Here are the topics and some information from the Residential Care Investing Report.

This gives you information about what Residential Care Investing is about so you can see and decide which option(s) fit you now and what you can plan for in the near future.

Overview:

Residential Care Investing provides real estate investors another set of tools you can use to leverage residential real estate investing. 

The report describes how to use a residential house to provide a more familiar living environment, value-added services, and possibly some amount of personal care for seniors and people with certain disabilities who cannot or should not live alone.

By adding value that the residents want and need, and leveraging your costs, you can have a far higher cashflow than typical tenants and far less impact when someone moves out.

This is not about taking advantage of residents; rather, it's about

·         Leveraging your real estate skills, costs, and objectives

·         Providing a more familiar and comfortable living environment

·         Providing value-added services and a range of personal care from none to 24/7.

You can actually charge residents less than living in their house, apartment, or a nursing home.

In Dale’s interview with George Ross who is a real estate attorney and entrepreneur, and Executive VP with Donald Trump. He confirms that most people want a comfortable living arrangement.  He says that providing care using a residential house is a great way to offer comfort. 

 What is this? 

This report is for real estate entrepreneurs. There is a variation of this information for Homeowners to supplement their income which would help pay bills and maybe avoid foreclosure.

 There are probably hundreds of thousands of people are already doing some type of these options across the US, Canada, and just about any other country. Now you can join more real estate investors using one of more of these options to build their wealth and cashflow.

This information relates to real estate investors who are just starting, already dabbling, or has numerous real estate properties. It does not matter which group you are in.

Real estate investors typically buy properties under market value, do repairs and/or renovations, and either hold (rental) or re-sell it (flip). These relate to a long term hold strategy. When you can buy below market value and do inexpensive repairs, you start with equity to build your wealth faster.

 What are the 3 Options? 

Option 1: 
Provide a room to rent, you do not provide any personal care or medical assistance, and there is no state license.

A common term and used in this report is Independent Living. Some states and people call this Boarding House, Room and Board, and Group home. It is the most basic and easiest of the options.

You providing services including paying the utilities, providing furniture for the common areas and maybe for the bedroom, all appliances and kitchen wares, and probably the household supplies including cleaning supplies and toilet paper.

You could provide a maid a once a month, a yard person, and have a handy person for maintenance duties.

The resident may have family, a case worker or trustee come by occasionally or on a schedule to check on them or provide the care they need.

This is a valuable service that many residents and their families appreciate.

I mentioned there are variations in each of the options. For Option 1, the variations could involve the services you provide such as no maid, arrange transportation and healthcare providers coming in, and others.

Option 2:

Provide a limited amount of personal care and medical assistance to a limited number of residents in most states, and there is no state license.

Option 2 is a hybrid of Option 1 (Independent Living) and Option 3 (Assisted Living) which is allowed in most states. Some people call this Personal Care.  

Like Option 1, Option 2 does not require a state license and is all-inclusive with paying utilities, providing furniture for the common areas and maybe for the bedroom.

You should provide the same services as Option 1, but the difference is that Option 2 allows you to provide some or a full amount of personal care and medical assistance with part or full-time caregivers and support staff.

Option 2 has the largest amount of variations. This includes what services are provided, the amount of personal care, the staff, medical assistance, and others.

Within the state limitations, what you provide will be based on the resident’s needs and the caregiver’s qualification.

For example in Texas, you can have up to three residents and provide partial care with part-time people or the same amount as an Assisted Living place with 24/7 caregivers (with full and part time) based on their qualification. Colorado and Illinois allow two residents, and Louisiana and Alabama allow only one resident. California, Florida, and other states do not allow this option at all. Contact us for your states use of this option.

Provide significant personal care and medical assistance with a state license.

Option 3 requires a state license with their set of regulations. Homes can be called "Assisted Living Facilities."

With Option 3 there are house requirements that probably require modifications, you are providing personal care and medical care based on the qualifications of the caregivers and the resident needs. Assisted living facilities have qualified and trained staff (manager/administrator, caregiver/attendant, and support people) and supervision 24/7. 

This option requires the most amount of work, but there are tens of thousands of them across the US so it does not take a rocket science. It takes someone willing to follow written guidelines, similar to following city permits. Some people cringe at the idea of permits, whereas I do proper rehabs and the subs have never got a red tag – they know what they are doing.

 Who can do this? 

It does not matter if you are new or experienced real estate investor. Your available money and other resources will determine if you buy, control, or lease a house.

Having a house is key to these opportunities. What you do depends on your experience and abilities to find houses to buy or control through your work, wholesalers, Realtors or your networking.  

It is better if you can buy and use so you can build below market and build monthly equity which will add more to your cashflow.

If you have limitations to buy, then you try to control it using “Subject to Existing Financing”, owner financing, lease purchase, and other methods.

If you have further limitations, then rent a house from someone and then sub-lease it to your residents. To do this you need to find an owner who is agreeable to leasing you the property and allowing you to sub-lease it.

 Where can you do this? 

As mentioned already, these options are in a typical house in a typical neighborhood or out in the country. You are renting a private or shared room in a freestanding house or in a garage apartment. If you are doing Option 1, you can do this in a multi-family unit which is a great opportunity.

One of the biggest advantages of a house over a commercial building or institution is the familiarity and comfort it provides.

The location affects the quality of life for your residents as well as your opportunity for financial gain. A suitable location will match your residents' needs to your financial objectives. This can be in the city or out in the country.

The quality of life includes the location which involves local amenities, proximity to desired or necessary places. What are the transportation options?

You can consider buying a house with less desirable features and in higher value neighborhoods.

There are other factors to consider like amenities, proximity to desired places, transportation, can use less desirable locations, and higher value properties.

There are rare restrictions, but the US Fair Housing Act prohibits discrimination so there are court cases that overrule the vast majority of HOA and zoning restrictions.  

 What are the house designs?

The house design affects who can live in the house. You may want or need to make some modifications to accommodate your target resident. There is an extremely high probability Option 3 will need modifications. The house is not suitable for a person in a wheelchair if you have narrow doors, high thresholds, stairs to enter the house or rooms with no ramps, no wide access to the bath tub / shower, and others limitations. 

Assuming you want to make modifications for your residents, this is when buying a “distressed house” has a cost advantage doing the modifications during the rehab than another person buying a “pretty” house and having to demo and rehab from scratch.

Real estate investors have a HUGE cost advantage if you are doing Option 3 and already need to major rehab.

The house size and layout of the house can affect the quality of life through comfort. The size does not have a direct effect on how much you charge or how many residents. A more important consideration is the comfort of the house.

A larger house offers more comfort that you get in a small house, such as more rooms for different activities. The dining room can be dedicated to meals and also used for activities that are easy to move or put up.

You want your residents to be safe. The house must have some basic safety items and not have things that pose risks. Because you are renting you must follow state and local single family rental property requirements. Every state requires smoke detectors.  

Before each resident moves in, get a list of names and contact information for relatives, doctors, friends, lawyers, and others. The resident may or may not have other people to rely on if there is a problem; it is important for you to know whom to call.

We mentioned advising the residents not to bring anything of value to the house. They can keep valuables in a bank safety deposit box or with other family members or in a locked place you provide.  

 What will you provide? 

You provide some key services and others depend on what you or the staff is capable of doing and what the residents want and need.

You pay all the utility bills which includes electricity, gas, water, phone(s) (use a VOIP with the computer), TV and Internet. These are factored into the rent.

You control the common area furniture just like you going to a hotel. The common area needs typical items such as couches, high back comfortable chairs with arms, coffee and end tables with table lights, decorations, socializing table for games, and shelves for books and movies. Let’s add in other items like a TV, DVD, VHS, CD, stereo radio and other electronic components, which add value.

Provide a fridge, stove, microwave, clothes washer and dryer and other appliances.

You need typical kitchen and dining items. This includes food preparation such as pots and pans, bowls, measuring cups, and others. The dining includes plates, glasses, eating utensils, and others. 

You can check Goodwill or other resale stores and used appliance stores for bargains.

For Option 1 and low Option 2 you most likely will not provide any meal services, although you can if you have someone and then charge accordingly. For Option 3, the support staff / caregiver will be responsible for their meals. 

 instead.

 What staff? 

Option 1 does not have any staff.
Option 2 needs some staff depending on what the residents need, the staff’s qualifications, and if they take some of the State required class(s).
Option 3 requires qualified staff and some special State required training.

I use the word “staff” to refer to anyone working at the house for any purpose. Types of staff are:

Support Staff – do services and support for the residents and the house. This is for non-personal care such as preparing meals, cleaning, transportation, errands, and others. 

Caregiver or Attendant – a person providing direct care to the residents. Some states may have some type of a state license and most require specific state required training.

Manager or Administrator – the person responsible for the residents, all the staff, and the house requirements and operation.  They may need certain education or some type of a state license and require specific state required training.

If you operate multiple houses you may be able to share staffing among them. You may save money and have more consistency of services.

 How do regulation fit? 

There are various local, state, and federal regulations that affect rentals and assisted living. Even if the house does not need to be state licensed in your area, you are still subject to regulations that govern certain activities such as typical single family rental property, permits for doing repairs or renovations to the house, medication involvement, types of personal care, sexual harassment or misconduct, and others. To avoid possible liabilities you need to be aware and follow applicable regulations in your area.

Option 1 does not provide personal care or medication assistance or administration, so certain regulations do not apply.

Option 2 is allowed in most states. You can provide some amount of personal care to a limited number of residents without a license. You need to follow the same regulations as Option 1 and I suggest some of Option 3 because they make sense and help your operations.

Option 3 has a number of state and local regulations you must follow.

Remember, the more you value add services and support, the more you can charge, and more money you can make.

You do not need to be afraid of the regulations if you operate a proper house / business. The regulations are intended to align with providing a decent place for people to live – although some are extreme or do not make sense. The regulations should a barrier to slumlords that do not care about people’s living conditions.  These places will never pass a licensed place and hopefully people can find a decent place instead.

 What is your marketing? 

You are marketing directly to seniors and people with disabilities, to their families or trustee, and organizations supporting people needing a room to live in. As with all marketing, your message needs to align with your target resident and how are you going to reach them.

The type of marketing you do depends on the number of properties you will have and how much assisted living you will provide. For example, if you have one house with three residents you do not need a full marketing package. You will still need basic marketing materials such as letters, flyers and various ads so you can explain who you are and what you do.

First, decide which option you want to pursue and what services and personal care you will provide.

Second, who are your potential residents and how do you reach them. If the resident is not able to comprehend this type of information, then you need to know how to find and contact the people making the decision.

Third, do and use your market analysis as part of your marketing plan and content. A marketing analysis tells you who your completion is, what do they do, and how much they charge. Visit a variety of care places. You will need to do some online searching and look around when you are driving to find places. It helps you determine what you will do and charge.

Fourth, complete and implement the marketing plan.

 What are the financial benefits? 

The core financial benefit is starting and building equity, which is part of building wealth. Most people who choose to provide a home for seniors or people with special needs are in business; they should not feel bad about making a profit as long as they provide a corresponding amount of value for residents. Another choice is to do this as a charity or for minimal profit.

Tens of thousands of people have state-licensed houses across the country. A couple people I spoke with guess there are possibly 3 times more houses doing Option1 and Option2 but they are not registered so there is no way to know how many. 

There is a far less financial impact when you have several people living in a house and someone moves out. When a tenant (whether single or a family) renting the entire house and they move out, you have zero income. When you have several people living in the house and one person moves out, you can still have a positive cash flow.

There is a basic economic principle of supply and demand. There are far fewer places for seniors and people with disabilities to live. A subdivision may have a dozen houses for rent to typical tenants, but there may be no residential care houses, or maybe 1.

There is no formula to determine how much to charge. You may have all the value added factors, but if the residents cannot afford to pay the amount you expect to get, they will go elsewhere. This is when having different types of houses can be an advantage.

Competition and the local market affect how much you can charge. We discussed how to find your competitors and learn what they provide in the Marketing section.

Make a list of what you and four or five of your key competitors provide and charge. You can charge a premium if you provide services or amenities that others do not.

 Summary and your next steps? 

Here are the nine key steps to take advantage of these opportunities.

1.     Get informed and decide if it's for you. Don’t assume anything at this time.

2.     Decide what services and if or how much care you want to provide.

3.     Understand if or how the regulations fit your business model.

4.     Decide how you will control the house if you want and are able to buy, lease, or other methods.

5.     Find the house that aligns with your plan.

6.     Staff and provision the house with what you will provide.

7.     Create and implement your marketing plan.

8.     Run the operations.

9.     Repeat with leveraged expenses.

This gives you a lot of information about the 3 Options for the opportunity to help desiring people and yourself.

Go to the Product page, or call us at 713-510-8899 or email at residentialcareliving@gmail.com for more information and to answer questions.