His company RAL Academy takes single-family homes and converts them into assisted living homes. They also focus on teaching others how to accomplish this business. They recommend hiring out the caregiving aspects of the business.
There are seventy-seven million baby boomers. That means there are 10,000 people every day turning 65 years old and 4000 people every day turning 85. This translates into hundreds of thousands of people needing assisted living every month and that demand is only growing. Some elderly may elect to move into a nicer home on their own while others may have to as their family can no longer care for them.
They look for a one-story home in a good location. Having no stairs is a big plus and a larger home works better. He recommends 300 square feet of living space per resident. They usually focus on having one or two people per room. One can occasionally convert other interior space into bedrooms. You want a building in nicer neighborhood usually one that is upper middle income. A good neighborhood gives families easy access to visit their family as they are probably nearby.
Most people don’t have a long-term care insurance policy but if they do they it can work very well. However, the government will generally kick in support if there are no remaining assets.
Requirements for such a property is that the building is safe. Various aspects of the home may need upgrades. There are some challenges and inspections in the business, but that creates a barrier to entry. If there weren’t a barrier, there would be more people doing it so take advantage of this. The most significant difficulty in this business is the people, the caregivers and that is why you need an excellent management team.
There are often some requirements and qualifications that are required for managers. Some states require you to be a caregiver first. For this reason, they prefer to hire an already qualified manager to look after their properties. If you can develop the right team to help manage and look after these properties you can do quite well. One management team can look after three of these homes if they are near each other.
Financing a property can be done initially as a Fannie/Freddie loan, but later on, when the business is developed, you may need to refinance. He outlines several different financing strategies.
Gene points out that “You’re going to get involved in this one way or another. So having said this, you should get involved in just one which will help reduce the burden on your family when you get older.”
You can find out more at ralacademy.com, or you can call them at 480-704-3065. They also have seven lessons at ral101.com which are available for free.
Talking Points From This Week’s Episode
• Demographics reveal that assisted living is a growth industry.
• Small-scale care homes is an underappreciated opportunity.
• Finding and leasing a suitable home to a Care Business is one strategy.
About Our Guest
Gene is the President, CEO & Founder of RALAcademy. Gene has over 30 years experience in real estate investing and business. Today, Gene is just focused on just one thing, investing in the mega-trend of senior assisted housing. Having trained tens of thousands of investors and entrepreneurs over the past 25 years, he now specializes in helping others take advantage of this mega-trend opportunity.
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