Epic Real Estate Investing - The FUTURE of Real Estate Investing - Residential Assisted Living - Gene Guarino | 1089

Episode Date: September 30, 2020

This Wednesday, Matt is joined with Gene Guarino a real estate investor and a coach with a focus on residential assisted living care homes for seniors. Stay tuned as Gene speaks about residential assisted living, the demand that is growing significantly, especially during the global pandemic, and shares all the specifics on how you can take advantage of this strategy yourself! Learn more about your ad choices. Visit megaphone.fm/adchoices

The latest numbers are in and what they're saying about the real estate market just might surprise you. I know they did me. The full real estate update for 2020 coming right now. Hi, my name is Matt Terrio, CEO of Epic Real Estate, where I show people how to invest in real estate with an emphasis on retiring early. And if you do it right, the timing right now just might allow you to retire even earlier than you previously thought possible. And here's what I mean. To my surprise, the COVID era has been great for the housing market, even better than baking bread memes, Zoom parties, and versus battles.

When quarantines forced us to create home office space, we had to learn to balance work and homeschooling. And then we started shopping for new homes. Record low mortgage rates were reached due to the Fed's moves to lower the cost of other people's money across the economy. This has also helped boost demand for housing. The new data released this week showed the real estate market remained strong throughout the entire summer. In August, new home sales in the U.S. increased at the fastest rate since 2006, so fast that we're running out of homes to sell.

It's no wonder new home builder confidence just set an all-time high. I mean, at the current pace, we're going to run out of homes for people to buy in just over three months. This massive demand for a tiny supply is driving prices to the stars. Not to mention, sellers aren't too excited about hosting open houses amid a global pandemic. Nor do they really have to. But this could turn around very quickly due to two key factors. First, with the economy still deep in the tank and struggling to recover, people have grinded into pay their mortgages. We're looking at several million people that will hit the nine-month mark without having made a payment when the federal foreclosure moratorium expires at the end of the year.

Per the Department of Housing and Urban Development, the data shows that 17% of FHA insured mortgages were delinquent in July. Second, the frantic buyer demand is pushing prices so high, leading to an affordability crisis in which these higher home prices strip away the benefit from the lower interest rates. Even with those two factors that have historically spelled imminent doom for the real estate market, most experts aren't expecting a change in market conditions. anytime soon. Danielle Hale, chief economist for Realtor.com, says, while it may not maintain its frenzy, housing demand is expected to remain strong for the rest

of the year. Robert Dietz, chief economist for the National Association of Home Builders, says, housing demand will remain strong, supported by low mortgage interest rates and improving labor market and a suburban shift of buyer preferences. Todd Teda, chief product and technology officer at Adam Data Solution says, the odd price dynamic of outsized home price gains will normalize next spring as COVID eases and sellers get back into the market. So as a real estate investor, it's really tough to tell what there is for us to do next. You know, with skyrocketing mortgage defaults and the affordability index about to max out, typically that would suggest a market bust is on the horizon.

But with only three months of inventory, the lowest interest rates ever, and new home builder confidence at an all-time high, that would suggest a market boom for some time to come. Oh yeah. And we have this thing called an election that's quickly approaching. And a pretty divisive and decisive one at that, injecting unprecedented uncertainty into the mix. Now, I don't have a crystal ball, but here's what I'm going to do. I'm going to take advantage of the substantial demand, and I'm going to sell a few of the more problem to properties in my rental portfolio and look to the spring to redeploy those profits into new rentals, you know, when sellers are typically back out to play after the holidays. And then I'm going to consider

some super quick fix and flips with the opportunities that my seller marketing is generating. Bottom line, when demand is high, the riches are in the supply. So lock up your deals off market at wholesale prices and sell them on market at retail. Shoot, with retail buyers as frenzied as they are, you likely won't have to even fix them up before you sell them. Probably never been a better time since 2006 to double down on wholesaling. I mean, a deep cleaning inside and out, a new paint job, and a fresh bed of flowers in the front yard for some curb appeal, might be all that's needed to maximize profit in rapid time. If you'd like to learn how to do that and get some one-on-one type help, maybe we should discuss it.

go to R-E-I-A-A-Ase.com. Watch a short video that I made for you there, answer a few questions, and then just pick a time to hop on the phone and tell us what you'd like to do. If we can help, we'll show you how. And if we can't, we'll just point you into the direction to someone that can. Sounds like a can't-lose situation to me. So that first step is at R-E-I-A-A-A-S dot com. Making offers and cashing checks.

What's New? What's Next? With Ashley Montillon. Hey, guys. What's Up? Ash here, bringing you what's new and what's next. at Epic Real Estate. It's been a minute, so I have a good amount of wins to share and excited to share some news on what's next and what's coming up here real soon at Epic. So yeah, let's get right into it. So Wayne, he locked up a single family home in his local market assigned a buyer the first day.

It was his biggest deal yet, and he was able to bring in $25,000 in profit. Wow, Wayne, that is simply amazing. Congratulations. That's a big, big payday. Keep up the good work. So Chris, Chris actually had a couple of posts in the last few weeks, but I did a little bit of math, and he's done at least over 10 wholesale deals in the last three to four weeks. That is ridiculous, Chris. Wow, congratulations. I know that this business has been so big for you and your consistency is so paying off. I was super excited to read all of your posts. And I, um, Congrats. Please keep posting so I can keep sharing. Steve, so Steve put a house that he had flipped in Columbia, South Carolina on the market. And he got that under contract and for full price, the exact same day. Great stuff, Steve. Brendan, he had three deals under contract. Cody, Cody got his first deal under contract and now he's trying to find a buyer. New name there for me. Welcome to the group Cody. So Kevin, this is what he had to say. He said, I have to say that what a blessing Matt and the epic community have been.

Thank you. This mindset has changed my life. The podcast lately has been absolute fire. I closed my first actual wholesale deal last week for an $8,300 profit. He said he has some hot stuff in the pipeline and he's ready to get a few more under contract soon. Great to hear that. Kevin, thank you so much for the nice note. And we're wishing you so much luck with these upcoming deals.

So Ryan has two deals in escrow. Anita, she has a fourplex under contract, and she said it should be a solid cash flow property in the long term. Chevy, so he's currently working on four properties. He had one wholesale deal closed for a $19,000 assignment. And he says he always forgets to thank Matt, but the Academy paid for itself on its own. Thank you so much for Chevy James, and a big congrats over to you. Parker, he said he had a great revenue week and he closed about $70,000 over four deals. Richard closed a wholesale deal and profited $4,700. Good job there, Richard.

So Roberto, he completed his first foreclosure deal and finally collected that first rent payment. Eric, Eric, new name for me there as well. Welcome, Eric. He says, I'm pretty quiet on Facebook, but I wanted to thank you, Matt, for your podcasts and efforts in sharing your knowledge. He's a friend of Jack and Josh, which are two of our superstar RIA Ace clients. And he said that they've had a big impact on his journey while they've been working together. He said he finally closed a deal last week and he wanted to say thank you to those who influenced him.

Again, thank you so much for joining us, Eric. And keep it up. Jack and Josh are awesome people to know. I'm sure you'll learn a lot. And thank you for being a fan of the podcast. So Justin, he sold a flip today for a handsome profit. And in his post, he included a picture of his two kids who helped him with that deal. Tico, another new member in our group. Thank you for joining us, Tico. He says he got six deals under contract this month. He said that was his most ever and he has two in escrow. Keeping score this month has been a huge help. Great freaking stuff there, Tico. Super excited to read this. And I'm super excited for you. John, he says he's talked to his very first seller today who called because of one of his yellow letters, humbled to have the opportunity, but lots more work to be done. Yes, John. Thank you for.

for sharing. I think anybody talking to anybody for the first time could always be a little nerve-wracking. And like we said here, no win is too big or too small. So please, I am reading this from our Epic Investors, Epic Invested Facebook group from our follow-through Friday posts. So if you are hearing this, please join us, please share. I will shout you out on the podcast. And again, thanks to you guys, keep up the good work. You guys are killing it. All righty. So what is next? So I am sure that you guys have heard Matt speak about it a little bit on the podcast, but we just decided to go for it, and we are hosting a virtual Epic Intensive October 22nd through the 24th. Matt's going to be going over how to navigate the market with certainty during these

uncertain times that we're all in. If you would like more details on that, go to Epicintensive.com. All the details are going to be there for you. We're going to be over. opening up at a mission this week. So if you want to become an epic real estate investor, join us at the Epic Intensive next month. It's a lot of fun. It's a lot of information. No fluff. We get to the meat of real estate investing, creative strategies, everything you need to know. And like I said, just so you can have some certainty during these times. So head over to Epicintensive.com and we hope to see you there. So that's all that I have for you guys. Thank you so much for joining me and enjoy the show.

Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit r-e-I-Ase.com.

Here's Matt. Hey there, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early, escaping the rat race, get in that financial independence, moving that up to financial freedom. This is the Epic Real Estate Investing Show, and that's what we do here. So if this is your first time here, really glad that you found us. And if you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back. And thank you for sharing this with your friends and family. I just would not be here if it weren't for you doing that. love you for that. So thank you. The bearer of good news is back. And since schools have reopened, there have been 48,000 new cases of COVID-19 on college campuses. 48,000 new cases of COVID-19, just like that, almost instantly on the college campuses, of which mainstream media is jumping all over. This is a problem, right? This is a spike. It's a surge. It was a big mistake. We told you so.

But what they won't tell you is, of those 48,000 new cases, only two people, just two, were checked into a hospital. And among those 48,000 new cases, wait for it, zero deaths. Now, it's been known pretty much from the beginning that COVID-19 is especially harsh for the elderly

with the average age of the deaths sitting at 78 years old. And in the studies that I shared with you, I think it was last week, maybe two weeks ago, via Dr. Rhonda Patrick by way of the Joe Rogan podcast, which I went and conducted my own Google search to find those studies specifically to make sure that I'm repeating Joe's information, repeating Dr. Rhonda Patrick's information accurately. And these studies have revealed that, age, as we all know, is definitely a factor that patients over 50, over the age of 50,

are 10 times more likely to die than younger patients. But what the study also revealed was that patients who were vitamin D deficient were approximately 19 times more likely to die from COVID than patients with normal vitamin D levels. Strongly suggesting that your vitamin D levels. levels are almost twice as important to successfully navigating the virus than even your age. That's remarkable. So take your vitamin D and if you have elderly loved ones in your family that you're concerned about and rightfully so, see to it that they are taking a vitamin D supplement as well. They need it anyway. We all need it as vitamin D is vital to maintaining healthy bones.

so it's certainly not going to hurt you. It's just a vitamin, but the studies are there. The information is very compelling. And spending time in the sun will also increase your vitamin D levels. And my peeps of darker skin complexions, you are actually at a higher risk for having lower vitamin D levels due to the high amounts of melanin in your skin, which reduces the body's ability to produce vitamin D from the sun.

So just make sure that you are supplementing with vitamin D. Take your vitamin D supplement. Now, with all that said, I'm not a doctor. And I'm not claiming vitamin D to be a cure, not by any means, nor are the studies. They didn't say that either. The data, though, like I said, is very compelling and it strongly suggests that sufficient vitamin D levels will keep you out of the hospital. And it's more important per the studies than your actual age, which is actually really,

really good news. And vitamin C and zinc are proving to be significant help as well. And don't forget to exercise. All of these contribute to a strong immune system and contributing to a stronger defense against COVID-19. So what's this all about, man? Why are you talking about this on every single episode? Well, I just feel I have a platform here as big or as little as it may be. And I'm really sick of all of the misinformation that's doled out to serve a narrative. And I just want the facts. Just give me the data. Just give me the information. Give me something where there's no agenda and I just want to read it. So, and then we can all act accordingly and respond accordingly. If certainly we'll abide by the restrictions and the policy and the, I don't know, I think it's a law yet,

but of the powers that be. But the ultimate goal is for us to just stay healthy. And so that's why I'm sharing this. And so is if I just reached a few people with this information, may put their mind at ease a little bit, they took their vitamin D, and all of a sudden they contract COVID, and it's just a flu for a few days.

That's a really, really good thing. So that's why I'm doing this. And I don't know. I'm not going to repeat it every single time, but I might remind you to not to that detail. I'll certainly probably keep pressing on the vitamin D. I don't have any stock in vitamin D, by the way. I just want you all to be healthy.

So as you are listening to this, I will have just turned 51. Actually, as I'm recording this, I turned 51 just a few hours ago. And I couldn't help but think about a book I read a while back by Bonnie Ware. I was on the treadmill this morning, and I revisited that book. Bonnie is an Australian nurse who spent several years caring for patients in the last 12 weeks of their lives.

And she recorded their dying epiphanies in a book called The Top Five Regrets of the Dying. Now, I'm not dying, hopefully, far from it. But I reflect on these top five regrets frequently. I remember reading it the first time, and they really, impacted me in a significant way. And it certainly changed some of my behaviors, but there's still more changes to be made, I think. And there's still plenty of time left to do something about these changes or about these regrets. And just to make sure that they're not my regrets. And I just wanted to share them with you because maybe you could avoid these regrets as well. Because regret,

it's that type of pain that frequently and most of the time you can't do anything about. It's a regret because it's like too late, right? So I'm going to read you the top five. Number, and I'll start with five, and we'll work our way to the top one. Number five is, I wish that I had let myself be happier. Number four, I wish I had stayed in touch with my friends. That was one that really hit me, I think it was on my 45th birthday. And I still could do some massive improvement in that area. Number three, I wish, I wish I'd had the courage to express my feelings. The two is I wish I hadn't worked so hard.

And one, I wish I had the courage to live a life true to myself, not the life others expected of me. And this week, it's number three and I guess number one to an extent that particularly resonates with me the most. Three being, I wish I had the courage to express my feelings. And she wrote in this chapter that many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never really became who they were truly capable of becoming. And many developed illnesses related to the bitterness and resentment that they carried it as a result.

So I think it's a really relevant one. And maybe this is why it's resonating with me so much because of this election year and all just the shenanigans and chaos that's going on between both parties and living amid this toxic environment of cancel culture where it can be very dangerous right now to express your true feelings to speak your mind dangerous to your profession dangerous to your relationships and in the streets potentially dangerous to your health and so being 51 a few hours ago I know that's that's old to some of you, and I'm reminded by many of you that it's young, and I'm grateful for you saying that, so thank you.

But the bottom line is, it's perspective. And I regret not speaking up more in the interest of keeping peace with others. Don't want to ruffle feathers. That's kind of always been something about me that, you know, I don't have to be right about everything. And there was, it used to be saying, like, you can be right or you can be happy. So I always made sense to me. Well, I want to be happy.

So I just don't argue or fight with people trying in the interest of just being right. But I can see there's another side to that that's limiting. And what's the word? I don't know. This is a strong word. It's kind of the word of the day, but almost oppressive, but self-imposed oppression. So I just decided I'm not going to do that anymore. You know, life is too short.

We all seem to be taking ourselves way too seriously. It's perfectly okay to disagree with each other. and remain civil with each other at the same time. You know, we all agree on way more than we disagree on. That's been my belief from the beginning of being able to formulate beliefs and think about stuff like this. We all agree on way more than we disagree on. And when you ask for an open conversation about something,

because you hear that every time some sort of issue comes up, we just need to have an open conversation. It starts with an open conversation. And I just find that when people ask for an open conversation about something, they're so quick to condemn the person that they asked for the open conversation for about being open, right? So everybody, just chill on the outrage. Speak your mind. Say what you feel.

Don't suppress yourself. Be self-expressed. And don't get all riled up if somebody says something you don't disagree with. It's okay. We're individuals, we're different people, we have different opinions about things. I don't know. Anyway, I've been blessed with this platform, as I kind of mentioned earlier. It's going on 11 years in the making.

So thank you for that for being here with me. And this show, it's all about real estate investing and making as much money as possible doing it. And that's not going to change. But what good is it without your health and what good is it without your happiness? And thus, the subtle shift you might have noticed here on the show, the last couple months. And just a heads up, probably going to be shifting even further. At least when I feel inspired to do so, it's not going to be a regular thing. But if the inspiration hits me, boom, it's coming. But real estate, it is the final frontier where the

average person has a legitimate shot at creating epic wealth. So let's get into that. That's what the show's all about. So if this was your first time here, you know, it's still about real estate. So don't get all confused. But if you're not healthy, if you're not happy, what good is the money that you make from the real estate itself. All right now. Now, if you could see right now the future demand in an economy that runs on supply and demand, I mean, if you could see the future, we live in this capitalist society where we run on supply and demand, it governs the economy.

If you could see where the supply was, where the demand was, that would mean almost certain fortune for you, wouldn't it? Well, I've got as close to a crystal ball as anyone could have for your. real estate investing. And I've mentioned it several times in the past with regard to supply and demand. And as generations evolve, those generations have different needs. They create a demand on certain industries, certain services, certain products. And my guest today is going to tell you all about a demand that's growing and it's not

going anywhere and it's going to grow significantly. and that is residential assisted living and how the global pandemic just injected into this strategy a major dose of rocket fuel and details of how to take advantage of this opportunity yourself. Really great guest. And yeah, without further ado, please help me welcome to the show, Mr. Gene Gourino. Gene, welcome to the epic real estate investing show. Thanks for having me, man. I appreciate that.

Yeah, good to have you on and talk about something. Different and fresh. And I mean, from my perspective, I think it's something that's actually only going to grow moving into the future. I think as you follow demographics and you see the baby boomers aging. And then each generation seems to be a little bit bigger than the previous. So probably for long-term security to come with regard to real estate investing. Would you agree? Yeah.

You know, Harry S. Dent Jr., the New York Times bestseller, he actually says that assisted living is the best opportunity in real estate and business for the next 20 years. So that's pretty cool. I would think so, at least, really. So tell me how you got started. What were you doing just before you got started in real estate? Wow. Well, before I got started in real estate, it's been a long time. My first house, I was 18 years old. So before then, I was a musician, a professional musician as a teenager. We had a music school recording studio, small record label. We were renting a house for two years. Landlord was bad. House was worse. We said We're either going to shut it down or buy our own place. So we ended up buying a place, no money down.

And that was the first. And then we did fix and flip, buy and hold, a commercial. Flash forward 40 years. And now we're sitting here today and I do one thing, residential assisted living. Nice. So music business, that was actually my transition as well. So we had a record label. I had one.

We had major label distribution. How did you guys, what type of music did you guys do? You know, in the studio, you know how it is. you end up recording everybody else's stuff. And our stuff was on the rock and roll side, but we did everything from Christian music to weird stuff. So no major label distribution, though. Got it, got it.

Yeah, we had a really small little urban label, hip-hop label. But right at the last few years, we got the big deal, where we got the big distribution. Nice. And then shortly after that, the digital download came along and just kind of turned that whole thing upside down and wiped it all out. Yeah. Yeah.

Yeah. So assisted living. So is this how you started in real estate or how did you first learn about it and what attracted you to it? Yeah, it was about 20 years ago. I remember going to a presentation, somebody who's sharing about all different ways to make money in real estate. And then he mentioned senior housing, turning a single family home into assisted

living. And I remember it just kind of struck me that this is the place to be. And I went up and asked him and he said, well, I can't tell you anymore. And I said, why not? He said, because I don't do it. I'm just saying, you should do it. So I remember looking for people who were doing it. And the ones that I found were either successful and unwilling or unable to share it with me

or they were not successful and willing to share with me how to do things wrong. So my interest kind of went down until about 10 years ago and my own mother needed help. When she needed help, that's when it all came back. This is the time. This is the opportunity. And there's millions of people that are going to need it. Right. Okay.

So tell me what's involved. You probably acquire the house and you're doing single family houses. Is that what you do? Yeah, we use a single family home. So you probably acquire it very much the same way we all do, right? You're going straight to sell or maybe you find some deals through an agent. Maybe you go to an auction, something like that. Does that change at all or is that all pretty much the same?

Pretty much the same with one nuance and that I, and don't say it out loud to others, but I really don't care the price of the house and getting a good deal below fair market value. It's all about the location of the house. Okay. And what's important about the location? The demographics, in one word, it's the people that live around it because you don't want to be in a low-end area. You don't want to be in the spend too much money and be in a $28 million neighborhood.

You want to be in an upper middle class, so not in the middle, above the middle. And because the people who live around, your client isn't actually the person who lives in the house. It's the family. The kids who are 50-60 who are deciding on their 89-year-old mom or dad where they're going to live. Okay, got it. And you said something very interesting. You're not so concerned about the price. The location is much more important.

And is that because the income is that much greater that the price doesn't really matter. Exactly right. But the location is critically important. One of the mistakes people make when they don't know what they're doing is they get a house for free. And it's like, I got a 8,000 square foot house with a bunch of bedrooms and bathrooms, but it's in the middle of nowhere and their business fails. So this one is really location is really critically important. Perfect.

Is there a rule of thumb as to what you might. get for a, you know, your typical tenant versus an assisted living tenant. Yeah, with the, you know, when it comes to assisted living, the average person who's living in assisted living is probably in their 80s. They probably need help with three different or more ADLs, activity of daily living. And it's really the care. It's not just a place to live. So on average right now, it's $4,051 per person per month in assisted living. You might have 10 people in that home, so that you might have 10 people in that home, that home, the gross income is maybe $40,000 a month. Your expenses might be $25,000 or $30,000, so the net I'm at home might be $10,000 or more per month. Got it. Well, that's a nice spread.

Oh, yeah. You know, you just kind of hit the thing I was leading up to, which I will definitely probably most interested in, the 25K that basically get it ready, right? Or is that just monthly management? No, yeah, that's the expenses because the getting it ready, the house itself may or may not need renovation, repair, expansion, whatever. Besides that, though, the operations of the business, your biggest expense are the people taking care of the people. So the caregivers and managers, and then you have the other expenses. The real estate, and it's interesting, we're talking about real estate, but real estate's actually the least important part after the right location, right house. And when I say least, what I mean is that's the easy part, the fun part, buying bricks

and sticks, dirt and mud, we can fix it, replace it. But it's the human resources, the people taking care of the people. That's what's really important. Got it. So once you acquire the house, what are some of the things that you have to do to get it ready? I mean, there's has to be something above and beyond a normal renovation. So the key, and I use the word senior safe. The house needs to be safe for seniors. That doesn't mean ADA compliance. ADA is for if you're a business and you're hiring people with disabilities that they're able to work for you. We can, can't have somebody with a disability taking care of an elderly individual. So the house needs to be senior safe. That might be smoke detectors, could be sprinklers or fire suppression, typically

wider doors, smooth floors versus carpet, maybe ramps if there are steps in the front. But senior safe would be the best way I could describe it. Okay, but no real extraordinary effort, right? Well, you know, I was just at an open house for one of our students here in Arizona and they did a tremendous this job on renovating the house. So every single bedroom had its own bathroom. So a lot of bathrooms are at it. All the bathrooms were perfect because there's no bathtubs. It's a walk-in, roll-in shower. So there's things that you might do, grab bars, near the toilets and showers, walk-in versus a tub. But you could go low-end and you can go extremely high-end. We like to go more on the high-end. Right. You track a better client, I imagine, right? Yeah, and a better client,

meaning they were going to pay more money. Right. And it's probably more competitive for the nicer place because the family wants to take care of their grandma, grandpa, their mom and dad. Yeah, we focus on private pay. So not Medicare, Medicaid, low-end, people that can't afford it. We focus on people that have the kids.

Like if you and I are brothers and we're going to pay for mom or dad's care, we're going to use their income, their assets, but ultimately we're responsible. So we want people that have a higher level of income so they can pay more. And they want mom or dad to have a great experience. Right. You kind of mentioned different types of insurance or financial assistance. Is there any sort of certification or approval that the house has to get to qualify for that type of stuff? Yeah. And I want to be

clear, I want you to do it right. So certainly you can have an unlicensed house and business, etc. I don't want anybody to do that. But when we talk about a licensed business, the license itself may be a certain certification by the state. There's kind of three elements to it. One, the house. needs to be senior safe. So the fire inspection, life and safety code. Is that an official word or is that just kind of your jargon, the senior safe thing? That's fine. Because most other people think ADA compliance and it's not that. It's safe for seniors in the way I described. So the fire and safety code, it has to be inspected and a green tag for that. Two, there needs to be a proper manager. So it could be licensed, could be certified. The manager themselves of the business, the

home that we're talking about, the lowest that you'll see in the country is 18 years old, a GED or higher, a 24-hour training course, and boom, you're a manager. That's not good. I want them to have a lot more training than that. But you need a manager, somebody who's in charge, because I don't want to do that. You don't want to do that. We're an investor of the business owner. And the third part is you need policies and procedures.

So that's kind of in other businesses, they call that SOP, standard operating procedures. if this, then that. Because the state needs to know you're taking care of these seniors. Do you know what you're doing? Do you have policies and procedures? Super. All right. So let's talk about the people that soak up all of the money.

What type of people do we need? We need a manager. We know that. And then is that separate from the caregivers? Actually, it can be the same as. So you do need caregivers. So let's just assume for a minute we have that kind of an average house in America used for this.

And there's about 30,000 of these homes right now, by the way. So let's say there's 10 residents. The state will say you only need one caregiver on staff on duty 24-7. Now, I don't like that. We do five to one. So if I had 10 residents and I had two caregivers during the day and one caregiver at night, and that staffing itself, at $10, $12, $15 an hour, that's your biggest single expense is that staff.

And you can have, just like you said, astutely there Matt, It could be a caregiver that's also the manager. It doesn't need to be a separate individual, but somebody needs to be in charge. Got it. And then as the owner, the role of the owner is to basically manage the managers. You perfectly said. That's exactly the way I put it. To manage the manager.

And I always suggest to people that you need to make that decision right up front. Are you going to be hands on or hands off? And I think as soon as you say hands off, good. That's great because what you're saying is I've got to find the right manager who's going to take all of that burden and responsibility. Ultimately, I'm responsible, but you get it. And if I do that, then it's not a matter of, I've never been called in in the middle of the night, somebody called off, and I have to go fill in. That's not me. The owner of McDonald's isn't going to do that either. You mentioned just now responsibility is where, where's the dark side? What can go wrong?

If you were to say it a little differently, I get asked all the time. What's the challenge? Okay. Challenge. Very good. challenge is people. You know, it's always people. And what I mean by that is residents, their family, the caregivers, the managers, it's the humans. If it was, you know, just like anything, church, if it weren't for the people, it would be great. Right. So it's all about the people. So choosing the right manager and the manager choosing the right caregivers is where it all starts. Because ultimately that's what somebody is there. They're going to put mom in your care and they want to make sure that mom is loved and taken care of. It's not your crown molding. It's the care of that

they're getting. Right. All right. So what's the what's the resource or the source that you go to to find the people that you can rely on to manage and take care of the residents? So there's two different ways that we do and you know in our training we offer a lot more but two different ways. One is go to people that are currently doing the job and ask them, do you know of a good manager? And the reason why I say that is because good people know good people. You know, we hang out in the same places, same masterminds, whatever it may be. so that asking somebody else who's good at what they do is saying, do you know somebody else? They may say, yes, I do. They may say, no, I don't.

They may say, I'm interested in a job. So you can, I'm not saying coach, but you can find good people that way. Second, there's lots of different ways, but there are training organization managers and caregivers. You can go there and ask for, is there somebody coming through your training that you think might be a good manager? but word of bound through referrals is definitely my number one choice. Perfect. You just said something. Oh, something I say all the time.

I'm saying it's for a decade now. I was like, real estate is the safest thing going. It's the people that are risky, right? Oh, it's true. Oh, yeah. Contractors and property managers from the situation, you've eliminated about 90% of your risk. True that.

Right? So same there. Perfect. All right. So let me ask, in the acquisition process, any government assistant special programs, special financing that empower somebody just getting started to do this? Yeah, we teach seven different ways to fund your project, your business, the whole thing. But anytime somebody is looking for something special

from the government, I'm always saying, you got to remember, they're giving you something and you're going to have to do something. So there may be different grants or programs that are available, but in senior housing, what that might look like is, hey, we'll give you a million but half of the residents have to be low income paying half of what you should be getting and do that for 10 years and we'll forgive the loan. It's like, I don't want to be a nonprofit. I'm not looking to get. So there are some things available, but I'm going to suggest you do it as a for-profit

and do it with that in mind, not being to hold into the government on a program like that. Okay. There was something else that come to mind, but I was actually listening to you. So imagine that. I forgot what I was saying. I hope so, Matt. Come on now. Yeah, no, I was.

I'm listening to Joe Rogan a lot. And I'm like, he's such a good listener. And I'm just like, I'm going to practice that. And so I don't have a good flow. So that's good. I don't have anything written down here, nothing prepared. Let me just share some more because the question. Yeah, tell me more.

What am I not asking? There's the question. I was going to say, you know, the questions that people always ask are, number one, what about liability? You know, these people are elderly. What if they fall? die. Well, first of all, we're all going to die. But the difference is we know that when somebody moves into assisted living, they're closer to the end of life than they are at the beginning.

Me, the business owner, my goal is to keep your mom alive as long as I possibly can. She represents $5,000, $6,000 a month to me. So if I could feed her green goo and she lived longer, she'd be eaten green goo. So I want her to live. The difference is the liability aspect. We know and we have professional business liability specifically for this industry and what we do. Costs a dollar a day per person, that 10 residents, 30 days, that's $300 a month. So it's a line item. It's not this big burdensome thing. It's not a medical situation.

It's not medical malpractice, but it's not just your slip and fall you'd have for an umbrella policy on a home. So that one piece there, the liability. The other big challenge that people ask and you alluded to it is the people, how do I find good managers and caregivers and you know it's really interesting because you can put an ad in Craigslist and get the phone to ring no problem at all the key is finding good people the right people and six months ago when the world was different unemployment was three and a half percent now it's you know under 10 i think right now which is amazing but the point is it's easier now than it was before but what's really cool is in this industry nothing has changed meaning there's nobody who's unemployed or places shut down

or, no, these things are a, you must take care of mom. So the caregivers are working. They're working overtime. New people are coming into the industry because they're like, well, this is the one industry that's not getting shut down or held back. And then even the competition between the big box and what we do. So Brookdale, Sunrise, Atria, there's, some of them have said, we're not going to let new people in.

We're having new people come in. They've got a big box, 100, 200, 300 residents. we might have 10. So ours is a much safer solution for those seniors. So it's a really great time for assisted living and specifically residential assisted living. Got it. So you said you might have 10. So what's the ideal property to look for?

We got the location. We want in our upper middle class. But what's the ideal property look like? Yeah. I'm going to give a rule of thumb. 300 square feet of living space per resident is very nice. Now, the state will probably require half of that. So you could do it in a 15 or an 1,800 square foot house and have 10 seniors in it.

I don't recommend that. That's not what we do. That's a lot. That's really packed. It is. And there's homes just like that all across the country that are full with waiting lists. I just, that's not what we're looking to do. What we do is a lot of people will call it luxury.

So it's maybe a 4,000 or 5,000 square foot house. So 300 square feet per resident, just in general. You're not going to find a 10-bedroom house typically. you're going to take a three or four bedroom house, convert space, and you can have shared rooms or private rooms. Private rooms are better than shared rooms. You can charge more. More bathrooms is better than having less bathrooms. But in an average home, you could legally do it with a 1500 to 1,800 square foot house with two bathrooms and five bedrooms, put two seniors in a bedroom and you're good to go. I don't want you to do that, though. Right. No, you give a, just pile on the bad.

name a landlord already has by doing that, I think. Yeah, and it's well beyond landlord because, again, it's not a landlord-tenant relationship, but you're providing a service to them. That's really good, too, in this day and age, a lot of people right now are, most of the people that I know, and you know, too, Matt, a lot of them who have tenants are probably doing fine. There's not a lot of people not paying. But if you're in a low-end situation, those of the people are saying, well, screw it, I'm not going to pay my rent. People don't dine and ditch on dad, you know, or mom. They're going to pay for it. They're going to take care of it. And if, when they run out of money, quote unquote, the kids will now start taking money out of their pocket

to pay for it. You just mentioned that about people paying rent, right? You and I, we both know a lot of real estate investors. And I haven't really found any sort of consensus that people aren't collecting their rent. Everyone seems to be getting paid just fine. So I'm wondering like, where do all these out of work people live? But, you know, it is the low end, you know, people who do have, you know, C level apartments, et cetera, those are the ones are more susceptible to a low-end worker who can't work at the restaurant because it's closed. But most people I know don't do that. There may be coming a glut of A level, but that B level or A-minus level, they're doing just fine. I'm not seeing a lot of issue there at all. Yeah. I mean, I'm here in Vegas and a bartender makes

$100,000 a year. And, you know, but all the bars are closed. And we had a vacancy company. open and we had like six applications like all on the first day. Yeah. Everybody. Yeah. Exactly. Okay. Well, all right.

Fantastic. So how is business different for with the pandemic? Has it changed it all for you? It's actually, in some ways it's gotten better and easier. What amima that is, I mentioned to you that the competition, Brookdale, Sunrise, Atria, the large, big, huge communities, they're having a hard time because with 200 residents and 30 people coming in and out, that's a problem for them. So people are moving out of there into homes like we do because they are safer in their community.

So that's great. There's also pent up demand. There's people saying, I'm going to keep mom or dad at home as long as I can until I get the all-clear signal, then we'll come out. So there's a lot coming our way as well. What I really love about it is the, I've been doing this for seven and a half years and teaching others how to do it for about seven years. But I've been saying this thing is coming.

It's coming. And now is the time. and I feel like this right now. We're just, now people know about us. They're writing articles that smaller or safer and big places are trying to get small. We're actually launching a franchise this year, announcing at our national convention,

but we're launching a franchise using this model. So it's a cool time to be in this industry. Fantastic. Yeah, some of these industries really got big spikes in their business with this situation. And the small is safe type thing. I can imagine that's really resonating. with a whole lot of people, especially after some of the disasters we experienced right in the

beginning, right? Yeah. And I feel for those people, if you're listening and you're thinking, well, I've heard that Corona has killed a bunch of seniors. Well, nursing homes, number one. And number two, really stupid criminal policies where they say, take a sick senior and move them back into the nursing home. I don't know what these people were thinking, but that was the absolute worst thing to do.

You can't do that. So seniors, it's a wonderful thing, too. And I want to get this across to you that our motto is do good and do well. So we all know do well make a lot of money, but doing good, doing something that's going to impact other people and help other people. That's an incredible piece right there. So doing good and doing well is what we're all about. Absolutely.

Yes, I'm fighting off going down the bickering and ranting about what happened at the beginning of the situation. I'm just not going to go there. It's amazing. It's amazing that the person that did that is, has the nerve to write a book about it on how well he did it. Unbelievable. It's crazy. Well, this has been a pleasure, Gene, getting to know you and about your business.

I'm intrigued. I'm like already, my wheels are spinning up how there might be an opportunity for me just to do what I'm doing. I certainly wouldn't want to do it on my own. So if anyone else is feeling the same and they wanted to get in touch with you, what would be the best way for them to do that? Yeah, I'm going to give you a website. I've written three books on this. One is called the Insider's Guide to Investing in Senior Housing. the newest one is Blueprint

How to Start Your Own Residential Assisted Living Business and the third one I won't announce yet because we're going to launch that at the National Convention but if you'd like to get a book or watch a webinar or have a conversation, go to R-A-L-101.com. R-A-L-101.com. Residential-assistedliving.101.com. Yep.

R-A-L-101.com. Try to make it as simple as I could. I was thinking out loud, like what does that actually stand for? I figured it out. See, I'm pretty smart. I'm not as dumb as people think I am. But anyway, Gene, am I going to see you here soon in the next week?

You are? I'm going to be, I'll get in on Sunday night. How about you? Great. Let's Saturday. We're flying out Saturday, so we'll be there Saturday night. Cool. We'll touch base.

We'll have that wine and we'll rant. I love it. I love it. Thank you. All right. Be good. Talk to you soon. Bye-bye.

You got it. Thanks. All righty, before we go, the show would not be completely. if Mercedes didn't share her deal of the week. So here she is. Hello, Mercedes Torres here. Your turnkey girl from Cashflow Savvy. And welcome to the deal of the week.

This week's deal is phenomenal because it has a bit of a spin on it. Well, inventory during these crazy times is super limited. I mean, houses are flying off the shelf. I can't keep properties in. my inventory for more than an hour, no joke. So, when you see the deal of the week land in your inbox, I mean, act fast. As I always say, real estate investors move quickly. They put the deal under contract, then move slowly through the due diligence process to get out of the deal if they absolutely have to. But you always want to take possession of the deal as soon as it meets your

basic criteria when you see it. So moving on to the deal. So moving on to the deal. of the week. Congratulations to Marcella from the Bronx, New York, who picked up this amazing three-bedroom, one-bath, single-family residence in Alexandria, Indiana. This single-floor home has 1388 square feet. It was fully rehab, has amazing brand-new oak floors, a brand-new kitchen, and a brand-new bathroom. And best part of all, it sits on a lot with 7,000 square feet of beautiful green plush grass. The home sold to Marcella for $148,000 and it's just under that 1% rule that I live by. But this property has mad appreciation on it. Now, it doesn't have it now. It does have a little bit of equity, but it's situated in a market where there is massive demand for rentals,

meaning there's plenty of space for this property to appreciate. And yet and still, it is ranking in a 7.23% ROI. Now, on this property, we were able to tenant this property before the rehab was even done. How's that? that for a turnkey property. I mean, rentals are going super fast, both in the renting aspect of it and in the selling aspect of it. So, my friend, when you see a hot deal, act fast. And if you want to see the deal of the week, go to cashflow savvy.com, that's savvy with two vs, scroll to the bottom of the page and download the frustrated investors' guide to passive income. And you two will start to see the hot deal of the week.

Catch you next week. For more information on the deal of the week and other properties just like it. And to get a free copy of the frustrated investors guide to passive income, go to cashflow savvy.com. Cashflow savvy with 2vies.com. Cashflow savvy.com. Alrighty, so if you found this episode valuable, who else do you know? There's a good chance you do know somebody else who would too.

And if you think about it, when their name comes to mind, share it with them and ask them to click the subscribe button when they get here. I'll take great care of them. All righty, that's it for today. God loves you, and so do why. Health, peace, blessings, and success to you. I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow.

Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. We didn't know. Homeworld. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.