A Surprising Way to Tap into the Senior Housing Market

Aviva (00:00)
This week's listener of the week is Wonder Real Estate. Wonder Real Estate, thank you so much for leaving us a five star review. And for those of you listening, if you leave us a five star review below, you might be next week's listener of the week, week, week. This week on Commercial Real Estate Secrets, we have Isabelle Guarino. Isabelle is the COO of Residential Assisted Living Academy.

Isabelle, thank you so much for being on the show today.

Isabelle Guarino (00:35)
Thank you so much for having me. I'm so excited to be here.

Aviva (00:38)
Isabelle, I normally ask this before we start recording, but where are you tuning in from?

Isabelle Guarino (00:45)
I am in Sedona, Arizona right now. Yeah.

Aviva (00:48)
Okay, nice. Very nice. It's 95 degrees here in Denver, so I'm sure. Okay. Well, I love Sedona, so thank you for being on the show today.

Isabelle Guarino (00:55)
It's about that up here too.

Aviva (01:04)
Isabelle. So tell for the listeners who you are and what you do in commercial real estate.

Isabelle Guarino (01:13)
I love it. So I do residential assisted living. We take single family homes and turn them into assisted living homes for seniors. So six to 16 seniors in a large luxury upscale home. I do that myself and I show other people how to do it as well.

Aviva (01:30)
How did you get into this business?

Isabelle Guarino (01:33)
My grandmother needed care herself. So we were looking for a place for her and we were disgusted with all of the facility type options. So we were looking for an alternative and my dad had always been in real estate and so it just made sense.

Aviva (01:46)
Holy smokes, that's really unique. I talk to a lot of people about a lot of different real estate and that is, you know, I know folks who own assisted living, but, and we'll get into that. Now I'm putting the pieces together that that is a big box facility and you do what sounds like boutique or concierge assisted living.

Isabelle Guarino (01:50)
Yeah, definitely.

Yeah.

Yes.

Yeah, residential style, exactly.

Aviva (02:17)
So what's your background and how long have you been doing this?

Isabelle Guarino (02:22)
We've been doing this for we've owned and operated homes for about 14 years now. We've been teaching and training on it for the last 10 years. And prior to this, I was actually a flight attendant. So I had, you know, watched my dad do real estate investing his whole life. And I was not interested until he got into this. And then I was like, what are you doing? And started learning with him. And I was his right hand gal for about eight years. He passed in 2021. And since then I've kind of just

taken it and we've grown 10x, so it's been amazing.

Aviva (02:54)
Holy smokes. As someone who learned everything from their father, I empathize that he's no longer with us, but I'm sure he's very proud of you and who better to learn from than the person who literally cares about you the most. So your dad got into it because his parent...

Isabelle Guarino (03:07)
Thank you.

Yes.

Aviva (03:20)
needed a facility and he just decided to do it himself.

Isabelle Guarino (03:25)
Yeah, like literally we were shopping for other facilities. Everything was expensive, had waiting lists, smelled bad, food was bad, care was bad. And we just started asking ourselves like, is there no other option? Is there nothing else? And then we stumbled into residential assisted living and he was like, wait, wait, wait, wait, wait, I'm going to pay five grand a month for her to live in one of these, or I can own the real estate, operate the business cashflow 10 grand a month and she can live for free.

It only made sense to get in. So with no one showing us what to do, we made so many mistakes along the way, but jumped right in, purchased an up and running residential assisted living home.

Aviva (04:04)
Okay, so you buy the real estate. Do you then hire an operator or are you the operators?

Isabelle Guarino (04:13)
So you hire a licensed administrator. It's kind of like a property manager in real estate world, right? And they're doing the hiring, firing, onboarding, training of your caregivers. They're helping market the home and tour it with new families and residents and onboard the new residents. And they're really running all the day to day with all the contractors in and out of the house. So they really do all of it. So although you do operate the business, it's more of overseeing that licensed administrator.

Aviva (04:41)
Wow. So when you're looking for a new acquisition, how do you find, you know, what to you, what's your acquisition criteria that screams, this is a house that will work for your use?

Isabelle Guarino (04:48)
Yeah.

Yeah, the number one thing I'm looking for is what is the demographics in the area? So you want to be where the 50 to 70 year olds who are upper middle class who make twice the median income where they live, eat, work, sleep, play, because that's the adult child who's putting their loved one in your care home. And they don't want to drive 45 minutes outside of town. They want to drive five minutes on their way home from work. So you want it near that.

And then in real estate terms, you're gonna want larger footprints. So think 300 to 500 square feet per resident with 10 residents, minimum of a 3000 square foot home upwards is more comfortable and as many private bedrooms and bathrooms as you can, or you'll renovate it to have more.

Aviva (05:45)
Do you, where do you operate? Okay.

Isabelle Guarino (05:47)
We are based in Phoenix, but we have students in all 50 states.

Aviva (05:52)
Okay, got it. So you obviously operate these properties yourself or own the properties, hire the operators, and then you teach this model across the country.

Isabelle Guarino (06:03)
Yep.

Yeah, exactly. We actually have a lot of students in Colorado. One of our most successful students, he has 26 RALs there in Colorado, in Denver area.

Aviva (06:15)
Okay, so what does RAL stand for for the listeners?

Isabelle Guarino (06:18)
residential assisted living.

Aviva (06:21)
Got it. And so tell me a bit about your teaching program.

Isabelle Guarino (06:27)
Yeah, so we have an online training course as well as a live three day fast track in Phoenix, where we're really showing people A to Z how to do this. We go through how to find the homes, fund the homes, fill the homes, what they need to do when they're touring new residents, how to market for new residents, what the day to day looks like, as well as getting that staffing secured as well. And then of course, funding because many people don't want to use their own capital to get started with real estate investment.

Aviva (06:57)
How do you fund these? I know like the lending environments interesting right now. I'm curious what that looks like for you all.

Isabelle Guarino (07:05)
because these homes turn such a great profit, like they outperform every single family investment opportunity, it's actually quite easy for us to get funding because SBA 7A will not only cover the house, the reno, carrying costs and business money, right? Like to keep you afloat for a minute. So SBA is fabulous for this. We also do a lot of syndication, private money and occasionally hard money, but.

SBA and syndication and private money is really the way to go.

Aviva (07:39)
Holy smokes, it's really smart.

Isabelle Guarino (07:42)
Yeah, it's a lot of fun too, because you're making good money, but you're helping people in a really important time of life. And people feel a lot of emotions during this time. So you get to help really serve a population that needs you.

Aviva (07:56)
I love our elders and I just empathize with them and I recognize, well, I won't dive into my emotional state right now. Tell me about the trends in senior living, how they've evolved since you started in the business to now.

Isabelle Guarino (08:21)
You know, I think that there are so many more people getting into this business because of the baby boomers coming into the market. You know, right now it's still the silent generation, but we're just starting to see the boomers come in. And so that's double the amount as far as generation, right? 47 million silent generation, 76 million baby boomers. And we are currently 1 .3 million assisted living beds short in our country today.

They're only building about 50 ,000 beds per year. So this is a massive crisis that our country is going to be facing. Families are going to be facing. So in 10 years ago, it was hard to find other people who are doing this. When we were asking for help and saying, what's everybody else doing? How do we do this or do that? There was no one there to help us. There was barely anybody in this. And now every day I meet new people who are jumping into this and adding it into their portfolio.

Aviva (09:18)
It's so forward thinking. My grandfather bought the first warehouse in our family in the 80s. And my dad caught on in the late 90s and bought, and this was way before e -commerce just completely changed the world in warehousing. And I just think at my, I think back at my dad and my grandfather and I'm like, holy smokes, you guys were.

Isabelle Guarino (09:27)
Hmm.

Yeah.

ahead of their time. Yeah.

Aviva (09:47)
100 % like how like, you know, warehousing is was never a glamorous asset until the last 5, 10 years. And it sounds like residential assisted living is like another frontier in commercial real estate that it's like, of course, like, people are living longer, the baby boomers. There's so many more of them. And

Isabelle Guarino (09:55)
Yes. Yes.

Yeah.

Aviva (10:16)
Supply and demand.

Isabelle Guarino (10:17)
Yes, you always want that on your side and you want to be looking ahead of the curve and getting in right now in something that you can build your brand, build your reputation. So when you know the time comes, you can package it up, sell out or you know, own the market because you have the longevity in the business. So that's probably a beautiful thing for you guys too, is you've been making money the whole way and it's only been increasing over time and that's incredible.

Aviva (10:48)
Hey, I didn't write the playbook or come up with the ideas. I'm just playing the game. So no, but it's cool and fun to learn from pros and people ahead of their time. Can you tell me what a construction project looks like in one of these properties when you buy it?

Isabelle Guarino (10:53)
Yeah.

Yeah.

Yeah.

Yeah. Yeah, there's there's really like four ways to get started. And one of them is a custom ground up build. So if you are in a state like a Texas and Illinois, Ohio, New Jersey, where you can have 16 residents in a home, it's going to be very hard to find a single family home that no matter how much renovation you do, can do that. So custom ground up builds are amazing for that. Depending on where you are in the country, it could run anywhere from a million to three million.

We have students all along the way. But again, the beautiful thing is it doesn't have to be your own capital. And when you know the home is going to be cash flowing with 16 residents, the cashflow should be around 20, 25 K a month net take home to you as the owner operator. And that's a beautiful thing.

Aviva (11:59)
Let me ask you, so say you buy property and maybe you develop it or maybe you renovate it. How do you get the first or second resident and how do you build trust? Right? There, you know, how do you break the ice?

Isabelle Guarino (12:08)
Mm -hmm.

It is that is such a good question. I've actually never been asked that on a podcast. So I love that you're thinking that because the first one is the hardest because it's so awkward. Nobody wants to be the first one to move into an apartment complex, let alone an assisted living. Right. So it is really difficult to get that first one. And truly the key is when you're doing that marketing.

Aviva (12:33)
Yeah.

Isabelle Guarino (12:40)
be marketing day one, like the moment you break ground, the moment you start the reno, start marketing so that day one, you're not just having one person move in, you're having three or four. So automatically they have people. If you wait and you're marketing later, then you will have that one person moving in alone and they're going to be really like uncomfortable for a minute. But also they're basically getting one -on -one care at a lower rate. So they're not mad on the care side. They're more like when our friends are coming.

When am I gonna be able to experience that side of this?

Aviva (13:14)
sure there's like a really beautiful community aspect to it like people become friends or maybe date.

Isabelle Guarino (13:19)
Yes.

They do definitely become friends and it is end of life care. The average stay in a home is three and a half years. So most of them are there until their end, right? Until they go to heaven or heaven, as I say. And that's okay. Like this isn't, most people aren't moving into assisted living for fun. That's not why you go in. It's because you're no longer safe living at home alone and there's no one.

that at home who can take care of you. So you need this assistance, you need this care. And so it really is something once you're there, you do want to be able to make friends with other people who are like you, who need that help. But you know, you're still a human at the end of the day, you still have social and emotional and spiritual needs, not just physical needs.

Aviva (14:10)
So aside from the in -room care, what other services do you all provide on site?

Isabelle Guarino (14:17)
Yeah, we do everything that you would get in a big box. So we have activities, calendars, we've got senior yoga, pet therapy, we've got pools in the backyard or whatever the case is, depending on the home, of course, not that they're always using it, but sometimes they do gardens and and we have music classes and really whatever they want. So lots of activities going on within the home. They get medication management as three meals a day. But if they want more, we don't care, right? It's their home, they can do whatever they want.

And then of course the 24 -7 care. So they're getting their laundry done. They're being physically helped usually with toileting, showering, eating, you know, brushing their hair, brushing their teeth, all those different things are what seniors need help with by the time they move in.

Aviva (15:03)
Is it generally a more affordable option than a big box or is it just a different avenue?

Isabelle Guarino (15:10)
It's quite similar, but the biggest difference is this. When you move a loved one into a big box, it's kind of like those big signs you drive by where they say homes that start in the 300s, right? And then when you actually get the home, it was 750K and you're like, what? It said a home start in the 300s, right? Yeah, they start there. That's what they do at the Brookdale's, at the Sunrise, at the Atrium. They say, it's 4K a month. And so you're like,

Aviva (15:30)
I'm sorry.

Isabelle Guarino (15:38)
wonderful that fits in our budget, we'll sign up." And then they're like, but mom wanted to eat three times a day, not two times. So that's an extra thousand dollars a week. she ran out of diapers. So our diapers are 50 bucks a diaper and she used 30 of them. And then boom, boom, boom, boom, boom. Now you get your bill at the end of the month and it's eight grand and you're like, what happened? And they're like, well, all these things are add ons. So they really

lot of times trick people coming in the door and then they get those first bills and 80 % of our residents come from big boxes. That's how bad the experience is that people are searching for other options and you've probably driven by a thousand RALs and never knew what they were because there's no big sign. It's just a residential home and so we really have a hard time.

getting that marketing out there to say, hey, come over here, you know, we're the better option. We're the Airbnb to the hotel.

Aviva (16:38)
Wow, that's cool. I love it. So how can a real estate investor, we know we have a lot of investors who listen to this podcast. How can they take advantage of the opportunity of more, you know, the senior housing shortage and just longer lifespans in general?

Isabelle Guarino (16:40)
Yeah.

Yeah, I think in, in any, anyone who I talked to about this, I say, find out what speaks to you. If it is being an owner and operator of an RAL, amazing, go that direction and we're happy to help guide you. But if that's not your cup of tea, find something that will aid the baby boomers over these next 20 years, because they've been driving our economy for the last 70 plus years and they're going to continue to drive it until they're not here. So when people say follow the money, we should change that.

follow the boomers because they hold the wealth, they hold the real estate. So maybe it's you're buying up the homes that they're selling when they move into assisted living. Maybe you're getting into the diaper industry, the medical bed industry, the staffing industry, whatever the case is, do something that follows the money.

Aviva (17:53)
I love that. I think it's so fascinating. I learned recently that and you kind of touched on this senior housing, they like to build it on major roads because seniors generally can't, they don't, they don't hear as well. So the sound doesn't bother them. And then they want to be in a convenient direction for their family and location so that it's easy to visit them. It's

Isabelle Guarino (18:03)
Mm -hmm.

Yep. Yep.

Absolutely. Location is everything. It's real estate at the end of the day.

Aviva (18:24)
Hey, very cool. I'm enamored by this. So I love what you're doing. What makes you happy with your day to day in commercial real estate?

Isabelle Guarino (18:30)
Awesome.

You know, I would say on me owning these, I would say the impact that we have on the caregivers, the seniors, the families, like being able to do good and do well. Cashflow is amazing, but you can make that doing so many different things, but not a lot of ways make you feel good at the end of the day. And this is one that I have that equal balance. On the education side and showing people how to do this, it is the most rewarding thing to any mentor.

when you take action and you go do it. And when I get a student who texts me, calls me, sends me a DM and they're like, we're having an open house, can you come visit? I just wanna cry. And then when they call me six months later and they're like, I'm financially free, I'm reaching these goals, I'm doing this, I'm doing that. It's like the most rewarding thing is taking action. So I love both of those, like the cashflow and feeling good about it and then helping people get to that phase of life, cause it's so important.

Aviva (19:37)
I say it till I go blue in the face, the more you give, the more you get. And real estate's cool because it gives you the opportunity to make an amazing life for yourself and your family while you do that. So, yeah. So Isabelle, where can the listeners find you, follow you and learn about Residential Assisted Living Academy?

Isabelle Guarino (19:50)
Amen.

We're on all social media @ RAL Academy. And if you want to schedule a call with me or the team, grab a free book, grab a webinar, whatever you want, go to ral101 .com.

Aviva (20:13)
Thank you so much for being on commercial real estate secrets and for everybody listening. We'll see you next week.