Senior Housing Development

[Justin Brooks]

Investment Info:

Other commercial investment investment.

Purchase price: $360,000
Cash invested: $690,000

Senior housing is the fastest growing opportunity in the national housing market of which the Residential Assisted Living niche provides the highest quality personal care for seniors and provides investors excellent returns. Homes house 8-16 residents, paying $6,500-$7,500 per month. PEW Institute research has shown that the average return on investment for the senior housing/assisted living asset-class, substantially outperforms all others within the real estate sector.

What made you interested in investing in this type of deal?

My goal initially was to get into apartment buildings. I did not look at apartment buildings because of the trend, but because of the things that Robert K. and his advisors taught. Long story short, I saw a much lower acquisition cost for an assisted living home, but the returns were similar to that of an apartment that was 10x the comparable cost. Not to mention being able to operate a business that helps others. My goal is to impact others through these and other types of investments.

How did you find this deal and how did you negotiate it?

Initially, the desire to create this came from my mom having a car accident and thinking, "man, what would have happened if she was not able to get around". The reality was, I didn't have an answer. I started searching for those answers that day and initially came up with an apartment building. The problem was that the acquisition cost for the part of the country I'd build in was astronomical. That's when I discovered senior housing and the rest is as they say history.

How did you finance this deal?

Syndicated funds and used SBA backed financing.

Lessons learned? Challenges?

This was a development project. A great rule of thumb is, developments will always cost more and take longer to develop.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I had a host of team members help take on this project. I worked with other syndicators, architects, engineers, contractors, lenders, insurance agents and many more team members. Development is about assembling a great team and executing on the plan. A great team is priceless.