Real estate is like surfing … it’s all about riding the waves.
Smart investors catch a big wave early and hold on for a long ride … and one of the biggest economic waves in history is happening RIGHT NOW.
It’s all being driven by baby boomers. No matter what phase of life the boomers glide through, the businesses that serve them prosper.
Over the next two decades, the baby boomers hit senior status … and senior-centered industries are set to boom along with them.
One industry we’ve got our eye on … healthcare … really, the place where healthcare and real estate meet.
We’re visiting with a seasoned real estate entrepreneur about how investors can ride this particular wave through residential assisted living homes.
In this episode of The Real Estate Guys™ show, hear from:
- Your booming host, Robert Helms
- His waving co-host, Russell Gray
- President, CEO, and Founder of RAL Academy, Gene Guarino
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Get rich in a niche
Not all real estate investments are created equal.
One of the things that drives demand is demographics. As a real estate investor, who are you going to serve … and how profitable can it be?
The old adage goes, “Get rich in a niche.”
Today we’re talking about a niche that has demographics firmly on its side … which means potentially years of profit for investors like YOU.
We’re diving into senior housing.
A new approach to senior housing
Gene Guarino is president, CEO, and founder of RAL Academy … and our go-to guy in the senior housing sector.
“Everybody’s going to get older and eventually need some kind of assisted living,” Gene says.
With aging baby boomers moving our way, senior housing and assisted living is a great niche to be in.
It works nationwide … and baby boomers are living longer.
And senior housing is a pretty wide niche. It covers everything from 55 and over communities to hospice care and everything in between.
Gene’s niche within a niche is somewhere in the middle.
Gene caters to older seniors … typically in their 80s or 90s … that still want independence but need some help with their daily living activities.
Right now 4,000 people a day are turning 85 years old. That’s 120,000 people a month and more than 1.4 million a year.
Not all of them need assisted living, but hundreds of thousands of them will … and there’s no room at the inn, so to speak.
One of the biggest misconceptions we need to break is that assisted living is a three-story building with elevators and a common kitchen.
“What we do is take a single family home in a residential setting. Not a big box facility, but a home,” Gene says. “You could literally be living next door to it, and you wouldn’t even know it.”
Gene and his team take a home in a nice neighborhood and do a little bit of conversion, get it properly licensed, and hire an expert staff.
And the payoff can be enormous.
Think about it. You might have 10 seniors in a home each paying $4,000 or $5,000 a month. The net profit from this setup is significant.
A home that might rent for $2,500 or $3,500 a month to a single family now rents for somewhere around $30,000 a month.
These homes offer a moderate amount of care. The seniors living there don’t need skilled nursing help … but they do need some basic help.
So, senior housing is really in two parts … the real estate side and the business side.
How you can get involved
The beauty of senior housing is that there are multiple ways to get involved.
You may have real estate investors who want to own one of these homes … but they don’t want to be involved on the business side.
Or you may have some individuals who don’t have the funds to purchase one of these homes … but they are ready and willing to be involved in managing the day-to-day operations.
Most people don’t realize when they walk into an average business that the business owner behind the counter doesn’t own the real estate.
Someone else owns the building and leases it to the business. The business is making money … but the real estate owner and everybody in between is making money too.
Senior housing means you can own real estate, lease it to an operator, and get it up to twice the market rent with a long-term, low-impact tenant.
“The key to this transaction is to find a tenant first,” Gene says. “Find an operator you can lease the residential assisted living home to.”
There are many reasons to find your operator before you find your property … the primary being taking their suggestions on potential home locations.
The time is now
So what’s the end game? Gene says his students have found multiple profitable strategies from investing in senior housing.
The first is acquiring multiple homes and then selling them off as a portfolio to a larger conglomerate.
Another approach is to simply hang on to the properties over the years making really good cash flow and giving the property an opportunity to go up in value.
Lastly, you can build your own brand and business into something that you can eventually sell as a branded package.
No matter what you do, Gene says the time is now.
“Business is good now, and it’s getting better and better and better. And once the spike from the baby boomers hits, it’s just uphill from there for the next 20 years,” Gene says.
So, to get in position to ride this wave, there are a couple of ways to go.
You can either passively invest in the real estate with an operator … or you can learn the business side of residential assisted living.
“I wish there was a training like the one that I give people that I could have attended,” Gene says. “It would have saved me so much time, effort, and money.”
We always say that the best way to learn is to learn from the people who are already doing what you want to be doing. Through RAL Academy, Gene is enabling investors to do just that.
Gene’s trainings take place over three full days in Phoenix, Arizona. On the second day, students load up and visit some of Gene’s operating homes in the area to see what senior housing looks like firsthand.
To learn more about RAL Academy and opportunities that lie in senior housing … listen in to our full episode.
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