Ep 215: The Silver Tsunami of Seniors is Coming with Isabelle Guarino

A lot of you find these homes, they're very mom and pop and so running it the way we run it is very different. It's very new and a lot of people aren't doing that. So it is a unique opportunity because someone else who set this up, you could purchase the real estate, purchase the business. You're up and running, cash flowing right away.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larson. If you haven't yet, get a copy of our book for free at our website, next level income.com. that's www.levelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Isabel Guarino who's going to talk about residential assisted living, which is part of what I think is going to be the biggest opportunity that we have seen in real estate since the baby boomers entered the market in the 1980s. Isabel's a two time best selling author named one of the top influences in senior housing and she's been featured on Bigger Pockets, the Wealthy Way podcast and Sales Disruptors. She's also the COO of Residential Assisted Living Academy. She shares the message of doing good and doing well with hundreds of thousands of entrepreneurs and investors across the country. Twice she's been named the future leader of assisted living and she is the nation's top coach and trainer for all things RAL that we're going to talk about today. She's also going to share more about how to get in touch with her, her company and check out their RAL national convention coming up this fall. Isabel, it's so good to see you again. Welcome to the show.

I'm happy to be here. Thanks for having me.

Yeah. Wow. So much has transpired since I met you back in 2019. It was at your national rel National Convention in October of 2019 and it was like a different world because that was pre Covid and it's been wild what's happened since then. But something hasn't changed. If anything, it's probably gotten even, even more solidified. And that's the demographics behind what we're going to be talking about today, which is really a special segment of senior housing. So I don't want to, I don't want to ruin the steal the thunder that we're going to talk about, but I had the pleasure of knowing your father, Gene. I heard him on a podcast about six years ago, which is, which is what put us in touch. But I'd love for you to share what you guys are doing a little bit about your business and your background.

We teach and train real estate investors and entrepreneurs how to and operate their own residential assisted living homes. So whether they're owning the real estate and the business or just one or the other, or even just vesting in this, we show people how to kind of do all of those different options because what you just said, the demographics, the baby boomers have been driving our economy last 70 plus years. And this is, you know, the final chance to take advantage of the trends that they create. The silver tsunami as of seniors as we call it. So they're definitely coming to shore and timing has never been better.

I love it, I love it. The silver tsunami of seniors. And I'm a demographics guy. So I'm, I'm, my, my degree is in engineering. Isabel. I'm, I'm just a numbers guy. I'm like, hey, if I can look at the numbers and the numbers make sense, then that probably is going to drive me in the right direction versus like oh, do I feel good about this or that. And I'll never forget I read a book called it was the roaring 2000s by a guy named H.S. dent, Harry S. Dent. And Harry talked about demographics and he'd talk about like what, what's business segments to look into. And he had all these charts and it was like, hey, you can predict like how many bags of potato chips are going to be sold because you know what the average age of the American consumer was going to be. And when there was a lot of teenagers in the baby boomers homes, potato chip sales boomed. And then he talked about how baby boomers were going to need surgery and how the medical device space was going to boom. So I spent 18 years in the medical device industry because there you go. I got into the multifamily industry because of that. And when I heard about the silver tsunami and the numbers are breathtaking. It's, it's about what, 10,000 a day are going to be turning. They're turning 65, but are going to start turning 80 as well, right?

Yep, yep. Right now I want to say it's 4,000 a day turning 85, 10,065 every day. You do get that fall off right now. We don't all live forever, but it's pretty insane. I mean are living longer, they're living healthier lives because of what you just said. Surgeries, we don't have, or we have insane medical technology that we didn't have back in the day. So people are living longer. And 70% of people are going to need daily care for an average of three and a half years. So this is huge. I mean, seven out of 10 people are going to need some form of support along their life.

Okay. So approximately 10,000 a day, turning 80, they go in. Or seven out of 10 are going to need care, some for about three and a half years. Sometime between around 80 and 85. Is that about right?

Yeah. Average age is 85. Yeah.

Wow. And I got a chart. I'll put that in the. In the show. Notes that, from an article I wrote. I mean, and it really is a tsunami when you look at the demographic chart that, as it explodes upward. So there's, there's a lot of options out there. And I want to talk about specifically what, what is residential assisted living? Because if we talk about senior housing, as we kind of go down the spectrum, and you can kind of jump in or correct me if need be, but you have independent living, which would be basically like a 55 plus community, you know, which is kind of catered towards an age group. Then you have assisted living, which it has different scales. Maybe you have, you know, some meals that you get, or you live in an environment where you can call on help, but then you can have skilled nursing, which kind of is a step up from there. Whereas residential assisted living. And this is when I first heard about it, I was like, this is brilliant. So tell the audience, like, what exactly is residential assisted living?

Yeah. The big difference we all know assisted living to be is it's a huge commercial facility. Right. It's long hallways with impersonal staff where your loved one's just a number. Right. You're getting crappy food and not great care. The ratios are 30 seniors to one caregiver. That's insane. That's sick and wrong. Right? We should be. They should be illegal, but they're happening. And that's what we all think of when we think of assisted living. So what we are is kind of, let's say that's the hotel where the Airbnb, that's the taxi, the Uber. Right. We're that newer, smaller, more personalized version of assisted living. It's a residential home that houses somewhere between six and 16 seniors. The resident to caregiver ratio is 4 to 1 or 5 to 1, depending on your numbers. So the care is a lot better, the food is better, the attention's better, and you're Living in a home, not something that's homelike. It's a literal, actual home in a regular residential neighborhoods like where we all grew up. So you don't have that big adjustment as a senior feeling like, oh my God, now I have to move into this huge building where I don't know anybody. I'm intimidated. It's totally. We're it. It's exactly like you grew up. You walk a couple, you know, feet to the kitchen, you, you walk to the bedroom. And so it really has that more comforting feel. And that's the big difference is the care, the quality and the feel.

Yeah, yeah. And this is, I think, you know, as we look at the financial aspect of this, you know, I think if, if you hold people and said, hey, you know, Isabel, what would you like when you get older? We'd say, hey, I want to stay in my home. My grandparents, they said, and I was kind of the de facto decision maker in place of my mother in terms of the children, because my mother passed away prior to my grandparents. So my grandfather passed on a few years ago, but he was in memory care. My grandmother was in assisted living. And they both said, oh, we want to stay on the farm. Because they lived on this farm, 50 acres. I started going there when I was 2 years old. The problem was farms are kind of dangerous if you're losing dexterity and things. And we looked into bringing somebody into help 24, 7, but the cost was, it just was prohibitive. They didn't have the ability to do that even with long term care. So I guess, you know, going down the cost spectrum, the top would be, hey, just hire somebody to come in 24, seven, make food, care for somebody, or have a loved one do it. That's, you know, basically giving up one career for another. So residential assisted living is, is a, either a converted home or a purpose built home where you have basically a small community. So what you said, between six and 16 individuals. But then you have dedicated caregivers. So you're in a home, you have access to the kitchen, the things, the modifications that are done and that. And the idea is it gives you the same feel, but it's a little bit more cost friendly. Is that right?

Absolutely. Because just like you said that one on one care, right now the average cost in our country today is $27 an hour for one on one.

$27 per hour. So you're looking at paying somebody somewhere between 50 and 60 thousand dollars a year. And that's. Is that right?

Oh, even more than that, 24 seven.

It's 24, seven. I'm just thinking like eight hours a day. So three times that. So really maybe is upwards of grand a month. Wow. Yeah.

So as much as the mortgage or lease, the food, the utilities, the activities, cable, we're talking 20, 25k a month to keep your loved one at home. It's extremely cost prohibitive. So. Exactly like you said. Most people say, okay, well I don't need 24, 7. I just need while I'm at work hours a day, which is more reasonable. But that's still four or five grand a month. And average cost of assisted living right now in our country's $5,350 per person, per day.

I'm sorry, Per month.

Per person, per month. So it's. If you have to take the night shifts and the weekend shifts and pay that 4 or 5 grand, or you can pay that 5,000, 350 and have 24, 7, this makes a whole lot more sense to go with that all inclusive option.

Yeah. And that's the other thing that I thought was really cool when I looked into the residential assisted living, or I think you say ral space. Right. Which is one of the things that we saw with my grandmother is she didn't really have peers. So even in a larger facility, there are people that she didn't really relate to. And then she had kind of a couple people that were, were nearby to her that were kind of not, not her roommates, but were her neighbors in the facility. But this gives you a community as well, which is, which is healthy because if you're 80 or 85 years old, you don't have the capacity to drive around and, and have the same maybe social activities that you did. So I think there's additional benefits to that versus just being at home by yourself all the time with somebody.

Absolutely. It's tough to have that one on one care. It's tough on the caregivers, it's tough on the seniors. They're not getting that same social interaction. But just like you said, sometimes in the big facilities it's almost too much. So it's just that it's the Goldilocks. It's which bed fits. Right. That middle bed. That's just enough. You get just enough social interaction, you get just enough, close enough to one on one care that it just kind of makes sense.

Yeah, I love that. And you know, I think the, the fact of the matter is a lot of people in this country and it's not Medicare, it's Medicaid, typically that pays for for long term care facilities. A lot of people say, oh, I'll rely on Medicaid. The problem is, and if you're listening to this show, you or your loved ones probably don't want to deal with this situation. You basically have to give away all your assets and get down to the point where you can qualify for Medicaid. So that's not, that's not an appealing option. You know, it's if you don't want to, if you don't want to be in an assisted living facility where, where you can't afford one on one care. This is like you said, kind of a perfect Goldilocks option. So I know we have some listeners that are saying, wow, I never knew this was an option out there for me or my parents. And then, you know, the other thing is you, you actually teach and coach. We've talked about this in the past. You actually coach investors or business owners that are interested in participating and creating, you know, these opportunities for other people and participating in the profit side of things. How does that work? Isabelle?

Yes. So not only do we do this ourselves, but we teach people how to do it. We've been teaching for over 10 years now on how to own and operate the real estate in the business. So we have three day trainings in Phoenix, Arizona. We also have online courses where we go through really everything, step by step, how to purchase the facility or from the ground up, or convert a single family home. There's a bunch of different ways you can kind of go about getting into it, looking at that right area, find your staff, getting the home license and then marketing to fill the home with seniors. You know, we take it as far as getting you so systematized that only need to be spending about five hours a week setting up the business. And so you are not really working in the home at all. Right? You are dealing with the seniors, you're just working on the home, on the business. That's what we do and that's what we are blessed to be able to show others how to do how to cash flow on single family homes being used as residential assisted living homes.

I love that idea because if you look at the past, you know, 10 or 15 years, coming out of the Great recession, you know, there was a lot of opportunities. You could build an affordable cost. My, I was telling you earlier, my wife and I were building spec homes. We could, we could double our money in 12 to 18 months. It was great. Building costs went up, land costs went up. You know, now interest rates have gone up. It's really challenging to make kind of almost any deal work in today's environment. But there's one big segment that I found still tends to be profitable and make a lot of sense when you're, when you're penciling out numbers. And that tends to be what I call operating real estate. And the bucket I would put in there. You had a great one. You said short term rentals, Airbnbs. We actually have two ourselves, my wife and I here in Asheville. And you know, it's great because you get, you're getting a premium versus just renting it long term. Yeah. Car washes is another one that we operate in. And you get the real estate, but you also get the business mobile home parks and then ral residential assisted living. And what do these all have in common? They have the real estate, which our investors are quite familiar with and our listeners, and then we also have the operating side of the business. But the operating side can be daunting. So I think, you know, if you could share a little bit more about that because, you know, I think there's, there's a big challenge today in finding care for our seniors. Right. And whenever I see a big challenge, I see a big opportunity. How are you and your group not only teaching, but also solving that problem on the operating side?

Yeah. I think it really comes down to what you have to offer. You have to think about the person who is a licensed administrator, is a licensed caregiver, what job opportunities are available to them. The reality is, is that their heart is for seniors. They could work at out or Chick Fil A and probably make a similar wage. Right. It's minimum wage plus a couple bucks an hour. But they would never do that because that's not what they love to do. That's not what they're put on earth here to do. They are here to care for and love seniors. So they've chosen this career for a reason. You find that right person and they have been working in a big box facility. Right. A Brookdale Sunrays atrium. Many times they're burnt out because they're doing that 30 to 1 care. They're the one person taking care of the entire floor. And listen, they love seniors. They want to do a job desperately and the system is set up to fail them. So when you hear all the statistics about, hey, caregivers are terrible and there's such bad or an abuse and all this stuff. Yeah. In the big boxes because the system's failing them because they only care about profit over people. They are not putting People first. And I don't just mean the seniors, I mean the caregivers. When you bring them into our environment, they're in a luxury home, getting fed three meals day and only having to care for four or five seniors. It is a night and day difference. Not to mention you are being a owner operator, you're treating them with respect and loving them and, and appreciating them for the hard work they're doing. If they had to choose which job to do, they're going to choose you all. All day long. We do not have problems with loyalty and with people staying. We've had staff who've been with us for eight plus years when a dream of going anywhere else. If you asked your local Brookdale, how long is the longest employees been with them, I bet you they'd say six months. Turnover is insane in big boxes. It is terrible. And it's because they're not taking care of their staff, bottom line.

Well. And I can imagine, I mean, if I'm caring for, you know, 20 or 30 or 40 seniors, that's, that's really, that's really hard work, you know, backbreaking work. Yeah, that's really hard work because I know just spending, you know, a day with my grandmother, day with my grandfather, it's, it's challenging. By the end of the day, I'm like, all right, I got to take a break.

Yeah.

And get out of there. So going room to room to room. And I will say that, you know, the staff has been very pleasant where my grandmother is, but it's a smaller facility in a rural area, you know, so you have that. But certainly if there was this kind of opportunity, it would be very appealing. Yeah. And it's actually, you know, I think I'm thinking about my aunt who we actually had hired for a period of time to take care of my grandmother. And she said, I don't know if I can. My grandmother's a handful. But, but it seems like there could be an opportunity. So if you're a caregiver for one of your loved ones, you could potentially hat you could convert that into a business opportunity and help mitigate some of the costs. Do you have people that you work with to do that? Are you a high income business owner or professional earning 2, 300,000 or even more a year, but still feel like you're living paycheck to paycheck? Are you comfortable working until you're 65 or 70 to retire, or do you want to achieve financial independence and live life on your own terms? You could Join myself and make mat four and learn how we both became financially independent in our early 30s. We will teach you how to make, keep, and grow your money, teaching you strategies to maximize your earnings, keep your income that you've earned through tax strategy and legal structures, and ultimately teach you how to grow it by determining your personal investing strategy, as well as teach you how to analyze investments so you can grow your passive income to the point to live life on your own terms. Our coaching clients reliably do this in seven years or less. To learn more, check out our coaching program at nextlevelincome.com forward/coaching. That's nextlevelincome.com forward/ coaching.

You need to go get licensed to become the caregiver. And as long as they're willing to do that and you have heart for it and you want to do it, you can. But it really. We're showing investors how to do this. We're not necessarily focused on that caregiver, more focused on showing the investor how to purchase the real estate, hire the right people. So maybe they have someone in their life like you. You're the perfect example. You're the investor. Maybe your aunt wants to be that caregiver. Okay, great. Have her go get licensed. She can work in the home. But you're still paying her the same as you would a stranger who would be a caregiver. Coming to work wouldn't change the pay within the home. If you, if you wanted to work in the home, you could do that. But that's not what we show people how to do.

Yeah, yeah, but it could help the revenue from the business could help subsidize what we were already paying for my grandmother, for instance, and make it a little bit.

Oh, your grandmother would be living for free.

Yeah, yeah. So that's another. If you're listening and you say, well, hey, I'm facing this scenario, I like the idea and I like the business idea. You could actually utilize it and potentially subsidize the carrier. Loved one. Or even make some money. So let's talk through that. So I remember when we looked at this, Isabelle, there's, there's a few different pieces. So let's, let's kind of walk through them. Does this work in any state? Does it work in any area?

You have students in all 50 states, but you want to be in strategic areas within your state. I'll say that.

Gotcha. And I know there's. From working with my grandparents and through their situation. You know, you have kind of different areas. You have memory Care. You have specialized memory care. You have kind of like standard assisted living, if you will. Do you have facilities that specialize in one or the other? Only one. How does that work?

All three of our care homes here in are all licensed as assisted living homes. But we do teach and train people how to do memory care homes as well. It's a great option if you're in that where you can only have less than 10 residents because it maximizes, maximizes the amount you get per resident. It's about an additional thousand to fifteen hundred dollars more per month if you need memory care. So that, you know, 5350, someone in memory care paying 7000 in the exact same home just because they're a higher level of need. So if you can have less residents in the home, we want the maximum amount of income per resident. So being licensed as memory care is a great option for you right there.

Yeah, that makes, that makes good, good sense. Would, would you have to build these properties? You mentioned converting them. You know, if somebody's looking at a house, I, because I again, you know, if I buy a rental house today and I rent it out with interest rates where they are, the numbers just don't make sense in general.

Right.

I'm not going to make any money. Can I take like, how does that work with respect to the actual property itself?

Yeah, there's four ways you can get started. So one is leasing a home to use for this. So kind of what we were talking about, you know, prior to, to the show was buy a home. Someone else. Right. Is buying a home, renovating it, getting it licensed and ready to go. And they're leasing it to an operator to run the business. So that's one way you can buy land and build custom from the ground up. If you're in an area where you're allowed to have 16 residents like Idaho, New Jersey, Texas, Kansas, Illinois, I would buy land and build custom because we're not going to find a 14 or 16 bedroom home on the market.

Maybe in like a, maybe like a fraternity house. Right, but. Right, that's a little, that's probably not the right fit. Yep.

You're gonna have to do massive renovations anyways. You may as well make custom suits. So you can, you know, build from the ground up. Third, you can buy a single family home and convert. And when I say single family, I don't mean a 3, 2 don't mean a 1200 square foot. You know, although that is single family. You know, I'm sitting in a 4,000 square foot, 6 5. Right now, this is also a single family home. So we're talking more luxurious, bigger, larger homes with a bigger square footage footprint. And then the fourth way is buying an existing. There's 30,000 group homes that exist in our country today. And. Yeah, and 80% of them are run by immigrants. People from other countries who come over, maybe they were a doctor or nurse, wherever they're from, they open up shop, they run one of these care homes. They live in the home, work in the home, do all everything themselves. After about seven or eight years, they burn out. So we're responsible for the other 20% of the industry that's running this as professional business owners. But a lot of you find these homes, they're very mom and pop. And so running it the way we run it is very different. It's very new, and a lot of people aren't doing that. So it is a unique opportunity because someone else who set this up, you could purchase the real estate, purchase the business. You're up and running, cash flowing right away.

Yeah, no, I like that opportunity. So there's multiple different ways to get. Get the actual property itself. And I like that opportunity. So, you know, if you're listening, if you're an investor, you know, you could partner with an operator. If I could buy the real estate, I could probably rent that real estate for a higher amount than if I was like an Airbnb, than if I just was renting it long term.

Yep. If you've done the renovations, you've added fire suppression, sprinklers, guardrails, handrails, you've made it, you know, more bedrooms and bathrooms. Bathrooms, smooth, clean floors, all the different things. To get it licensed through the state, they would be willing to pay you sometimes up to two times the fair market rent. We do that with our homes, and it's a beautiful thing. We have nothing to do with it. 8 year contract. Get a check every month and don't have to worry.

That's. That's. You're talking my language there, Isabelle. So you. We mentioned technology. Technology is helping people live longer. I'm. I'm very bullish. I'm very optimistic about where it will be. I want to live to see 2100. I think I'm a little older than you, but, you know, if that would mean I'd have to be 122 years old to get there. Yeah, there we go. So try to stay as healthy as possible. But I also know that there's a lot of AI and there's a lot of cool technology. That is coming into the senior care space from administrating, administering drugs, medications, I should say. Also there's, I was, I was talking to a gentleman and he was telling me that you can use like low frequency sonar and determine where people are moving in a facility and that can even monitor their breathing and their heart rates. What, what do you see in terms of the future in senior care? You know, as we face kind of, kind of a crisis in terms of the number of people able to care for our seniors and then this explosion of seniors that are coming. How do you see technology interceding to improve the quality of care and the scope?

Yeah, there are new things coming to market every single day. And I tell people all the time, I'm like, hey, if ral isn't for you to do something in the senior care space, just like you were saying, you know, reading Harry St book and saying, hey, I'm going to follow the money. The boomers are the money, right? That's following. It's whatever they touch turns to gold, basically. And at this point they're just starting to need care and assistance. So whatever that looks like, get involved in something that will touch the boomer generation and you will be set. With that being said, there are amazing technologies market every single day from different activity programs like Toffel, which is basically a system that shoots down and they play like wack games, they could do puzzles. It's got hundreds of thousands of games on it and it's just a system that shoots down light and it basically provides endless hours of activity just like you were talking about. Track, like wearable watches? More or less, yeah. The aura ring, Fitbit stuff, stuff that tracks them within the home, tracks, breathing, falls, UTIs. It is insane. It is so incredible, the technology that's coming seen in other countries where they're starting to make robot caregivers. I don't know if that will ever make it to, you know, the US if people will be down for it. There's so many cool things. And the best part of this as, as an assisted living owner is you can, the more you implement, the more hands off you can become. So our homes are 45 minutes from me right now and I visit them every two to three months. I, I, I'm, I'm never there because I don't need to be there. Right. Even things.

You got your team in place?

Yeah, I've got my team. Even things as simple as Zoom, like I can have my meetings on Zoom. I don't need to go there and listen anymore. There's tools where you can say, I need to feed 10 people. Here's the meals. I'm thinking they will generate a full menu loaded into instacart. You say 10 people, they'll tell you how much of each ingredient you need, and they will shop it for you, deliver it to the house.

Love it.

Amazing.

It is. I love that. Well, and the thing is, if you look at all these things, you know, like my aura ring, my Garmin watch it, it helps me take better care of myself so I have a better quality of life. So if. If I'm. If I'm in a. A home and I'm caring for individuals and I know that somebody, you know, had a fall or I need to. I need help preparing a meal or doing those things. These things can augment the human experience. And I really like that. I mean, we use it with our technology, with our investors. We call it automated authenticity. It helps us put the human energy at the right place at the right time. And I'm really excited to see how that continues to impact this industry. I'm also excited to see you again in October. I know just in a couple months. Here we got. It's actually like the week after my anniversary trip with my wife, which I do every year. Um, but now I'm excited to get back out there. So tell the audience about the RAL National Convention coming up in October here, Isabelle.

Yeah, it is a super fun event that we host once a year for care homeowners or people in the industry. Really, anybody can come, even if you're just interested in looking around. It's unlike our three day fast track training because that's more of the educational, step by step training. This event is the party. It's where we have a of fun. There's different vendors, sponsors and speakers. We've got Ed Mylett, Kim Kiyosaki and Mark Victor Hansen coming this year. It's an incredible event in Phoenix, like you said, October 3rd through 5th. I'm so excited because it's really the event where everyone in this industry gets together and just gets to hype each other up. And, you know, no one was hosting events for the smaller care homeowners. There's events for the big box owners, but there was nothing for us. And so we said, you know, years ago, we got to be the first ones to do it. And so, so began the RAL National Convention. And I'm excited to have you there again this year and hopefully some of the listeners will want to come.

Yeah, absolutely. So what is the best place to find out more about what you do, what you do with your company. And also the RAL National Convention, if people are interested in checking that out as well.

Yeah, if you want to learn more about the RAL Academy, check out ral101.com It's a great place to grab a bunch of free resources, books. You can schedule a call with me or the team, grab free webinars, whatever you want there. And if you're looking to grab a ticket to the national convention, you can go to ral n.com awesome.

We'll have all that in the show. Notes I got, I got you pulled up right here on the other screen. I can see your video on there as well, Isabelle. And yeah, if you're interested in checking it out. I've learned so much through your organization about this space. It's, in my opinion, from a demographics perspective, the biggest opportunity that we've seen in the real estate space since the baby boomers entered the real estate market in the 1980s. And Isabel, we're excited to have you share this with the audience today. We'll certainly have you back on and I'll see you here just in a couple months.

Thanks so much. Much.

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