All Forum Posts by: Charlie Cameron

 Morning! Looking for residential homes that can suit max capacity for that locality. (10-14 in most places). 

@Neal Patel (your name is very similar to the SEO guy I follow... I'm sure you get that a lot!). We are interested in smaller residential ALFs if you come across any. We are marketing and buying on and off market.

Hey @Dan V.! We've done a few of these and are actively working on more. If you are essentially doubling the square footage, I'd increase your reno price. Consider the following:

- To maximize rent, you need to maximize what the operator can make, which means making the home as nice as possible for private pay residents and maximizing to the licensable number of residents

- You don't necessarily have to have individual bedrooms, some can be shared, but check on the square footage requirement for bedrooms

- No, $1 in for this type of reno will not equal $1 out. That's the big gotcha on renovating into one of these. Don't expect a full cash out BRRRR. That's why we look for properties that as as close to what we need as possible: we might just need to make things more accessible, add sprinklers, and add a few bedrooms.

- For a nice home where all the residents would be private pay, we are leasing commercially to an operator for 3-5 years for $700-1000 per resident. But the SFR rents are higher than norfolk in most cases, so it may not be quite equivalent. You can rent for even more if the home is more specialized (i.e. memory care, etc.).

Hope that helps! We are looking to expand into Virginia as well. 

@Ian Martin It's going to depend heavily on what the home can be licensed for, the finish of the home, and how many residents it can be licensed for. But it ends up being around 3X the long term rent. 
Having been heavily in short term rentals for a while, I've found this to be about as much work up front, but we don't have to furnish, we don't have the management nightmares that STRs bring, we make as much or more cash flow, and we handle less maintenance than a traditional SFR. We're signing 3-5 year escalating commercial leases, which is awesome.

Generally, what we've been estimating is that if this is a pretty nice residential assisted living home, that we will get $800-1100 PER resident. 

The hard parts are ensuring you can have a home that can be licensed for as many residents as possible (comfortably) and finding a well qualified operator to lease it to. Licensing requirements vary heavily by locality and usually the home will need to have a sprinkler system, bedroom size requirements, there may need to be min distance to any other licensed homes, etc.

Hey @Lexi Blevins! You're going to want to start by checking with local zoning and planning to determine is the home can become residential assisted living. Sometimes it has to be zoned properly or it might need to be a specific distance from an already licensed home.

Then you need to determine the licensing requirements and see if you can meet those. Often times there are bedroom size requirements, residential sprinkler system requirements, among others.

You'll want to then check the state regulation agency and review their requirements and licensing process. 

If you plan to operate the entire business, that will be work. But if there are enough bedrooms or you get multiple homes, you will be able to support hiring a local manager to manage daily operations. 

You can also do what I do and lease the home TO an operator. Make the home licensable and tailored to residential assisted living, and then lease it at a higher than market rate to an operator who will run their own business out of your home. Finding the right operator is the key here but once you do it's passive for 3-5 years as a commercially leased home. They even handle most maintenance and all utilities. Pretty sweet arrangement! 

That's the tool ^^^ Sendhil is a real expert in this space!

@Jose Reyes Colleen is right, first step is to call the city zoning planning department and discuss with them. They’ll be able to point you to whether it could be converted or not. Definitely be sure to get it in writing if so.

@Doug Spence We had this same question. Since we didn’t find it when we searched for it, we decided to build it, starting with our residential assisted living Facebook community. We are building a back end database we hope to make public with a directly in the near future! 

@Pietro Gaglio There’s a great lookup tool based on actual and projected data. I asked my biz partner what he uses and will get back to you. But you’re right, that’s about the average but depending on how nice the home is, whether each resident gets a private room, and the level of care/specialization, will all factor in! 

Keep in mind you’ll need a pile of cash (mostly to cover labor as your fill your home) to start the business or get a loan to start the business. And then there’s the real estate which you could purchase or lease to save in cash. 

Hey @Nathaniel Epps! I have a few RAL homes so I'll share my limited perspective. 

Will you be operating the home as well? 

The goal to maximize a RAL property is to create enough space for the allowable maximum residents. Will the bedrooms be large enough to accommodate two residents comfortably (and by regulation/licensing requirements)? 

With these homes, there need to be enough residents to be able to have a full time staff. So generally you'd want to see at least 6 residents, but optimally 10. 

This home does sound too small for 10. You can convert garage and other non-living spaces into living spaces since you likely won't need the parking.

To get to 6 residents, it sounds like you will have to double up two bedrooms and then keep the other two as singles. But keep in mind regulations may require you to have additional baths and sometimes even a private room for staff. 

As far as what's "typical", it really depends on the area and how premium you are making the home. If it is decked out as a super nice place, you might see more single rooms that can demand a premium - some of these homes can be monstrous in size. But if the area or the home doesn't command that, then you might see smaller homes. 

I don't know much about an SBA refi, but you could get an SBA loan once the BUSINESS is operating and assuming YOU are running the business side as well. Better terms and less money down makes SBA an awesome option in that case.