BiggerPockets Real Estate Podcast - 671: Will the “Silver Tsunami” Flood You with Cash Flow? w/Isabelle Guarino-Smith

Episode Date: October 6, 2022

Assisted living investing isn't your typical type of rental property investing. When someone thinks “I want to get rich in real estate,” they’re often not considering setting up a home for seniors, those in medical decline, or medical patients. Investors almost prematurely dismiss any idea of RAL homes (residential assisted living) if they have no medical background and no personal need to do it themselves. This can become a costly mistake, especially when the evidence adds up on why assisted living could be the most recession-proof real estate investment out there. Isabelle Guarino-Smith is one of the investors that decided to go down this path. Without any medical experience of her own, she led her family business to become a successful assisted living brand throughout the state of Arizona. When her grandmother needed care many states away, Isabelle’s father realized that building not only a better facility, but a more profitable portfolio, was a smart move to make. And this risk has paid off significantly, as Isabelle now takes home a five-figure monthly cash flow from each of these properties. She knows that the “silver tsunami” is coming in quickly and that capitalizing on this niche now could mean even great profits in the future. But, this isn’t all about the money for Isabelle and her team. She’s seen how much better care seniors can get in smaller facilities and that this type of investment doesn’t just pay itself back in profits, but in knowing that you’re making a difference in the lives of those who need it most. In This Episode We Cover: How to transition from residential real estate investor to assisted living specialist  The three types of senior housing facilities and the only one worth investing in The “silver tsunami” that’s on the way and how to capitalize on it before it’s too late Financing options for assisted living investments and how to raise capital Renovation tips, common costs, and how much you can expect to make on your first facility And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram Dave's BiggerPockets Profile Dave's Instagram Rob's BiggerPockets Profile Rob's Youtube Rob's Instagram Rob's TikTok Rob's Twitter Here’s Why You Should Consider Investing in Senior Living Should You Invest In Senior Housing (And Is Now the Right Time)? Genworth’s Cost of Care Survey Books Mentioned in the Show: Rich Dad Poor Dad by Robert Kiyosaki The Pumpkin Plan by Mike Michalowicz The 5am Club by Robin Sharma Connect with Isabelle: Isabelle’s Website Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-671 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 671. Nothing is recession proof, but this is probably as recession resistant as you could get. Because when money gets tight, you know what you pull back on is those high-end items, that Euro vacation, that Disney trip with the kids, you stop going to Airbnbs. You stop buying nice items, but you're not going to stop paying for your loved ones care. Like that, you just don't do that. So this is probably as recession, you know, resistant as you can get. What's going on there, Bigger Pockets listeners?

This is David Green, your host of the Bigger Pockets Real Estate podcast here today with my co-host, Rob, the STR specialist Abas Solo, and we've got a great episode for you today. We are interviewing Isabel Gorino, one of the industry experts in residential assisted living facilities. This is a new strategy of investing in real estate that is relatively unknown and not talked about very often and we bring you a ton of information that would help you decide is this an investment strategy that you should get into. Isabel's family is one of the premier experts in this space and she does not disappoint. One of the things that we should

highlight about today's show is this is a strategy that sort of becomes a hybrid of business with real estate and we see in the industry this is becoming more and more popular. Short term rentals are actually a good example of this. You're not just buying a house. You are running a business and the real estate becomes a part of that business. This is similar to cattle ranchers. A lot of people don't realize a lot of cattle don't make a ton of money on the actual cattle, but they usually do on the land. And I think in the future, we're headed towards a world where real estate and business are more closely tied together. The real estate element kind of supercharges the business. It's becoming a little less passive, but you're able to make a lot more money. My personal opinion, this is a great

strategy. If you are in the healthcare industry, you know someone in the healthcare industry, your family works in there, your spouse works in there, and you want to get out of that W2 world and into real estate, but you're not sure how. Rob, what are some of your thoughts? Oh, man, this is a good one. I remember listening to this show a long time ago, and we brought in someone else in this niche, and I was just so fascinated by the, I don't know, by the asset class, right, of residential assisted living. And I just remember at the end of that episode, I was like, oh, there's so many questions that I wish they would have asked because I was just so fascinated. Today, I ask all those questions. I ask all the questions and things to consider and caveats. And I'm still

really fascinated by this. So I'm very entrepreneurial. Wheels are always turning when I really start uncovering new business models. You know, one thing to keep in mind, not necessarily the most passive way to get into real estate. It's very hands-on. But if you're entrepreneurial, if you like hiring staff and building out systems, and like David said, if you're in the healthcare industry, I think it's going to be a good one. I think you'd be real fascinated and very curious. as to what Isabel has to say. And if you just heard us talk about this, but weren't really sure what this phrase meant,

after today's episodes, you will know at a very good level exactly what goes into a residential assisted living facility and if this is the right option for you. Before we bring in Isabel, today's quick tip is, real estate is different in the ways that it works, and it's a great way to play to your strengths. Different asset classes work for different personalities or level of resourcefulness.

So don't try to follow somebody else's blue print. What worked for Brandon, what works for David, what works for Rob, don't just copy and paste what you see from us. Ask yourself, what are my personal strengths? What are the competitive advantages I have? And which asset class works best for what I've got? Build your portfolio that way and you will like it a lot more. Our guest today, Isabel, mentions that if it's not a hell yes, it should be a no. And I think this applies really good into the type of real estate that you invest in. Rob, anything before we bring in Isabel? This is a good one. Like I said, we ask a lot of questions and I think by the end of it, you're going to have a very clear picture on what this

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Learn more at biggerpockets.com slash bam. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand new construction homes, 10% below market value, and the best markets across the country without making real estate your second job? That's exactly what rent-to-retirement does. They're a full-service, turnkey investment company handling everything for you.

In some cases, investors get 50 to 75% of our down payment back at closing, plus, interesting interest rates as low as 3.75%. They've partnered with Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. All right. Isabel, welcome to the Bigger Pockets podcast. Tell me a little bit about how your family and you got started in real estate. Yeah, for me, it really started with my dad. He was a real estate investor. His whole life for 40 years since he was 18 years old. He was in this industry. And his mom, so my grandmother fell, broke her hip, and the doctor said, hey, she needs 24-7 care. She was living in upstate New York. We were in Phoenix, and it was just like, okay, what do you do?

You know, whether you have or haven't dealt with this, at some point you will, you know, a loved one needing care and assistance, and especially if you're the wealthy one in your family, this is a big reality that a lot of times they're calling you to say, what's going to happen, where do we put mom or dad. So at that time, we flew up to upstate New York to look for something suitable for her. Everything was disgusting. Everything was super expensive. The things that were decent had a long waiting list. It was just insane. We went back to Phoenix thinking, there's a lot of old people here. There has to be something more. And kind of stumbled into residential assisted living. My dad saw an existing property and he was touring for his own mom but did quick math. Wait, I'm going to be paying

five grand a month for her to live here or I could own this property, own this business, be cash flowing 10 grand a month. So he literally pulled the owner aside and was just like, hey, can I buy this? I want to buy the real estate. I want to buy the business. He got up and running right into it. Over the next coming years, we purchased two other single family homes that we converted into this. And I really just saw what he was doing and saw the changes it had made in his life. I was a flight attendant at the time when he did this. And I was like, what are you doing? What's going on? Why are you working with old people? And I just kept asking more and more and kind of pushing my way in and became his first employee. And we grew to eight companies, three homes and 50 employees since then and had so much fun. And my dad passed last year. So I've kind of taken over everything from there. But it's been the biggest blessing being left with three cash flowing businesses. I want to give that to as many real estate investors and entrepreneurs as I can, that legacy. Okay, so you own three of these facilities yourself?

Yes. With being a flight attendant, that's like a really awesome job. I mean, you get to fly anywhere you want. If you have the right airline, it's fun. I'm sure you're dealing with things. So obviously, it's very secure as well. What is that? What was that like for you?

Because you're doing that and then you're like, all right, maybe I'll do this residential, you know, assisted living thing. when did you actually jump from the stable job to going into real estate, which in a lot of people's eyes isn't really quite so stable? It's really interesting because growing up with a dad who was a real estate investor, and I watched him go through ups and downs, but I just never had that fear. He never gave us that fear because, you know, many people listening who are real estate investors and entrepreneurs know that, that the example you're leaving for your kids, it's like the rich dad, poor dad book. Like I grew up with that mentality of a dad who was the rich dad basically saying,

I'm going to get through this. I'm going to make it work. It doesn't matter what happens. We're going to make it go forward and have it be a really good thing. So I was never fearful of entrepreneurship or owning and operating any businesses or being in real estate. I saw it as a great way to cash flow and make an impact on your community. I will say being a flight attendant is a pretty sick job. Like it is so much fun, except for the fact that you basically make like nothing. And at some point I turned and looked at my dad and I'm like, you're making a lot of money. What are you doing? I want to follow suit with that. So I think not only did the cash flow drive me to it, but honestly, I was on a missions trip out in Jamaica and I saw a retirement community out there.

And it broke me like to see the conditions in other countries what's happening with assisted living. And I came back and I knew what my dad was doing. but his homes were upscale, luxury, gorgeous, you know, and when I saw how terrible the conditions were, I was like, we have to do something. So I actually really wanted to get involved to not only make more money for myself as, you know, a younger person getting involved in their career and starting their life, but also to be able to give back to other assisted living communities across the whole world because this is just a massive need that we're going to start seeing more and more. So my understanding is there's several different levels of care.

It assisted living facility in general is a place where typically older people are going to go that need in-home care. Maybe the family is functioning as the caretaker and it puts a big strain on them or it's too expensive to stay at a hospital all the time. So you have to have some way to take the pressure off of the family. But there's different levels of care. Some people need a little bit of oversight. Then there's like memory care. Can you kind of break down how that framework works and then how much energy and attention has to go into the. the different levels. Yes. Okay, so kind of the lowest level would be independent living,

which think golden girls, right? For mature women, living in a home, they need minor help with landscaping, changing a light bulb. It's really light. They're really just paying you rent, plus a little bit for you to basically be a property manager who swings by and makes sure is everything okay. Would you be dropping off groceries, stuff like that or no? I've never seen those homes run in a way that cash flows. So I don't pay attention to that market because I'm like it's just something that you know what I mean. Like maybe you do it for your own parents because it's like, oh, you know, let's throw them all in a home and we'll help a little bit, right? Would this be more when you see like the, it almost seems like an apartment complex, like 200 units of older folks that are staying

there. Like an old folks home is what we might call it. That's what you're describing. Yes, independent living. So it's like they still have the salsa classes. They still have the pickleball court, the pool, you know, all that because they're still, I mean, that's probably age 65, upwards to 85, but it's like you don't have to be that old to be there. Like it's, it's, that's independent living. You just need a little bit help. You can take care of yourself. Yep.

But you need oversight. You need someone on site in case someone does fall and gets hurt or, but mostly you're providing amenities that make it a fun place for a senior person to live. David's really interested in, in this model because he actually owns all the box sets to the golden girls from, from, from, TV series. So hopefully we can unlock this for you, Dave. Huge Golden Girls fan. Nobody knows that. It's a great show. It's a classic. Thank you for being a friend. Okay. What's the next level? Okay. Next level would be assisted

living. So that's what we're focused on. By the time you need this, you typically need help with three to five activities of daily living. In the industry, we call it ADLs, right? That's everything you do from the moment you get up out of bed to the moment you go to bed at night, including getting out of bed, walking, bathing, showering, eating, taking medication, brushing your hair and teeth. I mean, you need help at this point. So most seniors move in when they need help with three to five. Some need seven, right? Some need three. And that's where you're talking about the level of care ranging. So every person within your home might be paying a different rate to live there based on their level of care. If they're a high level of care, they're paying more. And if they're low, they're paying less.

So assisted living, we can take care of a lot of different issues. And honestly, most people, they only live in assisted living. They don't increase to the next level, which would be a nursing home, right? Doctors, gurneys, IVs, medical attention is needed at that point. Very expensive. A skilled nursing facility, a sniff, they call it in the industry. Both of those are, that's like the highest form of care. But in assisted living, that's what we've found.

focus on kind of that middle one. So if I understand you correctly, you've got the basic level, which is what you called independent living. This is more providing amenities. This is the shuffleboard court, the salsa dancing, perhaps a van that might take them from the place to go shopping and bring them back because they don't want to have to drive. Bingo. Then you've got the middle ground, which is saying there's various levels of care. They might need help getting out of bed. They might need help bathing. Maybe they don't, but they need someone to drop off food or make sure they take their medicine, something in between. So those residents will have very, levels of care and maybe the facility classifies them and then lets the nursing staff know

this is how you take care of them. And then the last year was you said like, was it a nursing home that you said? It's almost like a hospital brought into a house. Not even in a house. I don't think you can have nursing care in a house. It's basically a hospital like setting because there needs to be doctors and nurses on call at all times. You know, basically this person is, it is very end of life by that point. So is that something that people can own a property and out of the nursing level of care? Not that I'm aware of because the licensing would probably need to be so great that, and also I don't know how many doctors would be down to just go to a home that only has

six to ten residents, you know. So typically those are like big facilities that are very, very medical feeling. Okay, so if we're talking about residential real estate, you pretty much just got the first two options that you're choosing between. First two options and I only focus on the middle option. I'm curious. On the scaling side on that middle option, is that a lot tougher to scale than that first tier, given the amount of customizations with each different patient? Interesting question. I mean, when we talk about residential assisted living, right? So it's not a commercial facility. It's a single family home being used for this. Scaling is a bit difficult because 80% of this industry is currently run mom and pop style, meaning the person who owns it might also live in it,

also take care of the residents themselves. It's very mom and pop. When we came into this industry, we said, this isn't going to work. Let's run it as professional owners so that we can scale. So we really took the real estate play of it to the next level because everyone else was just focused on having one or two homes and not doing much. I will say some of our, you know, people that I work with, they want to have 50 or 100 of these package them up and sell them to the hedge fund.

funds. That's not my personal goal, but that is a way that you could scale and exit this for sure. All right. So what are the benefits of this is that it's a little less on the passive side. This isn't investing in real estate like most people get used to hearing. You are running a business. However, as cash flow becomes harder to find, as yields become smaller, more and more people are understanding that real estate is less passive income and is becoming a form of active income. Rob, you're familiar with this because running an Airbnb is much more work than buying a duplex and letting a property manager handle it. So what are some things that people need to be aware of if they say, hey, this sounds good. Well, maybe let's take a step back. What are some of the numbers that

someone can expect to make per rent? And then what are some of the expenses that they should expect to have to pay? Because you're providing a lot more service than typical just real estate. 100%. So the national average to live in one of these homes is $4,500 per month per person. Now, there's a website, genworth.com forward slash cost of care. When you go there, you can type in the area where you live or your loved one lives and it will show you how much the national average in your area is. This cost has gone up 79% over the last 10 years. And with the silver tsunami coming, it's going to keep going up.

Hardcore. We are currently 1.3 million beds short. and the silent generation is who's living in assisted living, there's only 46 million of them. The baby boomers, 76 million of them. If we're already that short, like this is about to skyrocket in cost of care. So the people, what people are paying to live in these homes, let's just call it, $4,500 is our national average. Every state varies greatly. D.C. is the most expensive at average rates of $6,978 per person per month.

And I should also say this, average assisted livings, I don't want to leave my goldfish, let alone my mom. They are typically disgusting. They smell bad. The food is not good. The quality of care is not good. I really only like to do upscale high end luxury assisted livings focusing on private pay or long-term care insurance residents, not government funding, not Medicare, Medicaid.

I want to go after that higher end market, not the tippy, tippy top, but, you know, the people who are making more money and willing to pay for the best of the best. So within these homes, you know, if you had 10 residents paying five grand a month, right, a little bit above average, you're bringing in 50K a month, your expenses, I know you asked about that, expenses are high in this industry because you're paying for 24-7 staff, caregivers and administrator, you're doing you know, food for them, activities for them, all the regular house bills, plus your licensing and all these different things, your expenses on that home that has 10 people might be running around 30K a month. And then if your debt service, your mortgage is maybe like 5K a month,

that means that home's bringing in anywhere between, you know, 10 and 15 grand a month to you, the owner. It definitely is a more active investment, more along the lines of Airbnb. This is not set it and forget it. But I like to show people how to be as hands off as possible. So is there a reason, because it seems like a high, I mean, cash flow wise, like this is great. Is there kind of like a pros or cons of pursuing residential assisted living versus just going like the traditional rental route? Or is it just sort of like a preference type of thing? I think, I mean, for me, it's a lot of intrinsic pros. Like it's you could literally have your loved one live for free. If you have a parent, a grandparent who is going to need assisted living care

and you don't want to be paying for it, they could live in your home for free and you're still cash flowing, right? We know that the supply and demand is off based on those numbers I just shared and it's only going to get crazier and crazier. So if you're looking, nothing is recession proof. But this is probably as recession resistant as you could get. Because when money gets tight, you know what you pull back on is those high-end items, that Euro vacation, that Disney trip with the kids, you stop going to Airbnb's. You stop buying nice items, but you're not going to stop paying for your loved ones care. Like that, you just don't do that. So this is probably as recession, you know, resistant as you can get because we know the supply and demand, because we know what's coming. And if you're going

after that higher-end clientele, you're not dealing with as much riff-raff. Also, providing a home for yourself, right, supply and demand, leaving a legacy for your own children, a cash-flowing business. I always say, like, money in the bank is cool, a trust fund is cool, but the fact that you're changing lives, communities, lives, these seniors get so much better care in these smaller homes than in the big box facilities. It is night and day. the caregivers as well. When you're a medical professional and you go into an industry, you go into it because you have a big heart. You want to care for people. And then you get thrown into a big box facility where you're taking care of 15 to one. That's not okay. There's no ability for them to even be that good caregiver. So providing jobs and just making such a big impact is really kind of what draws me to this and makes me say, this is worth it. The extra effort's worth it.

really good point that you're going to be getting better care, but that is going to come at a price. So the caretaker that is providing that care has to be managed by the owner, if it's an owner operator of this deal. So we have a couple clients that we've helped in the Bay Area, literally buying these deals. I go through the MLS, I find one that will work, and then we go through the process of getting it licensed. There's a lot of different ways you have to adapt the house. You need handicap access, fire sprinklers. There's a huge list of regulations. This is a highly regulated industry. The people that I've seen do the best at it are the people that already work in the caretaker space. So they're typically working for someone else or in the healthcare

industry. And then they combine it with house hacking. That to me is brilliant. So they're getting in and they're buying a house where they normally would be paying five or six thousand dollars a month to live in the Bay Area. And they're actually making money because they run the facility out of their own house. So I think that's a cool combination of these two strategies. But I want to ask you, if someone is hearing this like, this is good. I'm in the healthcare industry. I love like to be an entrepreneur. This is a clear path that you can get into it and own real estate because it's kind of a hybrid of business plus real estate investing. But the regulations make this very difficult. Can you share some of the regulations when it comes to the administrator that you have

to hire? How many people can be overseen by an administrator and how that varies by the different markets as well as all of the modifications that have to be made to the home so that it will be approved for licensing? Yes. I completely second what you said in the beginning that it is a perfect marriage between potentially someone who's in the healthcare field and someone in real estate. I know you have a lot of male listeners. And if they have ever wanted to be in a business with their wife or partner or spouse, this is one of the best businesses for couples to do together, especially that perfect mix of one of you's medical professional, one of use real estate. Because sometimes it is hard to match those. And I really just, that's where I do see a lot of

our successful people come from where they have that perfect combination. As far as the regulations go, you're 100% correct. They are state by state. There's no national rules on this. Some states are really hard and some states are not hard at all. Like Texas, the requirements to be an administrator is literally FAM, Fog a mirror. B-18 have a GED. It is lame. It's so bad. So you have to, have to have to. If you live in a state where has low regulations, look at a state with higher regulations and make your home suit that. California, like you mentioned, much higher restrictions and requirements. Arizona, one of the highest in the state. It's like 140-hour work that they have to do hours of work that they have to do. They have to take a four-hour test every two years.

Like, it's just a lot more rules and regs on getting that license. Can you clarify what role administrator plays in the business? So in real estate world, the best way for me to correlate them is they're kind of your property manager. What they would be responsible for is far greater than that. They might be in charge of marketing the home, touring the home with the residents, you know, filling the home, choosing which residents are coming, hiring and firing your caregivers, dealing with all your independent contractors. It's kind of endless. And it's a form of getting the what's the word I'm looking for here, not responsibility, but like the liability off of the owner and onto the administrator, because if a rule is violated, if you are your own administrator,

you lose your license, you can't run the facility. But if you've outsourced that, if a rule is violated and the state comes in and says you can't operate anymore, you could just get another administrator in there as opposed to you as the owner losing the ability to run the business, right? 100%. So I do not suggest that anyone become the administrator. I always, always suggest you pay someone to do that. You hire someone to do that. Put them in there because exactly that. If they're not the right fit, you fire them and you get a new one, right? You, I want to encourage people to be the owner of the real estate and the business, not working in it, right, working on it, sitting in that owner's box. How often do you, when you're,

like, establishing this business, how often are you taking on like a green administrator, someone who's just getting started or if they come up to you and they say, Isabel, I'm down to do the training that sounds like a great opportunity like can't you know would you might would you hire me kind of thing would you do that or are you always looking for someone that's kind of cut their teeth in the industry already personally i'm always looking for people who have experience and i'm just big on character and reputation so i will ask other people in the industry in the local area like hey what do you know of this person because it's a pretty tight-knit industry everybody knows everybody and if they're scammy and slimy and doing the wrong thing word gets around a real

quick. So I prefer someone with experience who has a stellar reputation. Okay. One of the things that's interesting about this model is you're operating a home and you're operating a business, which opens up doors to financing because those are valued differently. You can use a standard mortgage to buy a house, but you also have SBA loans and other options to get a business loan, which means you potentially have two sources of financing. Can you tell me from your experience how you've seen people that are running these, taking advantage of both sides. For sure, I would say the number one most popular ways to fund these is using SBA. They're very friendly to us.

They understand this concept. And that's got to be one of the biggest ways that people are funding these. The second one I would say that people are using the most is syndication or private money. So a lot of people do like to, you know, raise capital on this because there's plenty of people who are intrigued by this industry. but they don't want to own the real estate. They don't want to own the business, but they're very willing to invest. I love teaching and training on this and sharing all across the country. And when people have the mindset that no one's going to want to lend to me, it's like, you've got to be

joking. Every day someone comes up to me and says, I don't want to do this, but I want to give someone money to do this. Who do I give my money to? Money is out there. It is literally, you might be one handshake, one conversation away. So syndication, private money, SBAs are all great ways to do this. Obviously, you can do bank loans, hard money. Really, it's kind of endless. I would not suggest like crowdfunding, right? I would go with something a little bit more solid and stable,

but truly SBA is probably my preferred point of direction. I think the clients that we've helped, shout out to Stephanie Cruz, she's about a couple houses with us and she's doing the same thing in the Bay Area. I believe the method that we, or the strategy we came up with was that they used an FHA loan to buy the house. They put people, and I think California limits you at like six people

per home or something. Yeah, it was more strict. So they got it filled up. They turned it into a profitable business. They had to rehab the house with their own money. They were then able to get an SBA loan, which paid them back for their down payment and the money that they had put into the property and then made further improvement so they could charge more per room. And then that money that they got from the SBA loan became the down payment for the next facility. And that became a way. that this model is sort of self-fulfilling is when you want to scale. I love that. That is a perfect way to do this. So, Isabel, question for you on the syndication side, because I'm getting into the fundraising world myself. And when you're raising money for this, what types of, I guess,

partnerships or splits are you doing? Or like, what kind of returns can one expect from a syndication? Is it pretty comparable to other types of syndications, like a 10% return, 8% preff? I would say typically we're looking at 10 or upwards of 12% returns. We do have some people who like to go that route. But yeah, I would say between 10 and 12%, and it's pretty competitive in a line with what you're seeing probably for most other deals. Okay. David, this is getting me all jazzed up.

We have our $3.25 million mansion in Scottsdale. That would be like a, it's a 6,000 square foot, six bedroom, eight bath place. Yeah. That has real luxury. residential assisted living vibes. The sport court could be turned into a shuffleboard court, right? We wouldn't have to spend the full 25 grand. A jazzercise court. That's exactly right. We could make the pool a little more shallow and turn it into an exercise place for everybody. It would. Like that's a perfect property to do something like this with. And you're already a

jazzercise fiend. So, I mean, that kind of fits. That's actually another page I have that people don't know it's me. It's like my pen name. You can follow Jazzercise with Dave and see my morning workouts. It's exactly right. I still like to wear those like ankle weights, you know, those little sandbags that we used to put when our moms were exercising back in the day. A little two-pounders. Yes. Isabel, I want to ask you, like when the market's red hot and it's super hard to find properties at cash flow, there may be a property like this that will cash flow. What are your thoughts on if somebody can pay more for a property than what it would appraise as a typical house just off the comparable sales if they can get more cash flow on it as an assisted living

facility. That's exactly what I tell people is that it doesn't really, I should, I should rephrase this. I know where you're going with that. You are not in competition with your typical single family home buyers. Everybody wants the three, two that's on, you know, a nice street. I do not care if there are power lines in front of the house. I do not actually love if it's on a super busy road with a ton of traffic going by. I do not care if it backs up to a parking lot with a target in it. And right or there's a bus station around the corner an apartment complex right nearby that's a pro to me because that's more busy people that's more traffic coming by seeing it um a mom dad and two kids doesn't want johnny to kick the soccer ball in the road right but for me i'm going to put a

nice big sign out there and get a whole bunch more eyes and that's marketing dollars for me so i'm already looking for something different um other things like funky layouts homes that there's a lot of baby boomers who are already retrofitting their homes, adding ramps, guardrails, things like that. Right. And so those homes, then when that senior passes on, it's like a single family is like, what do we do with this home? It's kind of weird. It's kind of funky. So I prefer already the weird homes, the big homes, the homes on weird streets. We do not compete in the same things we're looking at from so many other investors. Let me ask you this, because one of the things that I deal with as a real estate investors, when I put an Airbnb in a neighborhood,

everyone loves me, right? Everyone's like, oh my God, that guy put an Airbnb in the neighborhood. It's going to make it better. Not really. No, everyone's always mad that I'm creating the parties that are going to ruin the neighborhood. I have heard similar sentiments with residential assisted living. What is that like? What kind of community outreach or backlash? Honestly, I don't know too much about this. What do you hear from neighbors if you do by a single family residence and you convert it. Is there any pushback or is it usually smooth sailing? There is always nimbism, right? Not in my backyard. Everyone's always like, no, not here. We have seen so many people just flip their lid over this happening, freaking out. So because of the

Federal Fair Housing Act, it's discriminatory. It's against disabled persons to say that you cannot do this home in a neighborhood. So that's a federal law, which pretty much trumps any city state government, angry neighbor, HOA. We did create the Arial National Association, which is the only association that represents the smaller care homes. The big boxes, they have their own associations and believe me, they've got money and power fighting for them, but no one was fighting for us. So people were getting told, hey, you can't do this and no one was there to kind of back them. So we created that association. It has a whole legal team who's there to support people wanting to get into this. It's a free membership, but it's really important for us that these are being allowed,

that people understand the value that they're bringing to the community. It is not a million fire trucks driving by every day or old people running down the street. We are not destroying the value of the neighborhood by any means. If anything, our homes usually sell for more because if someone was to sell it, they're going to sell the real estate and the business. So it's going to actually be a larger transaction and bring the value up. We also keep. these homes so well maintained because if you can't take care of your front lawn, daughter Judy is not going to think you're taking care of mom or dad. It's vital that everything is perfect and clean. Also, there's 24-7 staff there. So talk about neighborhood watch. Like, you literally have someone

awake there every day all the time. We're the best neighbors to have. You want us to take out your trash can. You got it. Man, that's awesome. Yeah, I've got so many selfish questions here because we've had episodes like this and I'm always like, how do I do this? Okay, so question, when you're trying to locate a house, is it best to, because like, for example, our Scottsdale property, that is on a pretty secluded, like, all the homes on the lots are on like five acres, for example. We're on five acres. It's relatively private to get in there. So do you ever, like, is it a good idea to find a home that's maybe like right outside the city in a suburb that is on a larger estate away from neighbors,

or is it kind of the same success rate either way? I have seen these homes where, like, for example, one person I worked with, their home is on 19 acres, right? Stunning property. It's beautiful. It's out in Tennessee. But then my homes have neighbors literally right next door. Like, it's a genuine neighborhood, right?

They both can be successful. I will say this is not, you will, you can. and build it and they will come. It's not the field of dreams. It's also not over the river and through the woods to grandmother's house. We go. No, you need to be located so strategically. And by that, I mean demographics. Demographics are absolute key in this industry. You have to be in an area where there's a mass amount of 50 to 70 year olds who are upper middle class making twice the median income who are typically home owners because that is who we call daughter Judy who pays for mom or dad to live in your home. She does not want to drive 30 minutes away. She wants to drive five minutes

down the road. So demographics is the number one key when it comes to location. I really like what you said there because it highlights a business and real estate principle, which is supply and demand. It's very easy when someone is learning real estate to hear what someone else does and just think, okay, I'm going to hit Control C and then Control V, and I should get the same result. So in many times when you're buying real estate, you are looking for a big plot of land, amazing views, the location to something people want to go to, where wages are highest. Those are all factors that weigh in for a particular demographic of buyer or tenant, that they care about that.

What you're describing is it's different here. You could be next to the most amazing waterfall, but if you don't have an aging population, of people that is useless. What you're looking for here isn't necessarily the exact properties location. It is the demographic surrounding the property. So you go to where you're finding aging population. What you described as the silver tsunami, like in Arizona, like in Nevada, some of these areas that are having populations like that Florida would be another one. Typically, that was always the stereotype as old people moved to Florida when they retire. Well, they're closer to needing care at retirement age than when they're 20 years old. They're very far

away. And you can find deals that normally would not work. It's on a busy street. That's a terrible, terrible house. I got to sell if I'm a real estate agent to a traditional buyer. They skip it. School scores are terrible. That's a beautiful property. It's really big. A lot of square footage. Can't sell it because the school scores are bad. All of these things that used to be hindrances to demand are taken off the board. They don't matter anymore, right? Like you're not going to have your population played football in the front yard where a busy street could be a problem. Like when you're a mom with six-year-old kids. It's actually a way if you get into this that you can use some of the deficiencies of other properties against them, right? It becomes like the house that's

on the market longer. You can get it at a better price because those things that would hurt its value don't apply. Couldn't agree more. And I will say it's the opportunity that matters not the investment. So I'm not afraid to buy a house full price if it's the right house and I know that the numbers are going to work. When you've seen that it's working with another home in that area, So like your home in Scottsdale, I would search then the other homes right nearby. How much are they charging? You know, what are they getting? If you can, you know that your amenities are better, your locations better or whatever,

and you might be able to get a little bit more. It doesn't matter how much that house costs. If you're going to cash flow on it, it's all about the numbers at the end of the day. They have to work. So when you, one of the things that would kind of scare me here, and it sounds like maybe the success rate is usually relatively high, but let's say that you buy a property, let's say you buy a five bedroom place and you renovate. it, you know, to make it up to code, you put the ramps in, you put the shower and the bath

situation for, to be accessible. Is there ever any fear that, like, let's say the business doesn't work out, that now you're sort of left with this retrofitted home that, you know, is tougher to sell? Or is that kind of a rare scenario? A wonderful question. So one way that I like to kind of show people how to get into this is actually just on the real estate side. So if you were to have taken a home, just like you said, you retrofit it, you get it ready, you get it licensed, and for some reason it doesn't work out for you, you can lease that home to another operator, be charging them twice the fair market rent because you just did all the work.

You just got it retrofit, you just got it licensed, you pretty much did all that hard work up front. They're just going to pay you that lease or mortgage, right? And then they're going to operate the business. so you don't have anything to do with the operations, you're now just a landlord on that. That's one way that you could kind of get out of that situation, potentially. If you have done your research correctly and you've run the numbers

and you know what's happening in that area, you should not go wrong in this. But I will say I have met plenty of people who listen to me on a YouTube thing or a podcast and they're like, oh, I went out and bought this house and now I'm in debt because, you know, I don't know what to do. And it's like, oh, my gosh, education is key. You have to learn everything you can on this before you go into it because it is not, there's no HGTV show on this. 18 year olds aren't jumping at the, you know, to get into this. Uh-uh. It's, it's a tough industry. There's a lot of things involved, a lot of rules involved,

and you want to make sure that you do it right because it's a high cost to get involved to this. Yeah, and there's certain things I'm noticing that are becoming much difficult to run these businesses. Like caretakers, I think, were a lot easier to find before. You're having to work a lot harder to find them, and you're having to pay them more than before, which means now you have to pass that cost on to the end consumer, and that becomes more difficult. I really like your model of, look, you can get the benefits of this, which are the higher revenues, without the headaches of this, which is running the business by using the arbitrage model. Like Rob, we know a lot of people that do this with short-term rentals.

They buy the house. They rented out to someone else at double the rent. And then that person asked to do the work of actually running the short-term rental. So the acronym for these assisted living facilities is Ralph, residential assisted living facility. What you're talking about is Ralebatrage, which I would recommend for someone that doesn't have experience in the healthcare industry, Raibatrige would probably be a better way to get started. So are you able to actually renovate a place and do this arbitrage method? but once you've put in, because I mean, obviously I imagine there's probably some capital

intensive aspects of this. Are you, do you know, are you able to go out and just do a burr? And like, does the appraised value of a property go up if you do, um, upgraded in these capacities? You, it's not upgraded because when someone buys the real estate and the business for this, let's, let's back it up to that. Truly what they're paying for is those seniors in the beds. if the home isn't full, it's not worth as much as you think it's worth. So it's just the real estate, right? And depending on who you sell it to, if you're selling it to an operator who's going to run an RRA, okay, now it might be worth something or they might be willing to lease it for you for something

more. But if you're trying to sell it as a regular home, no. And it's not that the bank is going to say, wow, you put in so much value. They don't see it that same way. Okay, that makes sense. So I've got one more question, and then I want to sort of jump into some actionable ways to actually get started in the residential assisted living capacity. But I imagine that there's probably a couple of deal killers, if you will, if you're looking at a home. One of those things that, to me, is popping up the most is if a house is seemingly perfect, however, maybe it doesn't have like a great parking situation.

Is that something that would deter you from purchasing that property, or is that just another obstacle to get through? The seniors aren't driving, but your caregivers are. And there's a lot of in and out throughout the day. So yeah, I would, and a lot of times even some states have requirements where they say like, hey, for every four residents, there needs to be one parking spot. So there might be some requirements that you have to do. But yeah, like parking would be something that I would want to see. I would also want to see just density of the area that there's a lot of people. And I'm not just looking for like one year trends. I'm looking for three, five, 10 year trends. Because if you're going to start a business, you're planning roots. You know, you really want this to take off and have longevity. So I want to see the density of the area. I also just want to know the story of what else is happening around this, meaning are we having a lot of people who are moving away when they hit a certain age? What did the other homes and facilities nearby look like? That would be a deal breaker right then and there. If someone is building a brand new big box facility, a brand new Brookdale sunrise right nearby, bingo. I want to put my home there because they did the internal feasibility

study to determine that that is a prime place that's going to need a lot of beds. But if there's a really old 30-year-old assisted living building that's there and it's empty, that's telling me something too. So you have to look at the story of the area, not just in regards to demographics, real estate, but also assisted living, what's happening around. Love that. That's awesome. Yeah, I get a lot of people that will ask me, like, Rob, don't you think Airbnb is oversaturated short-term rentals are over, right? Like, everyone's getting into the game. Like, should I invest in the city? And I'm like, well, are there hotels in the city? And they're like, well, yeah. And I'm like, are there being new hotels, are the new hotels being built every day?

Well, yeah, then I'm like, they've already done the research for you. And they've spent a lot more money then you're going to spend researching it. So you're probably going to be fine. So that feasibility check seems to be a really good way to think through it. So kind of moving forward here, we've addressed a lot of the pros, cons, things to watch out for, caveats, green flag, red flags. Can we talk a little bit about actually getting started if you're someone at home and you're really excited and you're like, oh my gosh, I want to do it?

I know you have sort of three steps to getting started in this business. And I'd love to kind of talk about that from someone that's like, hey, how do I do this? from step one. Yeah, so I had mentioned one earlier when we were talking about just owning the real estate, right? We call that being a preferred real estate provider. So you are just going to own the real estate, possibly retrofit it, get it licensed, get it ready to go, and you're going to lease it to an operator. That is a more passive way to be involved in this industry, and it's a great way to get started. So learning exactly what you need to know about where to put that home, what renovations need to be done. Like, you know,

David was mentioning all the modifications to the home. You know, in most states, it does not have to be ADA compliant, but you want it to be as close to that as possible. So putting in that work to make sure that the home is ready to go. The second way that you could get started is owning the real estate and operating the business. Again, I would highly encourage you to get educated on this topic, especially if you don't have familiarity with it.

If this isn't your background or where you came from, it wasn't where I came from. It's not impossible, but it is. important that you know everything involved with this so that you can make sure that you're being the best owner possible. That way is probably one of the easiest, or not easiest, that way is probably where there's the most cash flow, I should say. The third way to get started would be to just JV lend or, you know, partner with someone and just deploy your capital in this. So we do have a lot of, you know, people who I speak to who that's all they want to do. They just say, take my money and I don't even want to see it back for another three to five years, right?

And getting some good returns on that. Still playing a role in the Silver tsunami because it's either going to be a mega crisis or a major opportunity. And I want everybody to have a piece of this. I don't want anybody to get pummeled by this wave. We can all play a role. And that might just be lending to someone who does this. I like that. So there's three basic ways.

There's the most hands-on, most active. and that would be owning the real estate and the business. Then you've got the hybrid model, which is owning the real estate and arbitraging it out to someone else who runs the business. Then you've got the pure passive way, which is JV funding somebody else's deal, putting in the money and letting them run the business and getting a return. Yes. All right. Now, I wanted to ask you a question. If you're trying to figure out what would be a good market, like a long-distance investor who says, I want to do this, I think I can run it long-distance.

They have experience with hiring and operating a different business. I'm thinking like a Cody Sanchez. She'll probably start making videos on this. This is right up her alley. Would you look for an area with a very dense population, but a lot of it is urban environments like apartment complexes and condos where there isn't a lot of housing? So you've got a family living in an apartment. Mom or dad is getting a little bit too old.

There's not a lot of space. So now you're going to go find a suburb where there's actually bigger single family houses and they maybe drive 45 minutes an hour to go visit mom and dad because there isn't space within the big city? I would not necessarily put an assisted living home near a bunch of condos and apartments because demographics-wise, I'm looking, I mentioned 50 to 70 upper-middle-class homeowner. Typically, where there's more homeowners than renters, there's more money. Typically, not always, right? Not every market, but a lot of markets, being a homeowner indicates primarily more wealth. So I don't necessarily want to be where there's a lack of.

suburbia, I want to be right plop in the middle of upper class suburbia. That's probably my prime location. But I did love what you said in the beginning where you said, what if I wanted to do this somewhere else? I always say live where you want, invest where makes sense. 31% of R.L owners are remote owners. They do not live in the same state as where their home is, right? And that's fine.

You can do that. You're just going to, in that case, I would choose it somewhere that you don't mind visiting every so often because emergencies happen, stuff happens, and you may have to jump on a plane and go visit and be there. And if you hate Oklahoma, don't do a home in Oklahoma just because it's cheap. Like, do it somewhere you actually want to be, you want to go, and that you're willing to do that. I want my homes to be hands off. I'm about 45 minutes away from them. And I visit every other month. I run it like I'm an out-of-town owner because I don't want to be hands off. hands-on. That's not the role I want to play. I'd rather have a Zoom call or a conversation with my

administrator than be there visiting and getting more into the weeds. That's not actually going to help me be a business owner. It's going to help me being more hands-off, having scheduled things you come to me with your issues in this formal way. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property,

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their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade. And if you want to learn more, visit BiggerPockets.com slash retirement. So when you're trying to acquire your first residential assisted living facility, I know you have four ways of actually acquiring one. Do you think you could just walk us through those really quick? Yes. So first, you can buy land and build a custom home from the ground up.

for a lot of my, you know, people I talk to who are in the Midwest where land still exists and it's still relatively cheap, you know, that's sometimes the way they want to go or my guys who are in construction or their contractors, they love that option. Plus, when you're building a custom home, when you live in a state like Texas, Ohio, Illinois, where you are allowed to have 16 residents in a home, you're not going to find a single family home that has 16 bedrooms and bathrooms, you're probably going to have to build it. So if I was in a market like that, I would want to build a custom home that's perfectly suitable for this. So I can house as many residents as I am allowed to house. The second way that you can do this is buying a single

family home and converting it to become a residential assisted living. So as we talked about, you know, having as many bedrooms and bathrooms to start, that way you don't have to do too much of a renovation or addition. Some neighborhoods will tell you you can't make the home look different from the outside. So what does that mean? Right? In one of our homes, we built out the garage. So I still have the door facing on the outside, but it's not a real garage. Now it's two or three bedrooms back there. So different things like that. The third way would be buying an existing business and the real estate. That's the fastest and easiest way to get up and running and cash flowing. But not every market It has good ones for sale or ones that you'd be willing to take over.

So it's a nice, easy way to kind of get your feet in right away. Someone's done all the hard work for you, but you're going to pay a pretty penny for it. The last way is leasing the home. So working with someone who's going to be the landlord and you're going to lease the home from them to operate the business. Okay. We're running out of time. I have so many questions. Last thing here.

And then, David, I'll let you get to the deal deep dive here because I know that that's probably going to be. be pretty juicy. But when it actually comes to market, let's say we overcame all the obstacles, we got it permitted, the neighbors love us, and like, great, move in and you got the house, and you got it set up. Now how do you market it? Because this seems to be, you know, you're marketing to an older demographic in theory. I guess maybe you're marketing to the families of the older demographic. So I'm assuming you're probably not going to market this on TikTok. So how are you actually getting the word out there for your facilities? Yeah, definitely. marketing is so important. Number one, you are going to want all of those different key components,

like a website and brochures and business cards, as well as having a Facebook page, right? Daughter Judy, you're correct. She's probably not on TikTok, but 50 to 70 year old. She's probably on Facebook still. So being a part of your local community, working with elder law attorneys, hospice agents, long-term care insurance people, geriatric doctors and nurses, showing up at community events, whether it's your, you know, RIA group or your local farmers market to let people know you are a home in the community that cares for your seniors and you exist. So you can do anything from boots on the ground marketing to old school paper marketing. One of my best tips is I always tell people walk into the local churches, synagogues, and temples because daughter Judy, when her loved one

needs Karen assistance, if she's a religious person, you better believe she's going to church to ask for prayer, right? She's bringing that to her elder or her pastor and saying, you know, help me out here. I, do you know any resources? And the church probably won't take a referral fee from you, but if you just recently came in with some brochures and cookies, they're going to be like, wow, this nice guy came by. He had this cool home. It's right down the road. And they're an excellent resource for marketing. Last but not least, placement agents. This entire industry of people called placement agents, there's national ones like a place for mom. Absolutely do not like them.

And I stand by that. Do not use them. I prefer using local placement agents. So people who are local in the community, basically their whole job is when the senior needs assisted living, that's who you call on. They say, where do you want the home? How much do you want to pay?

What amenities are you looking for? What area do you want it to be in? And they basically pass out business cards of homes that fit that criteria. they charge either first month's rent or half a first month's rent, depending on who they are and their local fees. But that's a really nice, easy way to fill your home pretty quick, working with them. Awesome. I like that. Get into this method and you too can be the answer to somebody else's prayer. David, you're the answer to my prayers. Thank you for that, Rob. And I didn't even have to get into residential assisted living facilities and run a business.

All right. The next segment of our show is the world famous deal deep dive in this segment of the show. We go deep into one specific deal with our guests. And remember that you two can do more deals with the help of bigger pockets tools and resources, which you will find at biggerpockets.com. All right, Isabel. Question number one, Rob and I will alternate firing them at you. What kind of property is this?

residential. Shocking. Residential facility facility. Wouldn't that have been funny if she came in and said, oh, I flipped a house in, you know, like North Florida or something like that. Airbnb. Okay, question number two. How did you find it?

Oh, on the MLS. Okay, question number three. How much was it? It was 795,000. It's shocking that you were able to find a deal on the MLS. I've been told that's impossible. And the only way to find deals is to spend your entire life talking on the phone for 12 hours a day trying to find an off-market opportunity.

So in this industry? No, I'm just, I'm being sarcastic because that's, everyone says there are no good deals. There's nothing on the MLS. We're workshopping David's sarcasm still. I do hear that a lot. People complain that like I need to send the emoji face when I send a text because they're like, I don't know how to take that. I was like, all right, I hear you.

I just will never send emojis. All right, Rob, you're up. Right. And the next question that I have is, how did you negotiate it? Is that, I'm sorry, is that the right? Yeah, she paid $7.95, so how did you negotiate? Oh, yes, that's right. $7.95.

This particular home was actually listed for $8.35. We put in an offer for $8.25. They did not accept. They took it off the market, ripped out all the floors and put carpet in. Not what I needed for assisted living. Then they put it back on the market. for 800 and we offered $7.95 and they took it. So. Wonderful. All right. What did you do with it once you bought it?

We put about 200k worth of renovations in. So $9.95, just about a million dollars all in. And we made, it was a six bed five bath. And we turned it into a 10 bed eight bath without changing the square footage, 5500 square feet. And then sorry, really quick, how did you fund that? We funded it through private money. We had two lenders on the deal. And what was the outcome of the property? We got it licensed for residential assisted living, hired a licensed administrator. We have 10 residents in that home. They are paying around average rates of about $6,000 each. So it's about 60K coming in every month in our gross. Our expenses on that house run about 35,000.

and then our mortgage, give or take, 12,000. So now it's a cash flowing between 12 and 18 if I'm at 100% vacancy or less. Okay. Now, what lessons did you learn from this particular deal? Oh, well, it was very frustrating because we did not tell the seller that what we were planning to do. And my renovation costs went up because I had to take out the carpet that they had put in. and I wish that they, I think they had tile in there.

We also put in a hard wood, and hardwood soaks up liquids. That was a mistake. So would it put in LV or tile? So I think the flooring was just like such a pain. I wish I would have had a conversation with the seller, and then I wish I would have chose a different material. I really appreciate you sharing that, actually, because too often we hear about everything that went great with the deal,

and nobody says what went wrong. but trust me, in every deal, more things go wrong than they go right, even when it's a big win. I think that's a testament to real estate that you can screw up royally and come out with a profitable deal that makes you hundreds of thousands of dollars over time. It's one of the reasons I like playing in that space because the target is so big. It's like almost difficult to miss if you get a couple of things right. But individual elements of every deal go wrong. I mean, I know people that literally have negotiated closing costs of $50,000 and didn't know

that they could only collect $30,000 of those closing costs. In fact, one of them was a residential assisted living facility buyer who was buying with an agent in another state and didn't run it by me. And they lost $20,000 of money they negotiated because they didn't know that was a rule. Yeah, it hurts, right? It's like the same feeling you get when you like Mike Tyson had all this money and he lost it all to Donald King. Like it wasn't me, but it still hurts to know that it happened. There's so many things that happen like that in every single deal. And it doesn't mean you did things wrong.

It just mean that you learned. Yeah. Have you seen the Mike Tyson thing on Hulu? It's amazing. Is it like a documentary? It's like a foe. It's like actors are doing it. But I'm pretty sure he was involved.

But oh my gosh, it's so good. You have to watch it. I wonder what the auditioning was like to get someone that could do Mike Tyson's voice. Oh, I have to put on the close caption. He auditioned. He said, hi, I'm reading for Mike Tyson. Like, how hard was it to find someone that looks like him and can talk like him? That could not have been easy to do.

Also, I did want to say, I'm glad you said that because I would have assumed that carpet was actually a good idea because I have always hated carpet, but once I had kids, we moved into a house that had carpet. And I was like, oh, thank God for carpet because kids fall a lot. I know. But the thing is, carpet's a trip hazard for seniors because it's poofy and fluffy and their feet are like shuffling. You know what I mean? So it's a lot easier for them to trip on it. It's actually better just to have the tile or the, you know, luxury vinyl, hardwood carpet it stinks, soaks up liquids, and some of the wood I've already had to replace. It's just like, oh, we paid a pretty penny and I wish we didn't, you know. Okay. Awesome. Well, last question here.

Who was the hero on your team for this deal? Oh, hero on our team. Well, my dad, because he had secured the private money. So that went through his connections. All right. That sounds good. Remember that you two could do more deals with the help of BiggerPockets Marketplace. Simply go to Biggerpox.com. Look for the Navbar and you can find agents, you can find lenders, you can find tradesmen, you can find a lot of the people that you need through the website. All right, Isabel, I'm going to head us over to the last segment of our show. Famous for. It is the world famous, famous, famous for. In this segment of the show, we ask every guest the same four questions every episode. Question number one, what is your favorite real estate book?

My favorite real estate book, which it may be a business. book, but it applies to real estate for me. The Pumpkin Plan. Have you ever read it? No, I've never heard of this. Oh my God. It's really good. Was this Starbucks plan to build pumpkin spice that would just take over the world and dominate the white girl industry? No. It is so good. You have to read it. It's basically about when you grow those massive pumpkins, you know, like the huge winning ones, that you have to kill every small pumpkin to make that one pumpkin grow that big. And so to me, it's like a real estate business book because it's like stop letting all these small little things drain you and drain your business focus on what is going to make you the most amount of money the fastest. It's like it's

about killing off clients, people's deal that drain you. That's really good. Rob would grow a huge pumpkin like that turn it into an Airbnb and rent it out as a novelty. He's salivating over there at the thought of what that could look like. I see dollars. People see an orange piece of real estate that's going to rot in three days. I see dollar signs. That could be your book, Rob. The green pumpkin. Question number two, which now you've got to come up with another business book. So this is on you, Isabel. What's your favorite business book? My favorite business book, I would say the 5 AM Club.

Have you read that? Oh, man, you guys got to read. I'm just joking. Five Am Club is great. It's like just motivational, mostly like get the most out of your day, wake up, get stuff done, live every moment like it's your last. You know, my dad being such a big inspiration with me. in this business is really important for me to just have that vigor in everything I do

and try to translate that to as many people as I meet. So 5 a.m. Club. Awesome. So what are your hobbies when you're not out there building your real estate residential assisted living business? I love hiking. Praise God, I live in Arizona. I try to do the 52 hike challenge, which is a hike a week all year long. I love spin class, traveling, and I'm a foodie, great food. Question number four. I'm interested to hear your answer on this because you're in such a specific niche. What sets apart successful investors from those who give up, fail, or never get started? I'm going to say three things.

Having grit, getting punched in the face and getting back up and back up and back up, never letting it stop you, having a strong why. If you don't know why you're doing what you do and it doesn't light you on fire, then stop doing it. everything should be a hell yes or a no, everything. Three, having passion. I think that a lot of people live life drifting and never committing and never being passionate about what they do.

And I think that if you don't have passion in what you're doing, you're not going to be very successful. And even if you are, you're not going to be happy about it. I like that. If it doesn't energize you and it's not a hell yes, kill that pumpkin. Unless you can turn it into an Airbnb. be. Lastly, Isabelle, thank you so much. We really, really appreciate. This is amazing, very enlightening. I'm going to try to talk David into turning our Scottsdale Airbnb into a high-scale,

high-l-l-l-l-l-l-all. Can you tell us where people can find out more about you? To find out more about us, you can go to ral-101.com. There's a whole bunch of free stuff there, just like free books, free webinars, free phone calls. You can connect with me. And I'd love to chat with you. So RAL 101.com. All righty. Thank you so much, Isabel. Rob, where can people find out more about you? Oh, you can always find me on YouTube being goofy at Rob Built or on Instagram being even goofier these days. Doing a lot of reels putting myself out there as they say. Again, Rob Bill, what about you? I'm a little bit less goofy. I will admit that. But I'm on Instagram, Facebook everywhere else at David Green 24. And I'm on YouTube at David Green real estate. Rob, you tend to make content that just tastes better.

You're like a Pop-Tart. I notice my stuff's very dry. It's kind of like a brand muffin. Like there's a lot of nutrition in it, but you might choke on it. So I got to learn to put a little bit of icing on what I'm doing here. If you guys agree that you need to see a little bit more personality out of me, go to the comments for this show on YouTube and say, yes, we want to see more of David being dumb. Or if you're like, nope, I like David being serious and Rob being the Pop-Tart.

Just put Rob's a Pop-Tart. It will know what you mean. That was actually my nickname back in high school. Thank you for that. Isabel, great having you here. Thank you for shedding some light on this. Not often talked about option for real estate investing, but it's very profitable if you can get good at it.

This is David Green for Rob the Pop-Tart Abas Solo, signing off. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K.

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