All Forum Posts by: Charlie Cameron

What’s up bigger pockets fam! I wanted to briefly re-introduce myself (I’m committing to get more active in BP again!) and offer up question and answer support for anyone interested in investing in residential assisted living, actively, passively, or somewhere in between.

Over my real estate journey I’ve tried a lot of different asset classes and finally landed on residential assisted living as my favorite real estate niche and perhaps the most incredible growth opportunity for the next few decades due to demographics and how that will drive demand to keep outpacing supply.

My partners and I own a portfolio of residential assisted living homes that we commercially lease to the business operators. This affords us excellent cash flow and lower maintenance on a 3-5 year commercial lease.

Recently, we created the first (as far as we are aware) residential assisted living focused fund and have successfully raised for multiple homes, giving our investors and us exposure to the cash flow, and equity upside that comes from owning the real estate and the business.

We also run a residential assisted living mastermind to help entrepreneurs start and grow their businesses. We never imagined we’d be having to much fun growing together in a mastermind format and helping other succeed.

Residential assisted living is so interesting on so many ways, like:

• There are different levels of active to passive to invest.
• There are so many ways to approach this model, from buying existing, to retrofitting homes, to building new. You also have the option of only owning the real estate or the business as well.
• I can’t think of a more fulfilling and pride of ownership opportunity in real estate than owning really incredible homes providing better care than big box facilities. Seniors literally have better health outcomes.
• The data is undeniable that there’s so much existing and future need for more capacity. So much so that it would be difficult to make even a dent in the need by opening thousands of homes.
• When done right, these are high cash flowing homes. I don’t know of any other opportunity where you can net $10-20K (in some cases even higher) per month on a single residential property.
• There’s usually plenty of room to bring investors in and everyone involved still win, even in todays higher interest rate environment.
• Financially, residential assisted living is usually a more cost effective option for families than alternatives.
• We are quickly approaching the Silver Tsunami of the boomer generation aging into needing assisted living. This is the biggest need in history for the wealthiest generation in history.
• Assisted living has historically outperformed most other real estate classes, have maintained incredible occupancy rates (despite the COVID blip), and continue strong rent growth.

Anyway, I’m still a student in many ways, but I’m studying, investing in, and educating on residential assisted living full time. If you have any questions that I can answer, fire away!

Quote from @Marjorie Josaphat:

Hi, 

Thanks for responding. It is big with over 20 rooms

I’m sorry I missed this response. Did you end up pursuing this opportunity?

Quote from @Nadine Smith:

Hi Paul. Did you open that group home in PG County? I have been doing some research but hit a road block. 

 What road block? And what type of group home?

Quote from @John Silva:

Hi all,

Has anyone leased their units to companies providing services to sober living or elderly care services?

Yes. We got burned on sober living due to state under regulation switching to over regulation. We won’t make that mistake again. We are all in on assisted living - these homes are so much more needed and in a protected class that once licensed, they’re usually grandfathered in forever. And the demand is only going to increase incredibly over the next two decades due to demographics and lack of supply and building. 
We have a portfolio of homes we lease to assisted living operators that cash flow on average 3K a month. Little harder to get into but great when you do and find the right operator to lease your home for 3-5 years! Happy to answer questions. 

Quote from @Erwin Sham:

Quote from @Garrett Brown:

Quote from @Todd Goedeke:

@Garrett Brown let’s hear your success story .why would a passive investor looking for a fixed rate of return of 15% Cash on Cash want a variable return via co-hosting?

To start, a passive investor would never consider co-hosting so I can’t even answer that question as people have mentioned these are businesses. My question wasn’t owning vs co-hosting vs arbitrage. I was asking for opinions for each side for people that have done them. 
1) I doubt any STR in 2024 is going to be COMPLETELY passive and make a fixed 15% return.
 If you know where that deal is, please let me know lol
2) I own 4 and co-host 3. The cash-on-cash return for my co-hosting ones are basically infinite because I put zero down in monetary value (sweat equity and experience are another thing) to make a profit. All my systems work together so my owning has higher returns the more I expand my co-hosting as I am vertically scaling. 
I’ll always be a fan of buying when you can. Not everyone can put down 20% to start in the STR world and these are options to find an entry if someone desires. 

I have done both. Started off doing arbitrage for STR. Then pivoted some units to MTR. Also picked up co-hosting units. I know a lot of arbitrage hosts who aren't continuing and actually dropping these arbitrage units. Co-hosting is lower cost and easier to scale once you have your systems in place. It doesn't take 1 year plus to make back your money. Now I would only consider arbitrage for coliving/rent by room or assisted living. STR arbitrage is getting more expensive as everyone is force to add more amenities. Imagine trying to ask an owner permission to add on hot tub or high cost item just so you can compete. A lot to factor if the numbers actually make sense to do it. Personally I rather just own than arbitrage at that point.

I can't contribute on STR arbitrage, but I own STRs and have a portfolio of homes here we essentially arbitrage for assisted living, I CAN say the latter is awesome. We have multiple homes designed for assisted living that we lease out to the business owners. Because these are renovated to suit and can be licensed for assisted living, we are able to lease them for ~3X market rent. We cash flow on average $3K a month once leased on a 3-5 year commercial lease with increases built in. Can confirm: awesome.

Quote from @Johanna Abanes:

Thanks for the suggestion! I've tried reaching out to agencies in Georgia, but I haven’t had much luck getting in touch with them. I’m still exploring other options though. Appreciate the advice!

 Mohammed had a great suggestion. Networking is going to be key. You want to create continuous referral sources. You also need an online presence—this is commonly one of the most important and not done step. Do you have a website and Google my business profile that can be found by search? Lastly I’d add that there are some bigger Facebook communities you can join and build relationships and network in that should help as well. Hope it works out! We decided not to go down that path because we felt assisted living was less risky from a regulatory standpoint. 

Quote from @Johnathan Cummings:

Hello all! Was wondering if I could turn one of my spaces into an assisted living multi-tenant facility as it’s in a great area for it and can be changed with a reasonable rehab. I’m not sure all of the regulations/rules to this in PA though. Anyone that could point me in the right direction or give any advice I’d love to hear, thanks!

Can you provide more details on what the property is like? Size, type, floors, etc? I will relay what I can but need to have a better idea first!

Quote from @Nichole Kinard:

@Charlie Cameron What's your podcast?

 Hey Nicole! It is launching in about a week. The RAL Room assisted living Podcast. 

Quote from @Laura Chotkevys:

Quote from @D. Dee:

@Laura Chotkevys how much capital would you recommend for starting this type of business?

 We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k.  On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.  

 Laura and Brett are the real deal! Looking forward to my podcast interview with Brett next week! Like @Laura Chotkevys said, you can raise money, creatively finance from the seller, partner, get lower money down loans (SBA - although this is harder for the first deal sometimes), get a private note... lots of ways to go about this with low money down if you put in the work and know how much you need. 

Hey @Mary Enciso! We have done that a number of times, it is great once you have everything completed for the home to be licenced and you find a great operator. The last part is the biggest challenge. Keep in mind, you will likely have to install a sprinkler system, among making other changes for the home to be used for that purpose. I also find that often times when people consider this, the home isn't well suited (too small, not enough bedrooms, not single story). Do you still think this will work for assisted living?