Earn Massive Cash Flow with Assisted Living Homes – Keith Weinhold
You are about to learn about one of the best investing opportunities that is top secret, and almost no one knows about. By converting one single-family home into an Assisted Living Home (ALH) you can make $36,000 in gross monthly income and net $10,000 of monthly cash flow. It is easier to achieve than you think.
A while ago, I had the honor of meeting Gene Guarino, founder of the Residential Assisted Living Academy. Recently, I interviewed him because of all the buzz going around about his training academy. All his ALH student are finding great success by using the exact same model. Here is the summary of when I sat down and interviewed Guarino:
Why invest in Assisted Living Homes (ALHs)?
- According to demographic trends, the population is aging rapidly. Every day 4,000 Americans turn 85 years old.
- You will be serving to society by helping out the seniors.
- Every month you will make a terrific income of $5,000-$15,000 for each ALH you own.
Why use your model of converting single-family homes rather than “big box” buildings into ALHs?
- To seniors, ALH’s feel like home and a big buildings can feel like an impersonal hotel.
- The real estate price is more approachable as an investor.
Where do I start?
- In order to invest, start with the location of the property. Preferably, it should be close to the residents’ family and in an upper income area. Stay far from mountains or beachfronts.
- The best homes to invest in are: larger than average, one level ranch style, and in a convenient location. Preferably they will have 300 sf per resident, smooth floors, and more bathrooms.
- The 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, instead of Medicare / Medicaid residents.
- You attract that type of residents by owning your home in an “A-class” 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?
- Instead of 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.
Recently, I visited my home state’s government-run training and the discussion was awkward. They felt uncomfortable discussing profit and income, as if it was taboo. If you are going to invest using this route, do not pick an unlucrative, difficult, Mom-and-Pop operation.
Learn more from Gene Guarino, as the Residential Assisted Living Academy owner, about how you should own and operate your own ALH in a profitable, professional, and scalable way while taking good care of your residents. I recognize the ALHs opportunity as a 15-year real estate investor. So, what si the real deal here?
If you are a really busy person, this might not be the best real estate investment for you. If you are able to create some time, you will achieve financial freedom through ALHs faster than you will with passive buy-and-hold residential real estate. Your journey onto creating wealth should not be traditional. Doing “normal” is what everyone else does, and why they are broke and dissatisfied.
Right now is the time to invest in ALH. Get actionable, “go and do” will get you farther in life than “wait and see.”
- 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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