

[A]

Yeah.

[B]

How many hours a week or a month do you think you actually genuinely are focusing on those assets? Five hours a week or a month?

[A]

A week. Yeah. It's like a weekly meeting with my manager. So my. My pm, and then I like to do, like, look at payroll and stuff like that. And social media. Yeah. But almost everything else is dedicated to teaching other people how to do this.

[B]

The thing I think is so important for most people to hear from what we're talking about, there's no one size fits all. You don't need to build a business like mine or like yours at scale. You don't need to go one or two and stop. Like, there's no one size. You have to understand what you actually want from it.

[A]

Yes.

[B]

So what I always will tell people is figure out what you like. I have the five pillars of success. The first pillars decide what you want and who you need to be to get it. So in the example that you just gave with your student, he's like, I want some financial freedom. I don't need to be Donald Trump. Right. I don't need to have a whole empire. He goes and buys two, he makes 50 grand a month, literally. That is lifelong income. That will pay for probably anything he wants for the rest of his life.

[A]

Yep.

[B]

He may not be extreme about his spending, but 50 grand a month is 50 grand a month. But that may not work for someone like that. Me, I might go, like, okay, I need two week to buy. Like, I can't. Right. But there's no one size fits.

[A]

There's no one size fits all. And that's what I love, too, is when people come, we get to kind of be like, what's your vision? What do you want? And some people, it's genuinely. It's one home for my mom. That's all I care about. And it's like, great. Other people, it's financial freedom. It's a couple homes, so I don't have to work anymore. Other people, it's. I want to take over this industry, and I want the biggest cash out you've ever seen. And it's like, okay, cool. Like, you can do whatever you want.

[B]

Have we seen or we by you? Have you seen an actual exit with a hedge fund yet?

[A]

I have. I've seen someone in. Who? In Texas. They had 400 doors. I don't know what multiple in this space. Yeah.

[B]

Sheesh.

[A]

I don't know what multiple they got, but I know that they're sitting pretty.

[B]

Oh, yeah. I don't think they're working very hard right now. Now, your students who do have 28. Where. What state are they in?

[A]

Colorado.

[B]

Wow. Okay. Is that a.

[A]

It's actually kind of a tougher state. State for this. I would have thought red states are better than blue states when it cuts to real estate investing, and especially this, because it's business. It's small business.

[B]

Yeah.

[A]

So Colorado's not the most friendly to this. But I will say this. Some people who are watching are probably thinking, well, can't they deny this in a neighborhood? Can't they say, you can't do this? An hoa, a city, a state. An angry neighbor. Can't say no because we are a federally protected class. The seniors are considered disabled by the time they're moving in. And so under the federal Fair Housing act, we're protected. So no one can deny you. Now, that doesn't mean they won't try.

[B]

Right.

[A]

So in Colorado, they are all about trying to deny. Right. So almost every house they've gone after, it has been a battle, but we actually created the first and only national association that represents all 30,000 group homeowners across the country. So we have legal Backing and power there. So they've just partnered with them, got their lawyers involved, and basically won every single case.

[B]

So it does not matter what neighborhood you live in. I could go do this to my own personal home and move tomorrow back to Scottsdale. They can't stop me.

[A]

They can't stop you. They might fight you. Like I said, you might have a fight, but they can't stop you. Because a neighborhood can't fight a federal law.

[B]

Well, I. Because so you're obviously in Phoenix. And so I just moved here from Phoenix.

[A]

Yeah.

[B]

2021. So me and my wife are literally like, oh, you know, I have some. I'm leaving Phoenix tomorrow. I go to Phoenix all the time. Like, should we probably move back to Phoenix? Our home would rent for about nine grand a month. Just normal here in Miami. Yeah, in Miami. Just normal rent.

[A]

Yep.

[B]

And now I'm hearing your numbers and.

[A]

I'm like, do we turn this into it? 60 grand. And you know, what's the, what's the.

[B]

Well, 3,000 square feet, five bedroom.

[A]

Okay.

[B]

About a 2 million valuation.

[A]

Okay. And appraisal the neighborhood area. Affluent.

[B]

Super.

[A]

Okay, great. This is good. So yeah, you could probably do.

[B]

Even if it's licensed, probably change the. Because it's a U shape. I don't know.

[A]

What you don't want is long hallways because that's reminiscent of a big box. Right?

[B]

Yeah, sure.

[A]

You want it to feel like a home. Like, you know, I mean, it's very homey. Yeah.

[B]

Anyways, it just makes me think like, wow, okay, I could. I. You know, it's funny because if I even think about what I'm buying right now and raising capital for and the returns, and I'm like, God, this would make sense just for the long term exit. Even if I didn't have a big term exit to the hedge funds.

[A]

Yeah.

[B]

You have all this real estate for 15 years and it's running at such a high income.

[A]

That's, that's the beautiful thing is so many people are like, well, let me just hold this and make 200 bucks a month on something. And I'm just going to hold it. In one day I'll cash out bigger. One day I'll pass it to my kids. Why one day cash flow now and have the big cash out.

[B]

Do you like even. Do your students work typically and do this part time or do they typically more full time doing this?

[A]

It, it's, it ranges the gambit. But I mean we've had people who literally work on Wall street who've opened.

[B]

Their care homes well, that's the point is if you didn't like that guy or me, for example, I might not need the income in terms of the cash flow.

[A]

Right.

[B]

But could I just go pay down whatever debt I have on that home? And then when I do want to exit in 10 or 15 years, I have a free and clear $2 million asset. But I have 10 of them. Yep, that's $20 million in the next 10 years. I just. Because I just paid down the asset, I didn't have any loans on them. I exit them all.

[A]

Yep. That could be a beautiful way to.

[B]

Right. I mean, there's just different. That's what I'm saying. There's no one size fits all. You can kind of work this.

[A]

No, some people like get into it like that. They say, hey, I've got, I've got homes I want to pay off or this or that. And so they kind of want to use it to do that. Other people say, you know, we get a lot of people who actually come and they say, oh, I have a heart for seniors. I actually want to open a low income home for sen. But what I teach is pretty much private pay and more high end. So they're like, it doesn't really fit. And I'm like, no, it does fit. Open the high end home. Use this capital to go open a low end home. Serve those seniors. Don't let them not pay anything to live in the home. Like just, just accept whatever from the government. Okay, great. Now you can serve both. But there's a, there's a method to the madness. So I have to open the high end one first to make the money.

[B]

To go do that. Always it's good to be altruistic, but you got to be able to afford the bill. The altruism.

[A]

Yes.

[B]

Right?

[A]

Yes. So there's so many ways.

[B]

This is so fun. So guys, again, make sure you are finding Isabelle everywhere.

[A]

Yes.

[B]

Right now. By the way, don't wait. Find her all over Instagram. Your website, you guys need to learn if you're interested. I'm telling you, I'm sitting here. I'm basically using this in my own little coaching session right now. This is amazing.

[A]

Yeah, thanks.

[B]

So get with Isabelle. It's been a pleasure having you.

[A]

Thanks for having me.

[B]

Thank you for coming all the way out again. What is the website? Ralacademy.com ralacademy.com all over Instagram. Go to the website if you thought this was pretty interesting. And you know, some people that need to know Isabelle, not just yourself. Share with share this with two of your friends.