Residential Assisted Living - Anyone with this experience?

Question

Hi everyone. I'm new to BP and to the idea of real estate investing in general. I have wanted to open a residential assisted living for some time and know the business/operations side of it well. What is new to me is the real estate side of this business. Which has led me to BP.

Anyone on here with experience in both and can compare the two as far as long term potential? I understand they are different, but it seems the concept is similar to college housing or multifamily investing. Buy a house, renovate to state standards, and rent out by the room. I am curious on thoughts from anyone who started out in REI and went on to owning a Residential Assisted Living.

Any thoughts, feedback would be greatly appreciated!

Erika Herrera · Answer

@Sendhil Krishnan Thank you for your reply - the posts have been very informative. Look forward to connecting!

@Gene Guarino Thank you! As an RN and hospice nurse, I have seen many residents in these homes and this has been a passion of mine for years. It's time to act on it. I appreciate your input and may be seeing you soon!

Don Spafford · Answer

@Erika Herrera I am not in the RAL space but have done a lot of research on it. It is NOT the same as college or MF housing. There are state regulations involved and insurance since you are taking care of people. They are not just people renting a room in a house. Unless you are talking Senior housing, RAL is basically a small assisted living center so you have to have licensing and provide dietary needs, etc. There is a lot of training available for it through a RAL "guru" type guy, but his info is really good. Check out RALacademy.com for more info on that. It is pricey but if you want to get into that space you need to be prepared. You can get licensed and be the administrator yourself, but then you are just getting yourself into a job. Otherwise you need to also hire a caretaker.

Don Spafford · Answer

@Erika Herrera Thanks for clarifying. Yes, the RAL is more lucrative and if you get it set up right it can be very hands off. I still personally want to get into the space. Although this past summer I partnered with some people including a neighbor of mine who is an AL admin, to offer $3.5M on an actual skilled nursing/AL center, we didn't win the bid though. But that was a very different business than a small RAL. I think that RAL course I mentioned is worth it if you want to go that route. As for comparing that with normal MF, the MF would be much less paperwork. Less complicated taxes and less government oversight. Probably even more hands off and less chances of lawsuits. And easier to set up, probably less down payment, etc. You can't really go wrong either way if it is done right. You could always start in the MF first to get your cash flows coming in and then further down the road to the AL. That's more my plan now. I had a personal reason to get into the AL but that reason is no longer valid since the person I would have used it for passed away.

There have been some of the older podcasts that have discussed it as well. You can go back and listen to ALL of the podcasts, I highly recommend that anyway I did that when I got active on BP and it helped tremendously, or try to search for the ones that talk about AL.

Raphaela Sapire · Answer

Hi Erika, if you understand the operations its not worth the investment. Gene very vaguely goes into finance and then spends time upselling you to come spend another 3k on the three-day course.

Gene Guarino · Answer

Hello Erika,

You have an advantage over most in that you have some experience as an administrator.  T

hats not a requirement but certainly that is helpful.

I have 40 years of real estate and business experience but I am not an administrator or a caregiver.

Our training is not about being an administrator or a care giver it is about the business and the real estate opportunity and how you put it all together.

I hope that helps.

Gene

Sendhil Krishnan · Answer

@Erika Herrera

Ive previously posted about my experience taking the RAL course and also starting my own care homes. Take a look at my posts if you want more info. Thanks￼

Erika Herrera · Answer

@Don Spafford Did you attend the course with RAL Academy? I go back and forth with it because I am an Administrator and really understand the business. Just not the real estate portion as well, yet. But I’m sure it’s worth attending.

I was thinking that as well. Possibly starting in MF and then into AL. Thanks so much for your input!

Erika Herrera · Answer

Thank you @Don Spafford! I misspoke and meant as far as the real estate, concept seemed similar. I am familiar with state regs, being an Administrator, and the operations and business overall. I am an RN and already work in this industry. Also have done extensive research.

I'm interested in anyone's input who has done both? I'm leaning towards REI due to the overall responsibility of caring for people, liability, and time investment...but having an AL could be more lucrative. Curious on people's thoughts. Thanks again!

Residential Assisted Living - Anyone with this experience?

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