All Forum Posts by: Dan Brewer

@Damir Kamber

 I have a pool of investors that provide their capital to my company, and I in turn place their capital in various 60 bed - 200 bed senior housing communities.   

All, I have spent the last eight years providing equity financing for senior housing, mostly assisted living and memory care.  It is an extremely HOT sector to be in. Its consistently been the # performing commercial sector for the last 10 years.  My focus is completely on traditional, larger senior housing communities, and not on the conversion of houses into senior housing, which has been a trend in recent years.  I have been asked often to provide financing for the conversion of homes into senior housing communities, and I have declined for three reasons: 1: I am overwhelmed with my current focus.  2. I am not convinced the economics work for smaller (6-10 bed) bed converted homes.  3. These are operating businesses, not just rental arrangements.  You are investing in some way, shape or form into licensed, state registered businesses, and at present the quality of the operator for such converted homes is either non-existent, unproven, or not someone to whom I feel I can commit investor dollars.  The quality of the operator is the #1 determining factor in the success of a senior housing community.   

There is a growing emergence of operating companies that solely focus on providing senior housing operational management for smaller 6-10 bed converted houses.  Once such services are more common and proven, it will help the converted-house senior housing sector.   Until then, just be careful as you venture forth in such a segment.  It is far from proven.   An alternative is to focus your time and efforts more on the traditional large senior housing community sector; it will be white hot for the next many years.   

Thanks, Dan Brewer

Hi, my name is Dan Brewer.  I have been in real estate investment and capital business for 22 years, and am based in Lenexa, KS.  I have recently started a new investment fund, established a new office location, and am adding staff.  If you are interested in a true entrepreneurial opportunity in real estate finance, this may be your chance.  I care more about you, your talents, goals, drive, personality than your background, although that is important too.  I want energetic, positive people, driven, motivated, team players.  I will be hiring several positions over the next year as the company continues to grow.  So lets start getting to know each other, make sure its a good fit for both of us.  I consider this a rare opportunity for the right individuals.  No calls, no resumes, just drop me a message and we will go from there.   Thanks, Dan  

David, 

My full time occupation is providing capital for the development of large senior housing communities. If this is the type of community in which you have an interest, just let me know.  I am more than happy to help you. 

Thanks, Dan

Karen - 

Very pretty property - I want to live there!  

Small coincidence - My grandmother, who lived most of her life in Iowa, moved to Redding and lived in a retirement center there her last 10 years - probably one of those old antiquated ones that you referenced!  

I have a senior housing developer/operator in LA, and I will broach him on the area.  I'll get back to you as soon as I hear from him.   

Dan

Hi Karen, 

My particular focus is raising capital for senior housing developers and operators across the country.  These are for traditional, 60-150 bed facilities for assisted living, memory care, and transitional care units.  Its quite possible one of my clients may be interested in developing a facility on your parcel or a portion of it.  Let me know if you want to explore that.  

Regarding converting your home into a senior living faciilty, I am not active in that sector.  However, one of the Bigger Pockets members is - @Bill Bradfield .  I am sure there are others, the sector is getting popular.  I suggest touching base with Bill and see if he can help you.  I have a couple other names that I can provide you as well.  

Dan

Craig - 

I think 8% with virtually no risk is realtively attainable.  However, when you incorporate being a landlord, there are so many more variables.  You can simplify by just looking at cashflow, but honestly, you are missing the mark if that is all you are going to focus on.  Capital acquistion costs (if you leverage). inspections, improvements, repairs, depreciation, appreciation, capital gains, tenant issues, etc.  These are particularly more painful if you've never been a landlord, which is sounds that way.  

However, the biggest factor is your time. Is your time really worth 2% more in return?  I hope not.  Being a landlord is not passive.  You would be better off with your money in REITs or other types of RE investments that offer a greater upside with moderate risk, in which you are a passive investor.  

@Marcus Maloney Its not as simple as following state regulations.  Senior housing is an actual operating business, very different from simply renting a house.  I have met Gene Guarino and am familiar with his program.  I am heaviliy involved in the senior housing sector, have been for the last 6 years, and will be for the next 10 years.  Its the sector to be in right now.  Quick FACT - what was the #1 performing commercial sector for the last 1, 3, 5 and 10 year periods? If you said senior housing, you are correct. It beat apartments.  It beat hotels.  It beat office. It beat industrial.  And the next 10+ years should be even better, with the retiring baby boomers.   

Even though I focus on traditional, larger full sevice senior housing communities, there is a place for 6-10 bed houses, particularly for low-acuity residents.  While I cannot directly endorse Gene, simply because I have not attended his courses, I am pretty confident Gene will help educate you on how to manage that business, not simply educate you on what the state regulations are.  

@Hal Cranmer  If you are serious about getting into the single family senior housing business, I suspect Gene's course will be worth the time and money.  Do the rest of the BP community a favor and report back on your thoughts on the course.  This is a big area for investors to move into, and will be for a long time.  I am sure they would appreciate the feedback.  Gene probably would too.  

Dan

Investors dont typically sell something that is working well for them, they sell headaches. That does not mean its a bad deal, it just means you need to understand you will be buying his headaches too.   I doubt he is stupid enough to think that values have not changed in 8 years.  Eight years ago was 2006, at the height of the real estate market before the crash.  Many markets have recovered, but who knows for rural Indiana.  

At $3,200 a month and $258K purchase price, thats about a 1.25% monthly rental return.  Not good, given everything else you stated.  And certainly not a smokin' deal.  And at $3,200 gross a month, $700 net to you, sounds like expensive financing.  In five years, you are grossing $35K to $40K, barring any rent increases. And with that, you have to cover the vacancy, repairs, upgrades.  Sounds like you are in a zero cash flow situation if not worse.  I personally dont like the smell of it.  Unless there is a huge amount of equity, this is just not a good deal, especially for your first one.  

If you really like the homes, the location, etc, I would negotiate very hard.  And be fully prepared to walk away.  Leave him with the headaches unless he makes it worth your time. 

@Jay Hinrichs @Brandon Hicks 

We are on the same page.  I did not see a traditional bank making this kind of loan, with no PG.  Brandon confirmed it.  

Thanks