All Forum Posts by: Paula Willis

Thank you, Nathan Platter!  This is very helpful.  

Here are Gene Guarino's suggestions:

1. Borrower presents prospective lenders a business plan with excellent executive summary (the first two pages) and local statistics showing demand.

2. Borrower presents Terms.  If lender would like to be part of the business, offer 6% + profit share + Real Estate as collateral.

A fellow investor approached me about loaning him money for his RAL (Residential Assisted Living) startup.  My question:  Is this a good deal or a not-so-good deal?  Terms offered are below. Thanks to all for your input!

Loan Amount:  $45,000

Annual Interest Rate: 15%

Term: 5 year amortization schedule

1st year only one payout, interest prepayment for that year, paid at the time of initiation of the note ($6,750).

1st year investment $45,000-$6,750 = $38,250.

Monthly payments commence at the beginning of the second year, continuing from month 13 to month 600, in equal installments of $1,252, until the loan is paid off at the end of month 60.

No Collateral.

What do you think? Go or no go?  

What info do I need to answer?

I've gotten interested in Residential Assisted Living Facilities (RALs or RALFs). Gene Guarino has been doing a great job of selling the idea. So I'm in!

But I'm a newbie to real estate, and the more I learn the more intimidated I feel. I'll be starting a new business, licensing, buying property, rehabbing, staffing, marketing, etc. When I looked into opening RALs in North Carolina, where I live, I learned that all new RALs here for over 6 people require a CON, a Certificate Of Need. The CON application alone is a sweet nonrefundable $5,000 to $50,000. And our region's analyst, the one that reviews the CONs, told me "...no application would be accepted..."

She's harshing my buzz!

Rewind! I should follow Gene's example. He started by buying an existing facility. So I went online to find them. Thank goodness there is a directory of licensed RALs online on my state website. I'll be calling!

Surprise! I was checking out prices for a facility on SeniorAdvisor.com (had to give my name, email and phone number), and got a call _one_second_ after I hit enter. I kid you not! 

Now that's customer service!

Hi Ed!  Are you still interested in RALFs?  If so, here are some things  which may be useful to you:

The Ohio Assisted Living Association (I notice you hail from Cleveland, OH)

http://ohioassistedliving.org/

The Residential Assisted Living National Convention (October 25-28, 2018)

https://www.ralnationalconvention.com/

Good Luck! I'm working on something similar, and I'm also a newbie.  With not much info out there, it feels very much like a new frontier!

Paula