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Sept. 18, 2022

123. Residential Assisted Living with Isabelle Guarino-Smith

123. Residential Assisted Living with Isabelle Guarino-Smith

Join Mike Cavaggioni with Isabelle Guarino-Smith on the 123rd episode of the Average Joe Finances Podcast. Isabelle shares how she keeps her father’s legacy alive by helping others understand the need for Residential Assisted Living. She also explains how this type of business can benefit the residence, employees, investors and business owners from an investment point of view.

In this episode, you’ll learn:

  • Why you should consider Residential Assisted Living as a Real Estate Investment
  • How residential assisted living academy helped investors and buyers understand the RAL business.
  • Why NOW is the BEST time for Senior Housing.
  • How to cash flow properties in today’s competitive market.
  • And so much more!

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.

Find  Isabelle Guarino-Smith on:
Website: https://residentialassistedlivingacademy.com/
Twitter: https://twitter.com/ralacademy
Facebook: https://www.facebook.com/ResidentialAssistedLivingAcademy/
Instagram: https://www.instagram.com/ralacademy/
LinkedIn: https://www.linkedin.com/company/residential-assisted-living-academy
Youtube: https://www.youtube.com/c/residentialassistedlivingacademy
Tiktok: https://www.tiktok.com/@ral.academy

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Transcript
Average Joe Finances:

Hey everybody. Welcome back to the Average Joe Finances Podcast, I'm your host, Mike Cavaggioni and today's guest is Isabelle Guarino-Smith. So Isabelle really excited to have you on this. We've scheduled this a while back and I'm glad that we're here to have this conversation today to talk about some residential assisted living facilities this is pretty exciting stuff. It might not sound like it right off the bat, but when it comes to people investing, this is an exciting thing to talk about. So I'm really excited to get into it and share your story today. So thanks for joining me. So happy to be here.

Isabelle Guarino-Smith:

Thanks for having me.

Average Joe Finances:

All right. Fantastic. So speaking of your story, the first question I'd like to ask you is the same question I ask everybody that comes on and that's it. What's your story? So if you could share with us, how you got started and why residential assisted living?

Isabelle Guarino-Smith:

Yeah. For me, it was honestly very close to home. My grandmother fell, she broke her hip, she needed 24/7 care, and she was living in upstate New York. And my dad and all his siblings were like, what are we gonna do? Who's gonna quit their job and take care of mom full time or grandma for me. And so they were searching and searching for an assisted living place that was suitable for her. They really found nothing like nowhere that they wanna leave their goldfish, let alone their beloved mother. So my dad went back to Arizona, which is where we were living at the time and said, Hey, there's a lot of old people here, there's gotta be something, right? More suitable here. So he was hunting and stumbled into residential assisted living, which is really just a single family home being used for seniors who need help with activities of daily living. So he purchased the real estate and the business being the real estate investor and entrepreneur that he was, and jumped all in and said, mom's not just gonna live here. I'm gonna own the whole thing, I'm gonna do the whole thing. And over the course of the next couple years, we saw what he was doing and he went from being like a landlord of all of these properties. Let's be real, kind of being cranky, dealing with lots of tenants and toilets and drama to being like this super softy who was loving, hanging out with these grandmas at his little assisted living home and we were like, what are you doing, dad? What's going on? We all slowly over the course of the next couple years, asked him. Can I help? Can I be a part of this? So over the next couple years, I joined him one of the first of my family members to join him. And we grew the business from two people to 50 people and built eight businesses over the last couple years. My dad passed in October so I've taken over everything from him since then, but I really got involved because my grandmother needed this. My dad jumped in and then I just followed suit after that and I've been super in love with this industry ever since.

Average Joe Finances:

Wow. What a story and what a way to get started and start off sorry for your loss. Especially so recently. But wow. There has to be a before, so now you said that your dad was, he was always dealing with the tenants and toilets, that the teas that everybody gets tired of dealing with, that you had that extra tea to it. And so was he already investing in real estate separately from this before he got in involved?

Isabelle Guarino-Smith:

Yep. Since he was 18 years old, he purchased his first piece of real estate and had been a real estate investor, his entire life and entrepreneur, his entire life started 40 businesses. And was just, that was his stick, was always real estate investing and just going in hard on that. So I grew up with seeing that entrepreneurial side to him. After college I became a flight attendant and was loving the travel aspect, but not loving the pay. And so once I saw that my dad was super happy and cash flowing really well, it became very enticing to want to peek into what he was doing there.

Average Joe Finances:

Okay, awesome. Yeah. I was gonna ask you so what was the before, like what were you doing before you got involved in this okay, so you were a flight attendant. Awesome.

Isabelle Guarino-Smith:

Yeah. Traveling the world.

Average Joe Finances:

Didn't you also do something with Disney?

Isabelle Guarino-Smith:

Yes. I interned at Disney when I was in college and that was so much fun. If you are a business owner or entrepreneur, Disney is the one to look to because they just have their systems down path. It's incredible.

Average Joe Finances:

I just wanted to bring that up because I'm curious as to like where you learned some of your systems and some of the stuff that you got, so it was while you were interning at Disney. So what kind of internship did you do there?

Isabelle Guarino-Smith:

Yeah. So in college they offer like a college program basically where you can go there and work in the parks for six or nine months. Was out in Florida working there for nine months meeting people from all over the world and you work in the park and then basically on your other days, they're teaching you behind the scenes system orientation, all sorts of stuff like that, so that you can have a better grasp on the business and the operations side of that perspective.

Average Joe Finances:

That's awesome. Yeah, so I just wanted to point that out. So you were able to get some really good tools from that.

Isabelle Guarino-Smith:

Oh yeah.

Average Joe Finances:

To bring with you into what you got into next, which was doing this residential assisted living, right?

Isabelle Guarino-Smith:

Yeah.

Average Joe Finances:

Now fast forward to where you're at today, right? So you assumed all the operations from your father, but you were also doing this before that. So you, you jumped in and you were helping out there too. Now isn't there something else that you're involved in to the residential assisted living academy?

Isabelle Guarino-Smith:

Yes. So for the last eight years, I've been the COO of residential assisted living academy, that's one of our main companies and it's basically a training academy where we're teaching real estate investors and entrepreneurs how to own and operate their own RAL homes, right? So we teach you how to find it, fund it and fill it so that you can go do it on your own. Cuz it's not that fun for me to keep all the secrets to myself. I wanna share them with other people so they can go do it.

Average Joe Finances:

Okay. Awesome. So speaking of not keeping those secrets to yourself, how does somebody get involved in something like this? Like what's like the jumping off point, let's say for me, cuz I invest in multifamily real estate. So if I wanted to jump into something like this, where should I start looking?

Isabelle Guarino-Smith:

Yeah. So there's kind of four ways that you might want to get started. So we'll go through four and then, and we'll do a one on one with you. We'll find out what you want. Okay. So one, you could buy land and build a custom RL home from the ground up. A lot of people in the Midwest like to do this, or some of my contractors, right? Like a lot of our students who are contractors or have experience doing that. It's a great way to have a custom RAL home that's super suitable for seniors, it's perfect from day one. Second, you could buy a single family home and convert it to become. This is also a super popular option, you wanna think 300 to 500 square feet per person. So with 10 residents, minimum 3000 square feet, upwards of 5,000 square feet. So these are large upscale properties, right? So single family home convert it. Third, you could purchase the business and the real estate, which I mentioned is how my dad first got involved, so you're buying the business, buying the real estate you're up and running cash flowing day one, but you can't really do much to the property, you've gotta take it as is, and only minor renovations can happen from there. The fourth way you could get involved is by leasing a property to do this, right. So you don't even have to own the property, you might wanna partner with someone who's gonna purchase the property and retrofit it to become an assisted living home. They're gonna license it and you're gonna operate the business out of it, probably signing a three year, five year, eight year lease with them, right? So of those four ways to get started, they obviously range in timeframe, money frame, and then state by state. It will totally range as well, but those are the four ways you would choose to get involved.

Average Joe Finances:

Wow. Okay. That's fantastic. And what's some great nuggets to start with here. So I'm gonna go out on a limb here and say if you're lacking in the money department the best way for you to get involved would probably be the leasing one, that fourth one that you mentioned, because you're gonna be focused on running the business and partnering up with somebody that's already got the real estate.

Isabelle Guarino-Smith:

Yep. I would do, honestly, you could do either side of that coin, right? Because some of your listeners, they might be like I don't mind owning the real estate and getting twice the fair market rent from a long term, low impact tenant. Heck yeah, that sounds great. They can retrofit a property. They might be used to that if they're doing fixed and flips or anything of that nature. So you could be on that side where you just own the real estate and you're leasing it to an operator or you're coming to our training and learning more and maybe you wanna do the other side where you just wanna be the operator and lease the real estate from someone else. Both of those ways are probably your lowest cost to entry and really just obviously ranges again on like how, the house you're starting with. What do you need to do to it to make it suitable for RAL?

Average Joe Finances:

Okay. So let's say, me, I'm coming up to you. And I say, okay, Hey, I want to get involved in this but I want to be as hands off as possible. So I'm more interested in the real estate side and buying the property and getting it fitted to be an assisted living home. What would like my steps be as I'm looking at this, so what kind of things am I looking for? What's my target market area ,what are those things that I should be looking out for as a real estate investor to purchase a property that's gonna fit this need?

Isabelle Guarino-Smith:

So when you're looking for the perfect property, it's all about demographics when it comes to residential assisted living. You're gonna really wanna target market the area where the 50 to 70 year olds, live, not the 85 and up right. That's what a lot of people immediately think. But the 50 to 70 year old is whose parent needs assisted living. They're the ones typically paying for it. They're the ones searching for it, finding it, paying for it, complaining about it or praising it. So you're gonna want it to be near them. Upper middle class, 50 to 70, who are typically home owners. You could find that research easily on Google for doing demographic research, going to like movoto.com, citydata.com, different websites like that, or just typing in like San Diego demographics and you can find out in your area, what age brackets of people, how much do they make, all that type of stuff. So finding those little pockets and you wanna be near those people. Cause like I said, they're the ones who are gonna be searching for a place for mom or dad to live. So you wanna be near daughter judy, we call her.

Average Joe Finances:

Okay. Yeah. So that's your profile, right? That's your target market. You're targeting their children. So that, yeah, that are looking for that assistance with their parents. And then, you keep your business going 20 years later, then they come to you. Cuz they know that you took care of mom and dad very well. So yeah. Okay. That's awesome. I've already got a full page of notes and we're like five minutes into this interview. That's great.

Isabelle Guarino-Smith:

Good.

Average Joe Finances:

Okay. No, good. So let's say that's the route that I went and I buy the property, I get it retrofitted, it is all set up. I looked up my demographics, I know it's in a upper middle class area, most of the people there in their fifties to seventies and that particular area, are there any other things I'm looking for nearby, like specific businesses, medical facilities, anything like that, that would assist me with making my particular property more marketable than my competition?

Isabelle Guarino-Smith:

Not necessarily more marketable, but just some tips and tricks, being near churches, synagogues, temples. Awesome. They're great referral resources for you also it's major traffic, the more eyes on your house, the better. Being on a busy road, being near a bus station, being near a power line. I don't care. A regular single family is not gonna want that house that has a power line going right above it. You don't really mind, right? You don't mind being near a police station, a fire station, anything like that. So it's not that you're more marketable or attractive by being by those it's just more, no one's gonna want that house, but you do so any awkward shaped houses, right? Any homes, like it's red Corvette syndrome. You're like, I've never seen a 10 bedroom, 10 bath home. But now that you've been, you're hearing me, you're listening to this and you're like, whoa, and you start searching for properties. Something's gonna come up. You finally buy that red Corvette and everyone has it on the road, that awkward, weird house that you're like, what would someone do with this now, you know exactly what to do. So busy roads, anything like that, totally fine. Not necessarily more marketable, but a good tip to separate yourself from what everyone else is looking for.

Average Joe Finances:

Yeah and opens up it gives you a lot more room, or a lot more options to choose from. Because now you get to look at the properties, maybe the ugly properties that somebody else doesn't want because it is awkward shaped, or it's in a location that's next to a police station. And nobody wants to hear those sirens go off all the time, or, yeah, exactly. The power lines are above ground and most people don't wanna live in an area like that anymore because they want everything below ground looking neat and tidy and everything where your residents are mostly staying in the house. And when they're leaving, they're going out to Medical appointments and things like that. Yeah, it's great. And also I didn't even think about that, but living by a bus station or somewhere close to public transportation, that's huge because a lot of times, as people get up in age, they tend to drive less or stop driving altogether. And that way it helps them keep their sense of independence as well. Cuz you're still thinking about them as you're a resident as your tenant. And making sure that you're providing them a good place to live, where they can still do different activities and be able to get to them, on their own and not feel like, they're stuck, relying on people all the time. Yeah.

Isabelle Guarino-Smith:

Hundred percent. Yep. Not only for the resident, but also your caregiver. You have to think, if you're where daughter Judy, if 50 to seven, you're an upper middle class person lives, is there going to be a massive amount of a workforce right, nearby? Probably not. They're gonna need usually public transportation to get to you because they might live in a household where it's one shared car, for one family. So they might not always have access to a car to come to the shift, work at your house. So being near a bus station or a Metro public transport is a benefit for them because now it's easy to get to your home and it's, you're making it more convenient for them.

Average Joe Finances:

All right, Isabelle that's awesome. And so you brought up something else there. You said the word caregiver, and I'd like to go into that a little bit, cuz that's another side of the business that I think we need to talk about. So real estate side. Cool. Got it. A lot of options there really opens up your repertoire of what you can use and gives you a lot more tools. But now when it comes to the business side and you have to hire caregivers that are gonna actually be able to be there to help with the residents that are living there. What kind of process does that look like? Do you go through a particular agency? Like, how are you vetting and screening people? Do you need to be licensed for that? Or do you hire somebody with a license? Like how does that side of it work?

Isabelle Guarino-Smith:

Great questions. So your caregivers are gonna be licensed through the state. So you're not gonna find someone and say, Hey, become a caregiver, I want you to work in my home. No, you're gonna find people who are already licensed, probably with experience already in this industry. You can find them just like you would in any business you can use hiring apps like Indeed and stuff like that. You could even do job postings on Craigslist, like whatever you might want or need. If we like to do like ads in local newspapers for different groups. So like we have a Filipino newspaper in the area that will put an ad, written in English, but offering this job opportunity and we get tons of traction from that. So you can not only use regular job search engines, but also some local search engines or newspapers as well as talking or networking with other homeowners because a lot of these caregivers are gonna work shift work. So eight or 12 hour shifts. So they might only be working for you three or four days a week. The other three or four days a week, they're working at Joe Schmos home down the street. So if he has them only three days a week, and they're looking for another job, you guys might be able to share staff when you only have one home. When you have more homes, you can share the staff and have them three days here, and three days there and work it around that way. But while you're getting first started with that first home sharing staff with other homeowners is a great way to go.

Average Joe Finances:

Yeah that's awesome until you get yourself established and you have multiple homes and I like that whole idea of, sharing the staff between the different homes, right? That's one great way to keep it all within itself while knowing, who your staff is, as people are rotating through, it's not like it's gonna be different person each time. Now, when you're actually hiring these caregivers, what are like, do you have a specific vetting process that you use or, is I know, like through certain apps and certain hiring websites and stuff they do things where they'll do a background check and things like that, but what are some of the things you're looking for when you hire a caregiver? Are you doing background checks? Are you checking credit scores?

Isabelle Guarino-Smith:

So the there's a licensed administrator who's gonna run all the day to day operations within your home. So you own the real estate in the business, you're gonna hire this licensed administrator. They're going to find, tour, market, get your caregivers, fire your caregivers, get your chef, fire your chef, do whatever you need. They're gonna run all your day to day. So, in the vetting process of the caregivers, the administrator is gonna be the one who's kind of hunting for them and then hiring, training and retaining them. Definitely you're gonna wanna do like research like that, just finding out, making sure that their background is legit calling past job experiences and making sure you have good recommendations and that their background is good, because this can be a scary industry and you wanna provide top quality care. So doing anything that you can to make sure that you are safe as possible, your seniors are as safe as possible is vital. Like just do it, but also you're not doing it, the administrator's doing it. But that's super, super important. Another tool we like to use is called predictive index. Have you ever heard of that?

Average Joe Finances:

No, please share.

Isabelle Guarino-Smith:

Okay. It's like a personality type quiz, but for work. Oh, okay. Okay. Yeah, it's really cool. People take this, it's only two questions, but it tells you who you are naturally, how you feel you have to be at work and then how you come off. And then when people take it, you can compete them with each other and say, you're really not gonna get along in a work environment, or you need to be cautious of this or whatever. We put in our top hundred caregivers across the country from our students homes and almost all of them had the same two profiles. There's I think like 14 or 15 profiles, you could be. Almost all of them had the same two. And the biggest driving factors was their patience. Their patience level was like off the charts. They were so patient. So it makes a lot of sense, they're working directly with the seniors and with the families of course you have to be patient. I would fail. I would be a terrible caregiver. That's not my strong suit, but I think that having patience is a weird thing to ask someone, are you patient. Sure, but having them take this test and see who they just naturally are, will tell you a lot about them. So a lot of our students like to use that tool, the predictive index quiz.

Average Joe Finances:

Okay. Yeah. That's fantastic. Okay. So going back to your administrator now, right? So we talked about hiring the caregivers, and it's gonna be your administrator that actually does that for you. So then, here's the ultimate question. How do you find the right person to be the administrator? Because it's just for us in real estate, you hire property managers, you need to find the right one that's gonna do right by your business and right by your residents. So when you come to the administrator I would think it's the same exact way. So how do you find the right person for that job?

Isabelle Guarino-Smith:

Yep. Great question. Because it is so important. They truly are the face of your business. Most of the seniors in our home and the families in our homes, they don't know who I am. They only know my manager, my administrator, they think she runs it all and I'm perfectly fine with that. They can think that they don't need to know it's me behind the scenes. It's so important that you're not only finding someone that you just get along with, but that someone who just gels and vibes with you and also is a bought in to what you are doing. If your plan is to have a hundred of these homes, get their buy-in make sure that doesn't terrify them. Make sure that they are excited by that and thrilled by that and on board with your vision and your goals. So matching up, not only like personality wise and then work wise, but also vision wise is super important. I share in the very beginning with any new home operator. Tell them your vision up front right away. Get them to be on board with that so that you can have a longer term relationship with them. You don't wanna outgrow them sometimes you naturally will, but you don't want to, if you can help it. So I think that having just those really open and honest conversations, getting them truly bought in and understanding why and what you're doing, and then making sure I like to pay our managers a bunch of different ways. You could pay them salary, you could pay them percentage based on how full the beds are, you could pay them a profit share, right? Profit off the top, all sorts of different ways, flat rates per each home. Like whatever you want. I really like to pay with some profit share because to me that's important that they know that they're just as much a part of this as I am a part of this and that if we're doing great, I want them to be doing great too. That's something they're not gonna find in a big facility, or with many other homeowners.

Average Joe Finances:

So actually, it's, they're getting a piece of that pie. Like they're an actual partner. They're really not your employee, they're your partner. And you guys, by getting their buy-in, they, they feel like they're part of that decision process. So it's a partnership at that point and if you're doing profit sharing, that's showing that same level of respect, for somebody that you would have as a partner in a deal for something like that. So I think that carries a lot more weight than what people might think. Cuz it gives your administrator, it's gonna give them like a sense of ownership. And, the better they do at their job, the more of that profit they're gonna get to share in. So it's also a really good motivator as well. But sharing your vision like, wow, that is huge. Like they have to share your vision. Cuz just like in any partnership, if you go in and you're like, Hey, I wanna buy, a hundred properties this year and this is the way I wanna do it. And you got your partners that are like, yeah I was thinking, 47, oh, we're not really thinking the same way we gotta get on the same page. So you gotta be on that same wavelength in that same level. Oh, that is fantastic. This is really good stuff. I've already got two pages of notes here.

Isabelle Guarino-Smith:

Oh, good. I wanted to say something else with that. In the beginning, you're not going to know if this is the right person or not. So you are still gonna play all your cards, right? You're still gonna share that vision. You're still gonna be open with them, but over time they might reveal themselves that they're not, and you might have to trial and error until you find the right one and that's fine, making sure that you are keeping that in mind too and growing into that relationship. I always like to say in business, there's three categories. You start with the "Don't do anything. Call me" category. Then you move to the, "Do it and tell me what you did later" category. And last category is "I don't even care. You make the decision", right? So in the beginning, everything's gonna be in this category until they can flow into that. And over time you'll know when it's like okay, I have the right gel, the right vibes with this person. And now mostly things are up there, it's time to really open up to them and pull them in as more of like you were saying that partnership, right? So I think it's an overtime thing. I just wanted to note that.

Average Joe Finances:

Yeah, that's huge. Cuz just like any, solo entrepreneur or real estate investor, that's getting started off themselves, it takes a while before you start delegating tasks. Even with me with my business and my podcast and everything too, it took a such a long time before I was able to delegate certain things to an editing team, to hiring a VA, to running certain tasks for me and managing my social media. So all those things like that, it really sometimes it's you have to let off the reigns a little bit, but at the same time, it's really hard to do that until you build that trust and build that trusting relationship. My VA has actually gotten more responsibility as time has gone on because we're building a relationship of trust and it's just been fantastic. Glad to see that it works the same here in this business model as well. So that's really huge. All right. So some of the key things that I'm seeing here, right? You got the real estate side, you've got the business side, but then you've also got, part of that business side is that relationship side that you have with who you're bringing on the team. With the person who's gonna be the administrator, who's taking care of everything and then who they're bringing on for the caregivers, right? Now, when you look at this particular structure, and I'm trying to think about like, when you're looking at what the profits are gonna be versus what your expenses are cuz now you're buying a piece of real estate, right? You're paying these caregivers to take care of the residents. And, so you have the expenses of the real estate, you have the expenses of making these payments then you have your administrator that you're paying as well, whether that's profit sharing, whatever route that you go. And then you are charging the residents so that you could fund all of this. So what does that kind of look like? How do you get to the point where you can actually afford buying the piece of real estate, afford the mortgage, afford the insurance, afford the business and the business insurance that you need and then the employees as well. So what does that kind of look like? And that's like a loaded question, but..

Isabelle Guarino-Smith:

No it's perfect. So the average cost to living in the assisted living facility right now in America today is $4,500 per month. So in most states you can have somewhere between 6 and 16 residents, every state varies on how many you're allowed to have in the home and then even within the state, they might vary county by county or city by city. But because it's 6-10 or, sorry, 6-16, we're gonna go with 10 cuz that's a middle of the line number, right? So if it's $4,500 to live in the house, you have 10 residents that would be $45,000 a month coming in, right? As your gross. Now $28,000 in expenses should cover all of your staffing, your food, your even some vacancies, your maintenance, your activities. That really should cover it all with 10 residents that leaves you $7,000 a month for a lease or a mortgage, you can get a pretty nice home and most parts of the country for 7k a month, that's cash flowing you as the owner, $10,000 a month net, 120K a year on one average, right? I know you mentioned you're living in Hawaii right now, or you're currently in Hawaii. The average in Hawaii is about $6,000 per month per person. So that same category, you could be making 20 K a month just by bumping up.

Average Joe Finances:

Those expenses are a lot higher for real estate.

Isabelle Guarino-Smith:

A little bit higher

Average Joe Finances:

out here too. Average median household price out here's over a million dollars right now.

Isabelle Guarino-Smith:

Yep.

Average Joe Finances:

It's that's it gets a little punchy

Isabelle Guarino-Smith:

It's still possible because of that exact thing is that if it's the average rate of 6,000, most of the homes we're doing and that our students are doing are not average, they're above average, right? So if average is six, are students at Hawaii are charging 8,500 per resident. So the math works real well when you've got 85,000 as your gross every month.

Average Joe Finances:

Yeah. And one resident is pretty much covering your mortgage expense right there.

Isabelle Guarino-Smith:

Yeah. Yeah, exactly. So it's pretty, it's, there's definitely possibility and ability to cash flow here, I always say that. A lot of people are not prepared at all for this time of life. And if you just owned one of these homes, you could be cash flowing now you or a loved one could live for free. And then when you do pass on, like my dad did, he left me three cash flowing businesses. That's insane. That's super incredible to be able to do that. What a blessing instead of this big burden that a lot of people honestly are saying, I'm gonna let my kids figure it out. I'm gonna let them foot the bill. And it's I don't think people are prepared for how expensive it's really going to be the cost of assisted living's gone up 79% over the last 10 years. And there's 76 million baby boomers who are going to need this. We're about 1.3 million beds short right now today and we haven't even hit the baby boomers needing this. So it's a massive crisis or opportunity, depending on what role you wanna play in it,

Average Joe Finances:

Oh that's huge. And those metrics are very important. So for those listening, when you think about that, if you're already 1.3 million short and we haven't even shifted into the baby boomers, starting to make this transition into the, into assisted living and things like that, this is where it's gonna happen. And we're also talking about right now too, because as you bring that up, like we're getting ready to see the largest transfer of wealth, ever, between the baby boomers departing. Right? And millennials. and gen Z as well. But that's like where we're starting to see this shift and where this this wealth needs to go somewhere. A lot of folks that are at least a lot of baby boomers are sitting at a spot where, you know, the way they were able to live their life, they were able to retire and have enough money to be able to afford assisted living and things like that because things were a lot different back when they started. You could graduated from high school and go buy a single family home, working as mechanic, have a single income for the family, versus today you need to have like multiple college degrees and everything, run a very successful business in order to make enough, to be able to afford a home. So big differences. So, the money's there. And what I'm trying to say here is the opportunities there, right? So this is definitely something that I think can be very lucrative to somebody that's looking to get involved. Maybe their first go at real estate and you wanna jump into this right away. A lot of people talk about, oh, I've built my way up from the single family homes and I worked into multifamily and that's how I got into apartment investing, things like that. I think the scene could be said here where you can just jump right off the bat, just like you could jump right off the bat into multifamily if you really wanted to, you could jump right off the bat into something like this with a assisted living as wealth. So does it

Isabelle Guarino-Smith:

Didn't agree more

Average Joe Finances:

Does that make sense?

Isabelle Guarino-Smith:

I love it. I couldn't agree more. I think a lot.

Average Joe Finances:

I'll make sure I'm not crazy here.

Isabelle Guarino-Smith:

No. So many people are like, let me start small. Why start small when everyone who started small is ending up here? Quantum leap, go there. Do the bigger thing. Do the better thing, get involved right away in something major, whether it is multifamily or RAL, whatever it is. But if that's your end game goal, Why waste your time, start there.

Average Joe Finances:

Yeah. And like I was telling you, before we hit record, I had talked to somebody previously about this, that I know that is doing this and they're doing quite well. I definitely know it's a good business to be in. But man, just having this conversation with you, it's definitely getting my juices flown right now and got me thinking, got the wheels turning. Because this is, this is not something that you think about every day, like when you think about real estate investing, and it's another option that's out there. Especially with the way the market's shifting and people are looking at it saying, oh, I can't even afford to go buy a rental property. I can't afford this. That's why a lot of people turning to short term rentals, because the return on investment is a lot higher because you're gonna make a lot more renting out per night versus that monthly rent. That's also starting to see a big pullback as well because of the economy and inflation and things like that so people are staying out less at that. So what's another out? What's another way that you can do this? This is another way where you can actually make quite a bit of money in both rents and your business to make up for that loss and to keep up with these higher interest rates and everything when you go and buy these properties, cuz when you think about it, that's of the thing that off puts people the most is oh we're coming up on 8% interest and how am I supposed to afford this $500,000 house on 8% interest? He's like, my mortgage payment's gonna be like 6,600 bucks a month if you have, if you bought a house big enough where you could fit 10 residents, you're gonna be in a pretty good spot. So now, that sounds great and all, right? so you buy the property, you get it set up. How do you get the residents?

Isabelle Guarino-Smith:

Yeah. Great question. There's an entire industry of people called placement agents, and what they pretty much do is when someone's at a hospital and they're hurt, or the doctor says you can't go home alone. They're pretty much walking around, passing out business cards to different home owners in the area. There's also lots of different websites that you can put your home on, basically for marketing, like caring.com and things of that nature. We have one ralhomelocator.com. So lots of different websites that you can do marketing and promotion on placement agents. Also, like I had mentioned earlier, churches, synagogues, temples, elder law attorneys, geriatric doctors, and nurses, long term care, insurance people, hospice people. The list is endless where you can get recommendations for residents, but if you're marketing appropriately and you're located appropriately and you're building those relationships, it really should not be that difficult. But it is if you're not doing everything correctly, so definitely not something to sleep on.

Average Joe Finances:

Yeah. Same thing you do in the real estate business in general, you network, build relationships, and. That's how you build your business. You know what, I think's really interesting about this cuz when I went to a conference this past March to real estate wealth builders conference and one of the things they talked about there was, it wasn't assisted living, but it was community homes. And this looks similar to that, but at the same time you can actually make a little bit more money with this. But the way I look at it is, you could buy one or two of these and be like, you can get yourself to a point where you're making enough passive income, that you can go and retire depending on what your lifestyle is. Go get three, four or five and you're in a really good spot. So this is just something that's very interesting. And that's why, I'm probably gonna talk to you a little bit more offline about this. But speaking of that, this has been fantastic. I already got some really fantastic notes here, and I really hope that my listeners are getting something out of this because this has been a fantastic conversation, Isabelle. So what I'd really like to go into now is something called the final round. And I'm gonna ask you four hard-hitting questions that I think will really bring some, shed some light onto you and how you got to where you are today and with all of your successes as well.

Isabelle Guarino-Smith:

Okay, I'm ready.

Average Joe Finances:

All right, let's do this. All right. So the first question of the final round is what's the biggest mistake you've ever made?

Isabelle Guarino-Smith:

In business or in life?

Average Joe Finances:

I, your choice. Cause you know what, everything you do in life affects your business as well and everything you do in your business affects your life. So whichever one you pick.

Isabelle Guarino-Smith:

I agree. You wanna know? In business, what's coming to my mind right now is what you were saying, being like a little bit type A when you first start things, I'm very like, I wanna control everything. So it took me a long time to learn that lesson and learn that other people can actually do things just as good, if not sometimes better than you can. And also what your time money is worth. It's like how I'm just gonna keep doing all these small little tasks when I can pass them on and I can go enjoy my life, like I need to learn to enjoy. So I think a big mistake that I made was holding on too long to things that are below your pay grade at some point. And you're like, you've gotta just pass them. You've gotta let go.

Average Joe Finances:

That's very fair. A very awesome answer. Yeah. Sometimes you just gotta know when to let go. You just gotta know, awesome. All right. Fantastic. All right. Next question of the final round and what is something that you've learned that you wish you knew when you first started?

Isabelle Guarino-Smith:

I think a lot of of people who are getting started in this industry, and even when I first started, I was very blessed that my dad had invested in real estate before. And so he did have money from past investments and stuff. So he was able to use a lot of his own capital to get started. And so I always thought that you have to use your own capital. But I learned over time. Like you definitely don't. There's so many of our students who use hard money, private money, SBA lenders, syndication is a big one. We partner with an incredible company that teaches our students how to do syndications. So I wish I would've knew that sooner just because I feel like I could have helped other people sooner too with that. And you don't have to use your own capital to do projects. And honestly, if you're leveraging other people's money, opportunity is endless. So I think that's a really important.

Average Joe Finances:

Yeah, that's fantastic. And I think your answer that you just gave ties into or maybe even answers this question, this next question. And that is, do you have any tips or tricks that you would recommend to someone that is just getting started today?

Isabelle Guarino-Smith:

My tip or trick would basically be that, talk to your family, find out what their plan is, because I think that no matter what age you are listening, right? You could be 50 to 70 year old. You could be that daughter Judy, hearing me being like, oh man, I'm a little bit worried now what if my parents need this soon? Or you might be more younger right. In that 20 to 40 range where you're saying it's super far off, talk to your family, find out what their plan is. Ask your parents for real, do they have monies? Do they have savings? What are they planning on paying? How are they gonna take care of themselves? And then ask yourself that same question, especially like you just mentioned with inflation going up and the cost of homes going up and everything getting crazier and crazier. If you don't have a lot of money coming in, that's not a good place to be right now. Like you need to figure something out now and if this is that opportunity, great. If it's something else, great, whatever it is, commit to it, do it, figure it out, figure out your plan, talk to your family and then do it.

Average Joe Finances:

All right. Fantastic. I love it. Yeah you have to have that plan and that conversation, like everybody needs to be involved in that. It can't just be you want to go and do this and, but it's good to know like what your family's thinking and, especially, when you're thinking about your own parents and everything, and Hey what's the plan for them in the future? It brings you back to reality that this is something that is needed, possibly for your family in the future, but also, if your family might need it, who else's family might need. And this is something that realistically, Hey, we all get older, we all die. It's a fact of life, right? So this is just one of those things that it creates a need, no matter what, there will always be a need for this. Just there'll always be a need for real estate. We always need a place to live. Yeah. That's fantastic.

Isabelle Guarino-Smith:

Couldn't agree more.

Average Joe Finances:

All right. The final question of the final round, and that is, do you have a favorite business investing or real estate related book or podcast or both?

Isabelle Guarino-Smith:

I really am enjoying The 5 AM Club book. Have you read that?

Average Joe Finances:

I have not.

Isabelle Guarino-Smith:

Okay. Add it to your list. it's a good one. It's like more like storytelling, but it's definitely still like business and just life advice I feel but it's a really good one and I feel like it definitely. It's not like miracle morning where it's do this. It's more like storytelling about the concept of life and just taking the bull by the horns and getting after it and doing everything like 10X really live your life to the fullest because you don't know what's gonna happen. And I think obviously I learned that lesson recently, but this book just puts it into business and life perspective to say stop waiting.

Average Joe Finances:

It's the 5 AM Club?

Isabelle Guarino-Smith:

5 AM Club.

Average Joe Finances:

Okay.

I'm part of the 4:

30 AM club, but yeah.

Isabelle Guarino-Smith:

Oh, there you go. You might already be in the 5AM o'clock

Average Joe Finances:

I have a meeting at 5:00 AM tomorrow.

Isabelle Guarino-Smith:

Perfect.

Average Joe Finances:

It's being here in Hawaii, most of the people I talk to on the east coast, a lot of times I'm waking up a little extra early, thankfully 20 years in the Navys kind of made me immune to that. I'm used to not sleeping or getting very little sleep.

Isabelle Guarino-Smith:

Yep. There you go. You might already be a member of the 5:00 AM club.

Average Joe Finances:

I might be there so awesome. I am looking forward to retirement where maybe I could sleep into seven. I don't know. We'll say. But I have a set alarm clock, my body, like I wake up at, even if I try to sleep in I'm up at five 30 Ugh.

Isabelle Guarino-Smith:

Oh my gosh. Thank you for your service.

Average Joe Finances:

Oh, thank you. Thank you. I appreciate that. All right. So that is it for the final round. However, I do have one more very important question for you. And it's the most important question because I could tell you, I got so much outta this conversation. And if I got a lot outta this conversation, I know my listeners got a lot outta this conversation. So for those that are listening, they wanna know more about Isabelle. They wanna know, what are you doing ,what kind of stuff are you into, where can I find out more information about her? Does she have a website? Social media? She runs an academy. I wanna know about that. Cause I might be interested in joining it. Where can people find that?

Isabelle Guarino-Smith:

Yes. Best website to go to ral101.com. We've got free books, free webinars, all sorts of free stuff there for you, but definitely we've got lots of fun stuff going on social media so feel free to follow us RAL academy pretty much on all forms of social media, even TikTok, having a lot of fun there. If you wanna join and watch my silly videos, but RAL101 is a great place just to grab free stuff, dig in deeper, you can also schedule a one on one call with me or anyone from my staff there. So if you wanna talk more, feel free to schedule a call there.

Average Joe Finances:

All right. Awesome. There you have it, everybody. So that is Isabelle Guarin-Smith and killed it this interview absolutely enjoyed this conversation. This was freaking fantastic. So again, thank you so much for taking the time to join me on the show today. Super humbled to have you on and I learned so much and I really hope that everybody that was listening learned just as much or even more than I did. Again, Isabelle thank you so much for coming on.

Isabelle Guarino-Smith:

Thanks for having me.

Average Joe Finances:

All right. And Aloha from Hawaii, everybody.