All Forum Posts by: Sendhil Krishnan

Quote from @Aaron Jones:

I'm following this post because like David, I have great interest in starting a 5-6 room non-medical independent living facility. I have targeted locations in WI and IL; and can hire licensed care givers in both states. In running the extremely basic financials, the revenue line for each of my selected cities look good, but I need a great source for help. 

 hi Aaron, just seeing your post now. Are you still intrigued by RALs? PM if you're still in this space

Quote from @Ed Neuhaus:

I have a few smaller homes looking for other operators.  I was talking to a few people who said the under 4 tenants are the majority of the market.  I have several homes that fit that model.  Honestly, I do not know the model well enough to know how 4 tenants make money, but apparently, it does. 

 I find this model very hard to make successful unless it is an owner occupied and they are the principal manager of the RAL. Having under 6 residents is very hard to make profitable as a business owner otherwise. In TX you can get licensed up to 16 which really helps with economies of scale and profitability. The house would have to be decent sized however to accommodate that many individuals. 

@Justin Brickman are you investors open to considering purchasing in Scottsdale? PM me

Hi BPers...I've previously shared my journey of starting my first RAL home and expanding to own or manage 13 RAL homes. Now, I'm looking to consolidate our top-performing luxury 7 RAL homes into one portfolio and seek a passive investor for the real estate, while our team (MDSL) continues to manage and operate these homes.

I would greatly appreciate advice on how to package this portfolio and connect with brokers or institutions in this sector. While I've reached out to several assisted living brokers, many seem to focus on larger, more institutional-sized ALFs, rather than portfolios of smaller residential assisted living homes like ours. Are there resources I should be connecting with in this space? Is Private equity buy out or REITs a feasible option..etc?d

Any recs would be greatly appreciated!
TIA!

Quote from @Gregg Camp:

The location isn't good for STR. I think it will be fine for Pad Split and am moving forward with them. Lenders don't know what the heck to do.

 hi Gregg did you go with Padsplit? Considering doing this on a new duplex but wondering about the wear and tear it has on a property. Have you had tenant issues such as nuisance calls or maintenance irks?

Quote from @David Edwards:

PadSplit host in Houston here and I have had a pretty good experience thus far. I would echo the statments made by others that things are more management intensive than a si gle family rental, but not 10x for intensive even though I make 10x the cashflow of a single family rental with the same financing. 

David thanks for the great info. I myself will be constructing some MFUs and was considering using either a duplex or the SFH for padsplit. However, concerned about the general wear and tear these tenants will have on a brand new construction. What has your experience been?

Quote from @Pietro Gaglio:

Residential assisted living facilities need to keep track of various data such as vitals, bowel movements, and amount of food eaten. Do they use pen and paper to record this information or do they have some sort of software to manage it?

 We use an emr known as synkwise to document patient and business related issues such as compliance issues and certifications for our caregivers. It can track meds, allergies, skin ulcers, business licensing, vitals. Great product but can be pricey monthly

@Pietro Gaglio

Use this database to help find average cost of care in your particular zip code.
https://www.genworth.com/aging-and-you/finances/cost-of-care...

If you're in Clinton Township it's roughly $4200, however keep in mind that this is just average. I would reach out directly to nicer homes or facilities in the specific areas, with specific amenities you plan to be in and offer. You may find that rates could be at least a $1000 higher than advertised or more. Keep us updated on what you discover!

@Doug Spence

I co-founded MD Senior Living and at one point were up to 13 RAL homes in Scottsdale. We are presently looking to divest from two RAL homes and lease back from the new owner so we can continue to run operations. The reason we are selling is to give a distribution for our investors and roll capital into some larger development projects we are considering. Reach out to me for more info but feel free to check out our site! 

Btw, many operators are "mom and pop" type operations who own a few homes and usually have held on to the real estate for well over a decade. Many do not look to expand as they are satisfied with the cash flow they generate. Hard to find operators who are truly interested in expanding, but that has been our specific case in markets like Phx and Scottsdale.

Congrats on getting into this space!

I would definitely try to maximize the number of bedrooms in the house as you will get your biggest bang for the buck. A private room will also command more than two people in a shared room (in most cases.) Are you not able to increase to 5 bedrooms if at all possible? You will recoup the initial cash investment (ROI per room created) with a full RAL home. Congrats on moving forward!

I have a SD-IRA and looking to deploy $180k into a real estate play. I plan to start withdrawing in next 20 years. i likely will not be getting financing as it would be a nonrecourse loan at roughly 9% and 30-40% down. I am more interested in high cash flow within this ira so I can reinvest any profits into some syndications. two scenarios as follows, but can't decide and would love your opinions:

1. I found a "turnkey" mobile home provider that owns the park, and will sell a brand new manufactured double wide home to me for $100k. They will find a tenant that wants to purchase and will create a note. Essentially, I would be buying the seller financing note and it will roughly cash flow $1500/mo (roughly 13%, 30 yr w 5K down). They will handle all management but tenant owner is responsible for most maintenance plus lot rent of $500. my main concern is depreciation of the asset; if the tenant owner does not execute and complete purchase i could be left w costly repairs to make it attractive to a new buyer tenant. I am also concerned with the length of term, 30 years for seller financing. Park is located near a military base and has been rated high (5 stars) on google if that's any consolation. 

2. Buy a traditional single-family house: I could buy a single-family house, with lower cash flow, but likely would have some built-in appreciation. 

3. Bonus scenario: bite the bullet and get a non-recourse loan with 30 to 40% down and buy 2? properties w the 180k. maybe cash flow is lower but ROI is better?

thanks in advance!