Decisions, decisions.
You could own a few rental houses and make a few hundred bucks in cash flow per month.
Or … you could own a ten-bed residential assisted living facility and make closer to $10,000 in passive cash flow per month.
Plus, you get to provide an attractive and affordable alternative service for a growing demographic that desperately needs one.
Sound like a heavy lift? Isabelle Guarino Smith, COO of Residential Assisted Living Academy (RAL), can teach you from experience exactly how to do it. It’s her family business.
“Money’s cool, but making an impact is way cooler,” Guarino Smith said to Ricci Truong on the CamaPlan Podcast. “I’ve had such a blessed opportunity to have those three cash-flowing businesses passed down to me where I’m making a massive impact on our community by providing really awesome jobs, helping families.”
One House, One Grandma
Guarino Smith’s father, the late Gene Guarino, didn’t get into the residential assisted living business to make a buck. He got into it because he didn’t want to put his ailing mother into a “home.” And in crafting his own solution with entrepreneurial zeal, he laid the keystone of a lucrative family business, which his daughter now teaches aspiring real estate entrepreneurs to emulate.
At the time, keeping Guarino Smith’s grandmother out of a “home” meant one-on-one, 24/7 residential care, a proposition that came with a $19,000-month price tag. That’s a heavy burden for any family to bear.
But the most obvious way to cut back that cost was to board grandma in a depressing 100-unit filing cabinet for seniors that Guarino Smith distastefully refers to as “Big Box” assisted living, facilities with dangerously thin resident-to-caregiver ratios of 15-to-1, 25-to-1 … even 50-to-1.
“That’s where you hear the horror stories is that my mom called her call button at 10 PM. And someone didn’t come until 2 AM,” Guarino Smith said. “It’s not that caregiver’s fault. It’s the fault of the system being set up to say ‘That’s okay. That’s allowed, it is what it is.’”
Worse — these big-box facilities often broke budgets with “gotcha” add-on fees. $500 for an alternate bath day, $500 to take breakfast a little later than usual … until a $5,000 bill balloons to $9,000 with no warning.
Untapped Demand
There was an alternative — residential assisted living, a breed of “group home” where residents lived in a large, retrofitted house in a residential neighborhood, a far more “homey” and comfortable environment with a much safer resident-to-caregiver ratio. But waiting lists for this attractive option were understandable long.
Sensing an unfulfilled need in the marketplace, Gene Guarino decided that if he couldn’t get his mother into a residential assisted living facility, he would create his own — buy a house, retrofit it for assisted living, hire staff, and give a group of seniors a comfortable and safe place to call home at a reasonable flat fee.
Tragically, his mother passed away before the first home was finished. But Guarino’s first residential assisted living home was such a success that the business expanded to three homes and eight subsidiary businesses with a staff of 50 that includes many Guarino family members and friends — all of which passed to Guarino Smith when her father passed away.
Financially free from the cash flow, Guarino Smith now teaches students of Residential Assisted Living Academy to achieve the same for themselves. She has become a top influencer in the field, hosting the Residential Assisted Living National Convention (RAL NAT CON). RAL NAT CON 2022 goes down Sept 29-Oct 2 at the Arizona Grand Resort in Phoenix, AZ.
In addition to keynote addresses and workshops from industry luminaries, the con has enjoyed celeb drop-ins like Rich Dad Poor Dad author Robert Kiyosaki and actor Jonathan Goldsmith (the “Most Interesting Man in the World” from the Dos Equis beer commercials).
Among other nuts and bolts of the business, she teaches them to finance the considerable startup costs not with their own money, but with “other peoples’ money.” Among other potential funding sources, residential assisted living facility syndications or joint ventures are an excellent passive investment option for self-directed IRA funds.
11,500 Every Day
The timing couldn’t be better for this kind of investment. The industry expects a shortfall of 1.3 million beds by 2025 — and that’s before most Baby Boomers, the second-largest living generation behind the Millennials, have even crossed into the prime demographic for assisted living.
“My mom’s baby boomer. She’s doing great, living her best life,” Guarino Smith said. “They don’t need [assisted living yet] yet. But when they do, at the peak, there will be 11,500 people turning 85 every single day. That’s crazy.”
Apart from the profit potential, the best recommendation Guarino Smith can give for the residential assisted living industry is the opportunity to make a positive impact on behalf of a vulnerable demographic.
“A lot of just real estate investors are honestly there mostly for the cash flow,” Guarino Smith said. “My dad experienced that fulfillment side. You don’t get a lot of fulfillment out of being a landlord.”
Listen to the full podcast with Isabelle Guarino Smith, who teaches investors to generate massive cash flow and make a difference by opening assisted-living group homes.
