Episode 66. 3 Pitfalls in Residential Assisted Living with Isabelle Guarino-Smith | bonniegalam.com

Podcast

Episode 66. 3 Pitfalls in Residential Assisted Living with Isabelle Guarino-Smith

October 3, 2022

We all know about househacking, but have you ever heard about hacking senior living? Well, this week’s guest on the podcast did just that! Isabelle Guarino-Smith shares how she got into Residential Assisted Living and 3 Legal Landmines facing investors in this asset class.  In this episode, you’ll hear: Navigating NIMBY-ism as a Real Estate […]

We all know about househacking, but have you ever heard about hacking senior living? Well, this week’s guest on the podcast did just that! Isabelle Guarino-Smith shares how she got into Residential Assisted Living and 3 Legal Landmines facing investors in this asset class. 


In this episode, you’ll hear:

  • Navigating NIMBY-ism as a Real Estate Investor
  • Three Legal Risks when Investing in Real Estate 
  • How to Finance Residential Assisted Living

If you’d like a shoutout (and a chance to win a $20 Home Depot gift card), just leave a review on Apple Podcasts and send a screenshot of it to me on Instagram via DMs!


Navigating NIMBY-ism as a Real Estate Investor

Purchasing property that requires zoning approvals or changes adds a layer of complexity to a purchase. Oftentimes, RALs are existing structures that need to be changed to permit a group home. Other types of businesses like halfway houses, sober living homes, and homes for adults with mental or physical disabilities may also count as group homes. Our guest, Isabelle Guarino-Smith explained her RAL projects are often opposed by neighbors of the property. However, Isabelle has had great success in explaining what her property is, the type of traffic it will bring, and how the property is an asset to the community. 

Importantly, RALs and other forms of group homes are protected under federal anti-discrimination in housing laws. These laws prevent discrimination against housing development based on age or disability. 


Three Legal Risks when Investing in Real Estate 

There are three main legal risk that RAL investors fear. Isabelle explained they are Liabilities, Neighbors, and Death. 

Neighbors we discussed in more detail above, but getting anytime you have a property requiring municipal zoning approvals or changes, you should be prepared to make your case for the value to the community the property will bring and the ins and outs of your business. Having no good response or stating “we’ll have to wait and see” isn’t going to win any votes from the town!

RAL investors often fear liabilities and lawsuits as well. (Just like any other real estate investor!) Isabelle and I agreed that the best approach was to implement Offensive Asset Protection™ strategies. Isabelle explained that the best thing you can do to protect yourself is to have clear and detailed policies for the employees and residents, and, of course, to create a safe living space. Isabelle explained that risks are often lower in RALs versus other senior living situations because the staff to guest ratio is much lower. Isabelle also suggested loading up on insurance. 


How to Finance Residential Assisted Living

Purchasing RALs is not as simple as purchasing other forms of residential real estate. That is due in large part to the fact that there is a business being run out of the home…. Not just a home. The most common forms of financing used by investors purchasing or building Residential Assisted Livng are SBA loans and syndications.


Listen to House of Horrors on your favorite podcast player

Listen to the show on your favorite podcast platform and be sure to follow, and leave a review to help introduce the show to more real estate investors like you!


About Isabelle Guarino-Smith

Isabelle is a graduate from Arizona State University, a former flight attendant, Walt Disney World intern and now Residential Assisted Living Academy’s leading lady. She has been working as the COO of the company for the last 6 years, keeping everyone in line and on task. She’s been featured in many magazines and articles on the topic of Senior Housing and most recently was given the title as one of the “Top Influencers in Senior Housing”. Isabelle also won Aging Media’s “the Future Leaders of Assisted Living” award in 2020 being 2 of 100’s under 30 to make the list. 

We own and operate 3 RAL Care Homes and have taught 10,000’s how to open and operate their own all across the country! Our primary focus is to positively impact 1 million people through Residential Assisted Living. We offer trainings to teach people to do good and do well with Residential Assisted Living! There are currently about 20,000 RAL homes across the country of which 10% of them are built and wondered by our students who have come to our training and learned our RALA methods to create quality care homes for seniors in their golden years.


Isabelle’s Horror Story

It doesn’t happen very often but occasionally you are faced with needing to remove a resident from the home. Isabelle explained, one time there was a family of a resident who would come into the house and tell the chef to leave. The guests would start cooking and playing really loud music and just kind of take over the kitchen. The guests spoke pretty vulgar and it was disrupting the house and so Isabelle’s team eventually had to ask them to stop. When they did it again Isabelle’s team had to tell them that they can’t come over and do that. Eventually Isabelle had to ask that family to remove their resident because they were not a fit for the home. Isabelle expressed that this situation was unfortunate because the family was at fault for the resident’s removal. 


Resources Discussed in This Episode

  • You can sign up for any of Isabelle’s upcoming 3-Day Fast Track Training Events by going to www.RAL3DAY.com 
  • Isabelle’s website: RAL101.com  

If you’re ready to legally grow and protect your portfolio today, save your seat in my free workshop so you can learn how to take the simple legal steps to protect the portfolio you’ve worked so hard to build. Click here to watch my free workshop so you can get protected right now!


Episode Transcript

Bonnie Galam 0:00
Guys, you’re in for a real treat. In this week’s episode, I had an absolute blast talking with Isabel about residential assisted living, because it’s actually an area I’m pretty personally interested in learning more about. And so if you’ve thought about investing in nursing homes assisted living, or RLS, or are just, you know, generally interested in how the changing demographics in the US will affect real estate, in the long term, and in the short term, then you’re in for a great episode. And I hope you stick with us through this conversation, because I haven’t left and learned so much in a while. And when Isabel described the landlording problems as tenants and toilets, I died a little bit inside I was cracking up. But then again, her problems aren’t actual dying. And so it’s just a reminder that, you know, every single investing strategy has its ups and downs, there is no perfect risk free strategy. And so in this conversation is about shares three of the common pitfalls of RLS, and how to navigate them. It’s a great fun, legal discussion, market discussion that we have with each other. And so I’m really excited to bring it to you. And Isabel’s journey I thought was really interesting, because while it was an unexpected, you know, asset class, it’s really a familiar story. I mean, you’ll hear how they basically start off by House hacking, and Arielle for her grandmother. And I think a lot of us can relate whether we’ve house hacked and office like myself, or house hacked a home is really interesting when we can apply this like familiar investing strategy to maybe an unfamiliar asset class. And that’s, you know, the thing with, you know, RLS, and other forms of senior living, as well as that it’s something that most of us are going to encounter, you know, God willing, in most of our lifetimes, either for ourselves or on behalf of a family member. I mean, we’re all getting older, and we’re living longer, but we’re not always living, you know, healthy art. It’s great if we can live into our 90s. But most of us are not doing that totally independently. And so this conversation ranges from, you know, how to run and own and Ral, to actually structuring their own wealth to ensure that, you know, it doesn’t have to get liquidated to pay for these, you know, very expensive forms of living. And so without further ado, let’s dive into this week’s episode.

Bonnie Galam 2:29
Welcome to the House of Horrors Podcast where each week we dissect problems real estate investors have faced, how they navigated it, and of course, what you can do to avoid ending up in their shoes. Welcome, guys, I am so excited to have our guests Isabelle here with us today, Isabel is in the residential assisted living space, which I’m really excited to hear about. I recently went to a meet up with some local investors, and a whole bunch of people were in residential assisted living, and I’m starting to get FOMO. And maybe Isabella put my dreams into check a little bit during this episode, but I don’t think so. Because like everyone says, and every episode, no one has quit real estate investing, no one has like thrown in the towel because of any of these bumps. But I also think it’s great to have reality checks and just to like start turning overstone Seeing where there’s these red flags. And I think that senior housing, residential assisted living is one of those things where it’s like, we can see the writing on the wall, all of us know, like the economics of where the demographics in this country are going. There’s a lot of boomers, and they’re gonna have to go somewhere and Isabel and I were joking about that before we hit record. And but it’s one of those things where like, these are not regular tenants like these are people who not just need housing, they need to care as well. And so it comes with extra layers. And I’m really excited to you know, peel away this onion today with Isabel get to know her a little bit, get to know a little bit about this investing strategy. And of course, talk about some horror stories that she and her students have experienced in this really intriguing space. So without further ado, Isabel, thank you so much for being here.

Isabelle Guarino-Smith 4:11
Thanks for having me. And what a cool intro. I’m really excited to dig deeper on this topic with you.

Bonnie Galam 4:17
So how did you get into the residential assisted living space? I know from your bio that you had sent me that you like, did work at Disney World. And so in my head, I’m like, okay, that’s kind of hospitality ish. And this is kind of hospitality ish. But it’s like the total opposite age spectrum. Like we’re talking about, like five year olds and 85 year olds completely.

Isabelle Guarino-Smith 4:35
No, actually, it started with a lot closer to home, my grandmother fell broke her hip and the doctors like Hey, she needs 24/7 care. You know, what are you guys going to do? And at many families when they face that issue, it’s like, okay, we get in home care, which is incredibly expensive. We put them into a facility right or someone quits their job and takes care of them. 24/7 And then it was like, none of those sounded good, right? So she was living in upstate New York at the time. And we were in Arizona. And so my dad had been a real estate investor for 40 years. And I watched him in this industry, my whole life doing fix and flips and wholesales and rentals and all sorts of stuff. And, you know, he was working very hard tenants and toilets and all that drama and, you know, overworked and underpaid and all sorts of stuff going on. And we kind of fell into residential assisted living looking for an option for my grandmother. And then my dad just asked the woman who owned the home, hey, is this for sale? And she was like, Yeah, I’ll sell it to you, because he saw the numbers and he’s like, Can I’m gonna pay five grand for my mom to live here, or I can cashflow 10 grand by owning this home and my mom could live for free. So he purchased a real estate business from her no experience. I was working at Disney than working with the airlines and I saw what he was doing. And I was like, What is going on here like I was always interested in what he did. But this really piqued my interest because he sold everything else he did double down on Ral got super involved and just I kind of just kept sneaking in, like Teach me more I want to learn I want to learn. So 10 years ago, I started working with him on this. And it has been a whirlwind ever since. But I’ve loved every minute of it.

Bonnie Galam 6:22
First of all, if I ever changed my podcast title, again, longtime listeners know this used to be the good bones podcast. Now it’s House of Horrors. If I ever change it again, it’s going to be toilets and tenants. That was hysterical. Because it just hits the nail on the head of particularly when I call us like small time landlords, people who are owning, you know, I’ll say 200 doors or less. Yeah, they’re self managing in a lot of cases. That is like what we deal with. But I am so fascinated because so many of my listeners are also house hackers, and you just described a senior living house hack, and my mind is blown, because that’s so brilliant. I love that your dad took his investing like mind and put that elsewhere. I’ve I personally have done that with an office, I’ve office hacked free office space, I have, you know, several clients who have done that as well, and whether like a mixed use or straight up commercial space, but I have never heard of assisted living house hack. And I think that is brilliant, because you hit the nail on the head, I think you’re probably under estimating. And I know you’re going by numbers, you know, 1015 years ago, but up here in you know, the greater New York City greater Philadelphia area, like assisted living outside of the home is easily like 10 grand a month. Now. And so to be able to save that amount of money, but then also be able to have grandmama in that case, be able to preserve the wealth for the next generation rather than squandering it all to be able to pay for you know, her, I’ll say end of life care. We’re not talking hospice necessarily, but like, probably where she spent the final few years of her life to be paid for that, because that happens to so many families.

Isabelle Guarino-Smith 7:59
Oh, everybody, that’s what we like, jokingly but very much not jokingly say, I guarantee you’re going to get involved in this industry one way or another. You’re either going to be lying in the bed, writing the check for yourself or for someone else. Or you could be owning the real estate and business, cash flowing, living for free having your loved ones live for free. So it’s like you’re gonna get involved, whether it’s you your mom, your grandma grandpa’s somehow senior housing will touch all of our lives at some point.

Bonnie Galam 8:28
So how are you seeing this in terms of market saturation right now?

Isabelle Guarino-Smith 8:32
Great question. So because like we were talking about at the beginning, the baby boomers, right, they’re still like 10 years out from just starting to need this, right? The oldest baby boomers are only like 75, and your average residents 85 or older. So they’re not even in assisted living yet. And there’s 47 million in the silent generation who is currently in assisted living. And we’re right now 1.3 million beds short. And yet in 10 years, there’s 76 76 million baby boomers who are set to come and need this. So sir, in markets like Arizona, where I am or Florida, there’s a lot of opportunity, right? There’s thousands of these homes in one county here. So there’s a lot of competition, but the numbers that are set to come astronomical, we’re not going to be able to build beds fast enough. So it’s about how you can separate yourself how you can be the best of the best and market yourself that way to get those top residents.

Bonnie Galam 9:32
Now the people who are building or purchasing these types of let’s go with building a little bit because I think the the question I have to ask, leans more towards that direction, versus purchasing like an existing facility. Yeah. How are you seeing people financing this? Are banks eager to finance it? Are you seeing more type of like syndication, crowdfunding type of things or a combination?

Isabelle Guarino-Smith 10:00
Yeah, I see a lot of syndication a lot of SBA, and a lot of private money,

Bonnie Galam 10:06
I would see SBA, I would think, especially on the purchases,

Isabelle Guarino-Smith 10:09
yep. A lot of our students use SBA and in our trainings, we kind of hooked them up with some really good SBA lenders, but that they’re very, very friendly to this type of business. And then as well as syndication, you know, there’s a lot of people who are getting like 0% on their money, who if you offered them an opportunity to make some money, they’d be willing to, you know, I think, especially on social media, a lot of people like in my comments and stuff will be like, Yeah, but how do you fund this? Or I want to have to spend all my money. And it’s like, no, you don’t, I literally travel all across the country sharing on this. And every single day, I’m at an event, a booth or speaking engagement, someone, at least one person comes up to me and says, I’m an accredited investor, I want to work with your students who know what they’re doing who you know, are going to be successful in this. Don’t share my contact with everyone, but share it with the best of the best. Like, people want an opportunity that people who have money need opportunities, they need investors and entrepreneurs to get deals in front of them. So I think a lot of times the mindset has to be switched and like, no one’s gonna give me money on this too. Like, no, there’s a lot of money out there abundance mindset, but you’re so how do I go find out? And it comes to you, you know?

Bonnie Galam 11:22
Totally. Because it’s one of those areas. It’s like I had a few months ago on someone who does wedding venues as like a real estate investing strategy. And it reminds me of that, in the sense is like, is it a business first? Or is it real estate first? And I’m curious, like, which way do you look at it? Do you see the real estate purchase? Or do you see the business model? First,

Isabelle Guarino-Smith 11:40
I think we’re the real estate first, because you have to choose kind of which of those four routes you want to get started buying an existing converting a single family home into one building custom from the ground up or leasing. So working with a landlord who’s going to renovate it and retrofit it, and you’ll lease it from them. So the real estate is kind of that first part, then building an operating the business comes next.

Bonnie Galam 12:05
Do you find out most of your students are I’ll say self operating? Are they hiring out a separate like third party contractor who is doing the operations.

Isabelle Guarino-Smith 12:14
So it’s not necessarily like a third party operator, but everyone will hire a licensed administrator. So in real estate world, it’s kind of a project manager, property manager, sorry, but it’s not exactly because it’s a medical license, right, like their license to care for the caregivers and stuff like that. But they would be in charge of marketing, touring the homes with the families, hiring and firing your caregivers, your contractors, doing shift work, potentially payroll, the intake with the residents. I mean, they’re really doing it all. It’s not like, it kind of is a third party contractor. But it’s like, that’s who you hire to then run all the day to day. So you are just owning the real estate and the business and being more hands off.

Bonnie Galam 12:58
Right? And there’s probably a lot of legwork to get it up and running, getting that person set up. Yeah. And then from there, it’s probably a lot more hands off, right?

Isabelle Guarino-Smith 13:06
Yep, way more work in the beginning. Once you get it steady and solid, you can start kind of backing away. And that’s how most of our students because they come from the real estate world. They’re like, I’m not trying to find myself a job. I don’t want to be failing.

Bonnie Galam 13:18
I’m not looking to be running like actually, you know, an assisted living home? No. So they want to know how many hours a week would you say that people once it’s like up and running, are spending on these businesses? Like is this something where you could own 10 of them?

Isabelle Guarino-Smith 13:35
Yeah, one of our most successful students, he owns 25 of them out in Colorado. So depending on how you set it up, like I have students who they were RNs, or doctors or whatever, and they love to be in their home all the time, like they want to go be there, and they choose to be there. So you can choose to do that, right? The way I run it is extremely passively. I have one phone call a week with my manager and I visit the home every other month. That’s because I want to set it up that way. So really anything in between that from being in the home every day to setting it up passively. It’s really truly how you said it.

Bonnie Galam 14:19
And also, I’m willing to pay more to people that I’m not going to have to be thereon that team as well.

Isabelle Guarino-Smith 14:24
Anything I can delegate I’d like to other people are like oh, I’d rather make that extra five grand and I’ll do that job. And I’m like, Oh, so it’s it’s that’s why it’s tough. I hate the answer. It depends, but like it does, it’s what you want and how you want to set it up.

Bonnie Galam 14:35
I love the answer. It depends. I give it to people all the time. I think that’s like when you graduated law school, they’re like, here’s your law degree. Here’s the answer you will give to everyone for the rest of your life. It depends. And you will forever like frustrate people at cocktail parties or wherever when you give any answers. And so now that we’ve covered like the you know, the rainbow rainbows and unicorn part of residential so So living, like, let’s talk about, like some of the messier parts of it and like not like what probably people are thinking about messiness. But like it as a business, it probably has like red flags to look out for bumps in the road, or even just like situations that you would probably prefer to never repeat again.

Isabelle Guarino-Smith 15:18
Yeah, definitely the immediate things that come to my mind is so many people’s concern about getting into this industry is liability, angry neighbors, and like what happens when a senior dies? So let’s jump into them. Right?

Bonnie Galam 15:32
Yeah, let’s do it.

Isabelle Guarino-Smith 15:34
Liability, I feel like people are very, very concerned about what happens the risk involved, right? When you have a residential assisted living home, it’s typically a four to one or five to one resident to caregiver ratio. In a big box facility, it’s typically 15 to one or 25 to one, sometimes at night, upwards of 30 to 150. To one, there’s no way one human being can take care of 50 people, even 15 people, that’s like insane, right? So the risk over there is a lot greater because of the lack of care the lack of hands on for us, we’re trying to eliminate that risk as much as possible by making the House senior safe and friendly. Having higher resident caregiver ratios, having your liability insurance set up and ready to go. And eliminating anything that could be a trip hazard, a fall hazard, you know, all these different things, right? So there is risk. That’s why these are licensed homes. That’s why they’re doing background checks on people. That’s why you have cameras in the home and you need someone watching it 24/7. To me, the reward outweighs the risk. But yeah, there. There’s no if ands or buts about it. There’s risk, you get your insurance, you do what you can to protect yourself. I’ve never been sued. None of our 1000s of students knock on wood have ever been sued. But it’s happening. And so you know, it happens all the time something, you know, someone’s mistreated, something happens. So what are you going to do in that situation? It could shut you down, it could ruin you. Like I said, Thank God, it’s never happened to me, because I’m trying to implement all those things, to not have it happen. But it cooks, I’ve heard of it happening with other people. So I don’t know that that is something that I know is a big risk and like a horror thing when people think about this industry, the liability?

Bonnie Galam 17:25
Oh, yeah, I mean, I think about that. I mean, I know the lawyers, you know, the people who are like nursing home abuse, Does Grandma mom have bed sores all over her heart is there neglect taking place, and there definitely those situations, but like you said, I think in such set setups, really where there’s less risk for neglect, or forgetfulness or any of that to happen, then, you know, you’re reducing that, but you touched on something that I think is really important, it kind of just keys in something that I talk about a lot, which is offensive acid production, you want to be just setting yourself up to avoid these problems from happening in the first place, and then cover your butt with some really hefty insurance on the back end. And that doesn’t cover everything, but it’ll cover a lot of particularly the catastrophic stuff. Well, that’s, you know, prevent employer disputes, know, like, if you’ve got like your director in there, and she’s discriminating against everybody, you probably got a problem on your hands. But there’s a lot of things like you know, the slip and falls, you do your best to prevent that things not just because you want to avoid a liability, because you want to have a good functioning business for the long term that you know, everyone tells their buddies and all their bingo players that they all want to come live with you. And that creates not just a sustainable business model, but one that is also more secure. So I love that you framed it that way. Now let’s talk about the neighbors.

Isabelle Guarino-Smith 18:47
Neighbor. So a lot of people because this is, you know, a business in a single family neighborhood, you’re always going to have an angry neighbor who we’ve heard the most wild things like there’s going to be naked people running down the street. I’m like, these seniors can’t run they can’t get out of bed. What are you talking about? But the people have the most wild ideas of what this is going to bring to their neighborhood ambulances every single day, hundreds of cars out front drama, and it’s like, okay, reality check. These homes have someone awake on staff 24/7. So this to me, it’s one of the best neighbors you could ever have. You go out of town, they’re bringing your trash can in and out. You’ve got Neighborhood Watch all day long, all hours of the night, right? Some of these caregivers dependent, yes, there’s going to be cars because the caregivers have to drive and there will be cars. So you want to make sure you have adequate parking to house the people who are coming and going. The seniors aren’t driving so they don’t have cars. It’s mostly the caregivers but my personal neighborhood. My neighbors got three kids who are in their teens, him his wife have cars, they have three cars, there’s five cars out front there, it’s ugly. But if this was a Ral home, it’d be ugly too. It is what it is. Right. I’m not gonna say your kids can’t drive they can have cars. So why would you say that about the caregivers who are coming over? The thing with angry neighbors, they’re worried that it’s going to be like a hospital, they’re worried about ambulances, they’re worried about traffic or what’s going to happen within the home. Really, truly, there’s not that much traffic, ambulances. To me, this is a wild concern, because if it was just one senior living next door to you, and they fell, well, who do you think is going to come? The ambulance? So if there’s five or 10 seniors living next to you, and one of them falls? Who do you think is going to come? Do you not want them to be safe? Like, that is just to me insane. I also think, if you had a loved one, like I was explaining with my grandmother, wouldn’t you want them to live two doors down from you. So you can walk over and say hi, every day, I don’t want them to live 45 minutes down the road, you know, in some big box facility, I like the opportunity that’s in a residential neighborhood. So I think angry neighbors will definitely try to stop you from doing this in a residential home. It could be an HOA, a city, a state, county and an angry neighbor, it doesn’t really matter because of the Federal Fair Housing Act, it’s technically discriminatory against disabled people to say that you cannot have one of these homes in a neighborhood. So we do have lawyers, like you were describing, you know, who will fight for our students and our clients who are trying to open these homes and they have someone you know, right raising opposition against it. We have a team who can help them work through that. But it doesn’t mean it’s not going to happen. It’s going to happen, someone’s going to be upset that you’re doing this. And it’s mostly because of lack of education, lack of knowledge, and really no insight on what this truly is and what value you’re bringing to the community and even the neighborhood.

Bonnie Galam 21:49
Yeah, I mean, me as I think it’s something that gets pitted against a lot of different areas of real estate investing. People don’t want multifamily housing. People don’t want you know, commercial near their house, but they want every you know that they do and they don’t everything is like yes, but not in my backyard. And so I’m not surprised to hear that that is something that pops up frequently. And a question I had had, because I see you sometimes this lingo be used, I will say interchangeably, but I think the waters a little bit muddy is around like halfway houses and release houses. And I’m wondering like when you say something is like, residential living are people thinking like you’re putting like a rehab type of facility in the neighborhood? Which that’s a whole conversation for another day. I mean, I think, you know, obviously, we want to be treated addicts in our communities as well. But I’m wondering like, Has that ever happened where people just like, things are fighting against something that it’s just not even that thing to begin with?

Isabelle Guarino-Smith 22:46
When 100% So group homes, consider it categorized for recovery, clean and sober, those who’ve been justice involved, developmentally disabled adults, veterans, home senior homes, so of all those categories, SR homes are probably one of the least dramatic and most beneficial for the community. But yes, we still need all of those types of homes, it’s still discriminatory to say you can’t do one of those homes. So they’re all protected as well. But 100% people categorize us all together in the group home category and say, I don’t want you know, all these people sitting out front smoking and sketchy people around the neighborhood at night and all this and I get it. You know, we it’s very, very different. Like I said, I really feel these are a benefit to the community and neighborhood. And we’ve had stories of angry neighbors who were like fighting tooth and nail, like, do not let this home, you’re putting up flyers all around the neighborhood, this is going to be chaos. And now they have their seniors living in the home. Oh my god, they have their own parents even though because it’s just like, we have to disarm and educate like a lot of people just aren’t educated on what’s happening and what it really is. But yes, big confusion on mixing up those types of homes.

Bonnie Galam 24:09
I was wondering that because I had there was a fight recently in a local town for us where people were flipping out, you know, and all the local Facebook groups saying I get in there like, it’s not even what you’re talking about, Bro, did you read the article? I mean, it’s some of it I think just comes down to like an article may say like, you know, application put in for a group home in this neighborhood. And then no one reads the fine print to see like, what kind is it I mean, again, there may be a scale of like, what your preference may be to have, you know, in certain particular neighborhoods that I suppose they all have their pros and their cons as to who you’d want to have as your neighbor. But I just find it very interesting as and something that I’ve seen kind of spiral with like the advent of like, particularly like these neighborhood Facebook groups at And what’s that website where it’s like the neighborhood one anyway,

Isabelle Guarino-Smith 25:03
where they all talk, there’s never the app to-

Bonnie Galam 25:07
Yeah, can’t think of it for the life of me, if I think of it all included in the show notes, but it’s totally not relevant to the conversation. So if you know what it is shoot me a DM on Instagram guys at Bonnie Galam at ASQ. And tell me for the life of me, what is the name of that like neighborhood app. And I apologize if you guys are hearing some background noise during this recording, there’s someone cutting tile just outside my office door. Now, there was a horror story in particular that I wanted you to share with me about, you know, a situation involving removing a resident from a home and I think for those of us who are in the more traditional long term, even medium term, rental space, we think okay, that’s an eviction, but I don’t evictions are not the same when you’re dealing with residential assisted living in the senior space, of course, senior assisted living. So tell me a little bit about like this situation that happened and like how it shook out?

Isabelle Guarino-Smith 26:01
Yeah, that’s a great story. So it’s one of the only stories that I have of a resident who we had to ask to leave. So because it’s not a tenant landlord relationship, there is no eviction moratorium, there’s no eviction, we don’t use that word at all. They’re signing a residency care plan when they come in, not a tenant landlord agreement, right. So the residency care plan is basically they sign it and their family signs it. And it says that they’re going to oblige by by these specific rules, as well as this is the behavior they’re agreeing to. And this is the quality and the care that we’re agreeing we will give when it goes beyond this, we can no longer suit your needs, we can no longer service you. So there’s many reasons and ways out in those contracts. Basically, they don’t abide by it. The family doesn’t oblige, why or we can no longer service you. There’s a lot of different ways we can kind of get out of this. Now, I would never put a resident on the street. There are homes that are less expensive. There are homes that accept government funding, there are other homes nearby that may be totally fine to service that family or that seniors so you’ll never just be like, Screw you, you’re out? Absolutely not. You’re typically helping them find another place to live, mind you, you can get paid when you put them in another place to live because of like referral fees basically. So you can get paid on their exit as well. But you’re always going to make sure that they’re set up to go somewhere, you know better on that regard. The story of the family, so only resident in 10 years with three homes that we have ever had to remove was not due to the resident, it was due to the family. So the family with the resident was such a sweetie. He was like such a little sweet guy, no issues with him. The family would come over like 12 of them. Tell the chef get out. We’re cooking kick kick the chef out, mind you, I’m paying for him to be there to feed the residents. They take over the kitchen start blasting music, screaming obscenities, vulgar, vulgar words like it was like, what is happening here? Why do there’s nine other seniors other than their loved one living in the home? So they’re totally disrupting the Zen the piece everything that’s going on? The caregivers call the manager like, what do we do? You know, like what’s going on here? First of all, they’re not supposed to be cooking without a food handlers license. If they want to bring food over and feed their one senior, totally fine. But like cooking in our kitchen, like a commercial kitchen.

Bonnie Galam 28:36
Yeah, there’s special rules for that. Yeah, no, you can’t do that.

Isabelle Guarino-Smith 28:40
And so the manager came in, she’s like, Hey, you guys gonna have to leave I’m totally fine. If you want to come over and hang out with your loved one, no issue there. You can’t kick out the chef. And I can’t have your cooking here in the kitchen. So you know, let’s pack it up and move on and make it happen. So they okay whatever kind of give her some some bite but leave. A couple of weeks later, they come back into the exact same thing. Kick out the chef screaming and cussing loud music. I mean, these homes when you walk in there, like peaceful then they’re usually like old timey music, you know, it’s like very calm and serene. And it was like, it was like what is happening here? And so the poor little senior like we loved him no issue with him, but it was like, hey, second strike. You guys have to get out of here. We told you know, and then they fought tooth and nail about it. Like we’re staying you know, you can’t kick us out. And it’s like, it’s all here on the contract. Lo and behold, the next day they come get all his belongings and and they were out. But it that’s the only time we’ve ever had to do it. And it was truly just because the family wasn’t following the plan. Like they weren’t following what they had agreed to. And so it’s it’s pretty clean cut, but it still wasn’t fun or nice because the senior he didn’t do anything wrong. We felt bad for him.

Bonnie Galam 29:56
So I’m wondering what you would have had to have done I don’t know if you got us As far as like talking with an attorney about this, but like what if they like straight up didn’t leave? Like, you’re obviously not gonna like take this guy and throw them on the street? Like you said, like, would there have been some sort of judicial process like the one I’m thinking of in my head is like the process you would use for, like a squatter, versus a tenant who has rights, or you would use like an ejectment type of process.

Isabelle Guarino-Smith 30:18
My assumption would be that whoever their point of decision making at that point, right, if p of P of A, it’s yeah, I, my assumption would be that you’d be working with them, and then you would get legal action involved. For the most part, like I said, once you kind of get, like kicked out, like people are like, embarrassed. And so they’re like, we’re out of here, you know, it’s not like, Oh, we’re gonna leave him here. Because now then they’re worried what are they going to do to him? They’ve already kicked us out. They don’t want to lose their loved one. They’re thinking, what are they going to do to him? If we leave him there? This is someone’s like, life involved. It’s not just a home. It’s like their care.

Bonnie Galam 31:06
So they might also medical care involved in that they might have worries about are they going to, if we’re not paying?

Isabelle Guarino-Smith 31:08
Or if we’re not allowed to be here anymore? Are they going to stop caring for him? Now he’s going to, you know, be mistreated or something like that, we would never do that. But I must, my assumption will be that’s the family’s thought. And that’s why they’re quick to move to typically. But yeah, you just get legal involved. All of our contracts are legal contracts. So when they’re signing it, they’re pretty much signing away all of their rights, to be able to squat to be able to say you can’t kick me out. None of that exists. They signed away everything, which I know, everyone does in tenant landlord agreements as well. But it’s a little bit different, because this is a care plan. You know, it’s about the medical requirements that we’re able to service them with. It’s not just a physical home.

Bonnie Galam 31:57
Now, beyond the rare occasion, we’ll say where people have to be kicked out of the residential assisted living home. Can I call them Raul’s? Guys, I feel like Oreo. Yeah. All right, yeah. So I imagine the two most other common ways that people are leaving is one, like, they just get better or go to, you know, they heal their hip, and they’re able to move back home, or a situation where they unfortunately pass away. I imagine those are the two scenarios where like, they get well enough that they’re able to move back in with either at their own home or with a family member or they pass away or they go on to some sort of hospice care. And so I in my head when you said the death was one of the things that people fear in my head from a legal standpoint, I’m like, that’s probably the easiest to take. But I would love to hear your perspective on it.

Isabelle Guarino-Smith 32:49
So no one ever no one that I’ve ever seen has left because they’ve gotten better. Okay, this is definitely end of life. So they’re either being moved to a nursing home because they need medical attention. They need doctors IVs, gurneys, nurses, you know, with them 24/7 Or they’re passing on, or they’re moving to a different home that’s more suitable, like the kicked out situation. Right, right. So but I would say 90% of people do pass in the home. Some of the people do end up on hospice, during their last couple years of life. We had a woman who was on hospice for seven years in our home, hospice doesn’t necessarily mean you’re going the next day, it just means you’re deemed This is the end of life, which hospice is incredible, because it doesn’t cost the family anything, it doesn’t cost us as the homeowners anything. And there’s someone who comes in to care for that senior one on one every single day. So it’s an incredible thing. And we are totally fine if people are on hospice within the home. But most people live in an assisted living home for three and a half years. And they’re also not moving in for funsies. They’re moving in because they literally need 24/7 care, they can’t get up out of bed, they can’t walk, they can’t bade they can’t go to the bathroom. Sometimes they can’t feed themselves. Maybe they have dementia, memory issues, Alzheimer’s. So this is like totally end of life care. That’s what this is. So usually, you know, average three and a half years, some people more some people less, but most of the time they are passing on. The reason I said it’s kind of a fear that people have and I agree with you to me. It’s normal, but it’s because I’m in this industry. But it’s a fear people have because they think like what what happens is the family pissed at me like it like am I gonna get sued because someone dies? And it’s like, no, we 95 year old grandmas living in an assisted living home. The family is well aware. This is the last couple years of life, you know, so also considering how much they’re paying every single month to have her live in that home. This might sound a little crass of me but you’d be shocked at how many families feel a sense of it. relief, because that’s usually their inheritance dwindling down every single month going away in a way, in a way, when mom or dad passes, it’s like, Okay, I just now don’t have to pay 510 $1,000 a month for their care, it’s really shocking how much relief it gives to the family. This, their senior isn’t who they once were, for any of us who’ve ever had a loved one die, you know, you know that at some point, you’re looking in their eyes, and you’re like, you’re not who you were, this, this isn’t healthy for you, this isn’t happy for you, I want you to be relieved and to move on, you know, it will help me it will help you like let’s, you know, let’s get there. So I think it’s kind of a non issue. But I do know, it scares people when they haven’t been in this industry. And they don’t understand that. But it’s the reality of life, they’re not moving in for fun, they’re moving in because they have to. And that’s, that’s pretty much the main way that they exit the home.

Bonnie Galam 35:56
That’s really, you know, interesting to hear that. And perhaps it’s just my lack of knowledge around the demographic who is entering these orielles. But one of the things that, you know, came to my mind as like an additional horror story is, and we touched on it right at the beginning, but you brought it up just now is the cost of these. And I couldn’t, couldn’t let this episode go on. Without mentioning to people, I don’t know how many of my listeners are in say, like their 70s or so. But that is the time to be planning. Well, there’s really two big times to be planning for your long term care. One is probably in your late 40s, early 50s, if you’re looking to take out any sort of remotely affordable insurance policy for long term care, but the other is around your I’d say early 70s. Not only should you have had your estate plan done for many, many years at this point. But if you are looking to do some sort of Medicaid, or asset protection trust to start moving assets away, that way, you can get government benefits quicker, essentially, to pay for your long term care whether it’s in an Ral or you know, a different type of facility, then there’s kind of two windows of opportunity to be doing that. And if you have a relative who is approaching those timeframes, you should be having those conversations with them as well. Because, yes, these are, you know, valuable, and also profitable businesses, if we can, you know, make that payment without having it to be squandered. You know, it’s to the point where they will put you know, Medicaid will put liens on your houses, they will take every penny out of your bank account. I mean, it’s something to the point right now, where if you’ve have like, they will take it to have like $15,000 left in your bank account, it is basically to your penny penniless. And so don’t forget to have that conversation if you have loved ones around that age. And they’re not gonna want to hear that conversation. But it’s worth one to have. Now, I’m curious, you know, just from your perspective, what do you you know, how are most of your clients residents paying for their care? The I know, you said you don’t accept Medicaid correct, or Medigap,

Isabelle Guarino-Smith 38:06
we try not to do anything in that regard. But I will say just seniors in general, how they’re paying for their care is Medicare, Medicaid, VA benefits, long term care insurance, like you just mentioned, and then using their cash, IRAs, you know, investments, selling their properties that they own, and using that money to pay for it. And you’d be shocked at what you just said, how many people are relying on their adult children to pay for this in their last years of life? And if it’s us average rate right now is $4,500 a month per person, and you’re going to need it for three and a half years. And you have two parents who are alive and maybe two in laws who are alive and you’re the one who’s doing well.

Bonnie Galam 38:46
You better start getting prepared. Because yeah, it’s a conversation in college. Yeah.

Isabelle Guarino-Smith 38:51
It’s a conversation to be had, like you were saying, like, I always tell people that I’m like, if you don’t have a plan, consider opening one of these if only for your family and then to cashflow in the meantime, it could be your own plan for your future to not leave your kids a burden. But in general it’s going to cost a pretty penny and if your family doesn’t have a plan and you’re the wealthy one guess who they’re looking at…

Bonnie Galam 39:14
Yeah, that’s one of those things you know, that I think this country has left on the table is the way that we treat the elderly and are also the most elderly of our you know, our communities and you know, thankfully there are private you know, groups private businesses who are stepping in to fill that gap but it that doesn’t come for free. In some countries this stuff is free it is very much the opposite of free in this country and you gotta gotta gotta gotta plan for it because there is no like alternative it costs you money no matter how you look at it, whether you are going into an Ral whether going to a nursing home, whether they are you know, someone’s quitting their job to move in with you. Like that all costs us money. And so figuring out what that looks like, for yourself or your family members as early as possible, I think is this an important wake up call for a lot of us that no amount of, you know, estate planning, like, can prevent this stuff from happening, but you can definitely eat or, you know, minimize some of the the financial damage it can cause–

Isabelle Guarino-Smith 40:22
100%, like I said, I guarantee you’re gonna get involved.

Bonnie Galam 40:27
So that there, you know, it was funny, when I, when I started my law firm, I was doing a bit of estate planning, and I would tell people that I, you know, I saw through my grandfather’s, they both unfortunately passed away from each other passed away with within a week of each other. And one of them had a very detailed estate plan, they had been working with estate planning attorneys for years, and one of them had no plan. And one of them passed away very, very quickly, it was, you know, he got sick, within a month he had passed away, and then the other one was sick, and then was in the hospital for weeks and months. And it was, it was very prolonged. And frankly, it’s the type of care that he had. And, you know, I would much just like you think back on to your old grandmother, I would often think back to my own family’s experience. And the reality is, is like, no matter how much you plan, like you, you just never know, what’s gonna shake out. And I, you know, I often, you know, hear people say, especially, you know, like my parents or my in laws me, like, you’re never gonna put me in a nursing home. And I’m like, Well, we have a plan to pay for this is like always my first response. But I also think these are rails that are popping up, more and more so are a really kind of attractive, medium option for a lot of families. And so I’m thankful that you know, you were able to come on my show this week to talk about them to shed a little bit of light onto like, the role that they play, the things to look out for. And also a harsh word of that, like, wasn’t too horrible. Like, I think probably going into this episode, our listeners were had their mind spinning of like, how bad can this get? But it’s, it’s been an absolute pleasure speaking with you, Isabelle. Before we head off, I know, you work with investors in a few different ways. If you want to chat about that briefly, I’ll absolutely include I know you have a three day fast track training event that’s coming up include that in the show notes.

Isabelle Guarino-Smith 42:28
Yeah, so we do 3d educational courses in Phoenix, Arizona, every like six to eight weeks or so. I believe the link to find out more information on that is our A L three day.com. But also, if you just some free info if you just want like a free book free webinar. And just to kind of gain some insight Ral one Oh, one.com is a great place to really just dive deep and get started seeing if this is the right fit in industry for you. Because, you know, I always want to encourage people to do as much research as they can listening to shows like this are an incredible way to you know, get shiny Penny syndrome. And so it’s like, do your research, decide if it’s right for you. And if it is, I hope to see you in class, but if not just get to research so at least you know what’s ahead. I love that.

Bonnie Galam 43:15
Thank you so much as well for coming and I will be sure to include all of those resources that you just mentioned in the show notes guys. Thanks so much for listening to the House of Horrors podcast. Make sure to follow us on Apple podcast Spotify or wherever you like to listen to podcasts. You can also check out all of our podcasts episodes, show notes, links and more at Bonnie galam.com forward slash podcast. You can learn more about legally protecting your portfolio and take my free legal workshop the three legal myths preventing you from securing and scaling your portfolio and of course what to do instead at Bonnie galam.com. And to stay connected and follow along follow me on Instagram at Bonnie Galam ASQ and send me a DM to say hi gosh guys, wasn’t that a really fun episode? I am now itching to go to Arizona where Isabel hosts her workshops and yes, maybe I’ll get some national parks while I’m there. I haven’t been out west since oh gosh, I think I was in middle school. But I just I really fascinated by this asset class. And if you want to connect with Isabelle yourself, you can check out the show notes at Bonnie galam.com forward slash 66 where she gave me the whole litany of everything you guys need to get in contact with her. And if you enjoyed this conversation with Isabel please leave the show a five star review on Apple podcasts. It really does help other investors find the show as well. Plus it makes my day and make sure you’re subscribed so you don’t miss any of the future episodes won’t be bringing to you over here. Next week. I’m joined by James lead better with a conversation about a partnership he got into with a realtor that went really off the rails and lost him a lot of money. So make sure you’re subscribed and i’ll see you here same time, same place next week.


Learn:


Connect:

Join my Free Legal Workshop


DISCLAIMER: Although Bonnie is an attorney, she doesn’t give legal advice without a written and dually signed engagement agreement. All episodes of House of Horrors are educational and informational only. The information discussed here isn’t legal advice and isn’t intended to be. The information you listen to here isn’t a substitute for seeking legal advice from your own attorney. 

© 2021-2022 Bonnie Galam LLC | All rights reserved | Any use of this intellectual property owned by Bonnie Galam LLC may not be used in connection with the sale or distribution of any content (free of paid, written or verbal), produce, and/or service by you without prior written consent from Bonnie Galam LLC.

AFFILIATE LINKS: Some of the links we share here may be affiliate links, which means we may make a small financial reward for referring you, without any cost difference to you. You’re not obligated to use these links, but it does help us share free resources like this podcast. Thank you for supporting us!

+ show Comments

- Hide Comments

add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Thank you for your comment!

so hot right now

I'll help you increase your bottom line, so you can have more money to invest.... or just do whatever you want

I'm a real estate attorney, self-managing landlord, generational wealth evangelist, self-education obsessed course creator, automation avenger, book worm, Sixers fan, and momma to two tiny hummusapiens. 

I believe that time is the most valuable currency, but money is a close second. I fight against the bad rap landlords get while still pushing the industry to improve. 

more about me

long story short

3 Steps to Create More Cashflow & Reduce Legal Headaches

join the free training

Free workshop

Helping you build a solid foundation for your rentals every week on Good Bones 

Listen

Podcast

Let's Level Up

Check yourself before you wreck yourself

3 actionable checklists so you can legally onboard new tenants, add new properties, and run through your existing asset protection plan (or lack there of!) 

Free guide

Ultimate Legal Checklist

Download the ultimate legal checklist now!

    This is not a law firm. Nothing on this site should be construed as legal advice. Bonnie does not provide you or your company legal advice. We simply provide legal information and education for you to customize and use on your own and have reviewed by your own local attorney. Bonnie is an attorney licensed in NJ and PA, but is not practicing law or establishing an attorney-client relationship with you, ever through Bonnie Galam LLC. Some states may consider this attorney advertising (although it isn't intended to be). Thank you!

    This is not a law firm. Nothing on this site should be construed as legal advice. Bonnie does not provide you or your company legal advice. We simply provide legal information and education for you to customize and use on your own and have reviewed by your own local attorney. Bonnie is an attorney licensed in NJ and PA, but is not practicing law or establishing an attorney-client relationship with you, ever through Bonnie Galam LLC. Some states may consider this attorney advertising (although it isn't intended to be). Thank you!

    Bonnie Galam LLC

    © 2020-2022 BONNIE GALAM LLC

    giving back
    Disclaimer
    Terms
    Privacy policy
    Sustainability
    blog
    About

    SEND ME A NOTE >

    student login>

    @bonniegalam >

    follow along 
    on Instagram: