You’re going to learn about one of the best opportunities that almost no one knows about.
You can generate $36,000 of gross monthly income and net $10,000 of monthly cash flow by converting one single-family home into an Assisted Living Home (ALH). It’s easier to do than most people think.
Years ago, I met Gene Guarino, Founder of the Residential Assisted Living Academy. I recently sat down to interview him because there is so much buzz about his training academy. His ALH students are finding great success with this exact model. Here’s an interview summary:
Why Assisted Living Homes (ALHs)?
- The demographic trend is your friend. Our society is aging rapidly. 4,000 Americans turn age 85 every day.
- You serve a societal need by helping seniors.
- Make terrific income of $5,000-$15,000 every month for each ALH you own.
Why your model of converting single-family homes rather than “big box” buildings into ALHs?
- To many seniors, it feels like home. Big buildings can feel like an impersonal hotel.
- For you, the investor, the real estate price is more approachable.
How do you begin?
- To invest in ALHs, start with the property’s location. It should be close to the residents’ family and in an upper income area. Don’t look for mountains or beachfront.
- The best homes to buy are: larger than average, one level (ranch) style, in a convenient location. 300 sf per resident, smooth floors, and more bathrooms is preferable.
- ALH financing options favor you. It’s often a 20% down payment. There are SBA, USDA programs, and more. Improvements are often financeable too.
How do you optimize your income?
- Attract “Private Pay” residents, not Medicare / Medicaid residents.
- You attract them by owning your home in an “A-class” (nicer) area.
How do ALHs compare to residential buy-and-hold income property?
- ALH residents stay longer.
- ALH residents are lower-impact than “regular tenants”.
- Your ALH Manager’s role differs from that of a residential Property Manager. They manage the resident caretakers. ALH caretakers make lasagna, see that residents bathe and take medication, etc.
- National average income is $3,600 per month per resident. With ten residents, that’s $36,000 of monthly gross income. Subtracting expenses from property taxes to insurance to food and more leaves you with $10,000 of monthly net cash flow.
- Your staff (ALH Manager, caretakers) should consume 40% or less of your gross income.
- You provide food for the residents. $5 – $8 / day is typical.
- Your cash flow should be about 30% of your gross income.
There must be some risks and challenges. What are they?
- Retrofitting a home into an ALH aren’t onerous. But you’ll likely need: wider doorways, grab bars, an entry ramp, more. It does not need to be ADA-compliant.
- Getting the first resident into your new, empty ALH is an early hurdle. Best tactics include holding an open house, or even discounting the rate for the first resident.
- Each state has their own business licensing and documentation requirements.
What does an ALH owner / investor actually do each week?
- Gene spends perhaps 5-10 hours weekly: managing the Resident Manager, on the phone, payroll time, returning e-mails or stopping by the ALH.
What else should I know?
- Rather than owning both the real estate and the ALH business, optionally, you could own the real estate and rent it to another ALH business. You’ll get more income than with a traditional rental.
- Zoning and Homeowners’ Association rules often favor ALHs rather than impede you.
- Though the average monthly cash flow from each ALH is $10,000, you can increase your income and buy multiple ALHs.
I went to my home state’s government-run training. It was weird. It’s like it was taboo to discuss profit or income.
If you’re going to do this, don’t pick a difficult, unlucrative, Mom-and-Pop path.
You want to learn from Gene Guarino. As the Residential Assisted Living Academy owner, Gene will tell you how to own and operate ALHs in a professional, profitable, scalable way in additional to taking good care of residents.
As a 15-year real estate investor myself (that doesn’t own ALHs but recognizes opportunity), what’s the real deal here?
If you’re highly busy, this might not be for you. If you will create some time, you can achieve financial freedom with ALHs faster than you can with passive buy-and-hold residential real estate.
Your path to wealth shouldn’t be “normal”. Normal is what everyone else does and has; that’s why they’re broke and dissatisfied.
The time is right for ALHs. “Go and do” gets you farther in life than “wait and see”. Get actionable:
- Listen to my full audio interview with Gene here: Apple | Android | Full-version.
- Gene kindly offers readers a gift: FREE 6-Part Residential Assisted Living Training.
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Great blog post. I’ve met Gene and am considering this an one of my investments in the future or near future. Great stuff Keith!
Hi Gene. I might consider in starting an ALH in the near future. My residence is Central Florida. Investing in a relatively big house would be ideal. Please send me any information about starting an ALH and financing opportunities. Thank you.
I also need where I can get financing to built a suitable home for assisted living