Assisted Living Cash Cow With Isabelle Guarino-Smith

Episode 556: Assisted Living Cash Cow With Isabelle Guarino-Smith

REIS 556 | Assisted Living


If you’re a single-family investor, then you fix and flip, buy the home, renovate it, sell it, and get out of the job. As soon as you sell it, you must get another one and do it again, and another one and do it again. That’s not cash flow; it’s cash now. In this episode, Isabelle Guarino-Smith, the Residential Assisted Living Academy‘s leading lady, shares her secret to freedom numbers by milking cash from assisted living. She also describes the complexity of finding the right person to work for the organization. Isabelle also radiates the beauty of these luxury homes in significant parts of the town. Tune in to this episode to gain more insights from Isabelle.

Watch the episode here


I’m here with Isabelle Guarino-Smith. We’re going to be talking about assisted living in this episode. I’m down at the ranch. It’s opening deer season in Texas. As you might as well guess, we’re all locked and loaded and ready to take on the world down here. With no further ado, how are you doing, Isabelle?

I’m doing good. Thanks for having me.

How long was your dad in assisted living?

Several years and I started two years after him. I was his first employee.

You are keeping it in the family, right?


When you first signed on and were working with him, what was your role or was it anything he asked you to do?

He had started his first home for my grandmother. She fell and broke her hip, and she needed assisted living. He was not happy with anything he was finding out on the market, so he purchased his first RAL home, the real estate and the business. I’d watched him be a real estate investor for 40 years. I saw him deal with tenants, toilets and all the drama.

All of a sudden, he was working with old people cash flowing like crazy and super happy. Naturally, I started to say, “What’s going on here? What are you doing?” I pushed my way in and started exactly like that. Just saying, “What can I help with?” I was grabbing things off his plate and learning the business through being near him through osmosis.

Give us a little bit about your background. College, no college or what?

I went to Arizona State University. I have a double major and a double minor. After that, I did Teach For America out in Miami, Florida. I then became a flight attendant for American Airlines. That is a super fun job but you make nothing. Growing up with the rich dad mentality, in Rich Dad Poor Dad, my dad always taught us to be entrepreneurial and not work for the man and do things creatively. Even though I was having a lot of fun, it wasn’t making a lot of sense financially. I was excited to have this opportunity to work side by side with my dad.

Where do you begin with the assisted living? If someone’s interested in this, what are the highlights? Why would you choose assisted living as a strategy?

If you’re a single-family investor, you fix and flip. You buy the home, renovate it and sell it. You’re out of the job as soon as you sell it. You’ve got to get another one and do it again. That’s not cashflow. It’s cash now. I’m not a big fan of that because you’re continually stuck in the rat race. With single-family rentals, with a couple of hundred bucks a month, you’re going to need a lot of doors to get to your freedom number. With Airbnb, you can make quite a bit of cashflow, but you’ve got cities like Atlanta, Miami and San Diego shutting them down saying, “No more can you even do this here? I don’t want to be at the beck and call of the powerful hoteliers who have a lot more power than us solopreneurs.

If you're a single-family investor, you buy the home, renovate it, sell it, and as soon as you sell it, you have to get another one and do it again, and another one and do it again. That's not cash flow; it's cash now. Click To Tweet

Owning and operating a residential assisted living home cash flowing a minimum of $10,000 a month on only one of those homes, not only is the cashflow amazing, the demographics support this. There are 76 million Baby Boomers who don’t need assisted living now but in the next 10, 20 or 30 years, they sure will. I want to be looking at the trends ahead, the cashflows there and then the impact.

To me, this is an incredible opportunity to be able to give back to your community and your family. The senior housing options we have are not okay and we should be upset about what we’re seeing out there. We need to do something better and different. I love being a part of that movement. Our company motto is, “To do good and do well.” That’s important when you’re talking about investments. It’s not only making a lot of money but making a big impact.

“Do good and do well.” I’ve heard that before. Maybe it’s from your dad. Does he have a system set up that helps people shorten the learning curve for what they’ve had to learn the hard way?

We teach and train on this concept. We own and operate our three care homes. We invest in about 50 others across the country, but we teach and train on this every 6 to 8 weeks in Phoenix, Arizona. We do a full three-day training where we show people step by step how to start, own and operate these homes from a passive or active perspective. I like to do it passively so that’s primarily what I focus on, but we show people how to do this all across the country.

Do you know a guy named McLemore? Is he part of your association?

No, I don’t think so.

I think he studied with you. He’s one of my friends in Austin. I’m pretty sure he’s been to your boot camp because he’s all gung-ho and has said, “Do good and do well.” Either you made an impression on him, or he is one of your downlines somewhere. That brings up a good point because if you’re only going out for the money, it’s one thing but if you have a higher reason and you get paid well, it makes a whole difference in how you’re perceived and everything about life gets better if you have a higher reason. We’re all going to need help one day. Maybe someone will take care of us like you’re taking care of your people. I’ve been to those assisted living places and they’re scary as hell.

We’ve got to do something better and it’s important. We say it even stronger than that. We say, “I guarantee you’re going to get involved in senior housing one way or another.” You’re either going to be lying in the bed writing the check for yourself or a loved one or you could be owning the real estate or the business cash flowing and living for free and having your loved ones live for free. It’s something to consider getting involved in because of the inevitability of it all.

REIS 556 | Assisted Living

Assisted Living: You could own the real estate or the business cash flow, live for free, and have your loved ones live for free.


Are you buying houses, facilities or both?

Only residential. We focus on residential assisted living, houses anywhere between 6 and 16 residents per property.

Describe the moving parts. You can’t put them in a house and say, “See you later.” They have to be manned. Tell us about the complexity or the simplicity of finding the right people to work for your organization.

24/7 care is what makes these homes assisted living homes. If you only had the seniors living in them, that would be more independent living the Golden Girls style. There’s 24/7 awake staff there so it’s not you. You’re hiring the licensed administrator who’s licensed through the state. In the real estate world, we call them the property manager. They’re in charge of hiring and firing your caregivers, touring the home, marketing the home, welcoming the residents and dealing with all of the day-to-day.

The caregivers are who’s responsible for the 24/7 care of the seniors. They help with all of the ADLs. Anything that you do from the moment you get up out of bed to the moment you go to bed at night like brushing your teeth, bathing, eating, going to the bathroom, showering and all those different things that we need help with as we age. Within the home, you have a licensed caregiver who can oversee between 2 to 4 properties and the caregiver is usually a 4 to 1 or a 5 to 1 resident-to-caregiver ratio.

A lot of people don’t know this. My wife’s had Parkinson’s for many years, and I have 24-hour care at my house. I know how expensive that is and I’ve hired my own direct, so I haven’t hired a service. Even at doing it directly, I needed three shifts just in case anybody went down, and they could cover for each other. It runs me about $160,000 a year. I’m fortunate to be able to afford it but I’m going to guess that your assisted living program would be less expensive for those who couldn’t afford to bring it into their home 24/7.

You’re right on point. The average cost of in-home care nationally is $27 an hour. If someone needed 24/7 care at an average of $27 an hour, 30 days a month, that’s $19,000 a month. You’re not going through an agency, which is probably saving you a pretty penny, which is nice but it’s very expensive and most Americans can’t afford in-home care. The national average for an assisted living home is $4,500 per month per person. Depending on your area, it could be higher or lower but that’s the national average.

That’s a very big difference and it’s a good choice. If you find the right people, one thing I learned about caregivers right off the bat is if they’re in it for the money and they’re working for a paycheck, then they’re the wrong person. The caregivers that I have has a caregiver’s heart and there’s a huge difference between the two people. If they’re working for agencies, agencies are taking a big share of that.

There are arguments. They do the payroll tax. They have liability insurance and all that stuff. It’s tenuous at best. Sometimes I wonder if I should go for the agency but then when you see the difference in cost, I’ve hired a lot of people in my life. I got to hire three more for something different. I got to go through the apps and find them but if I’m good at that, it saves me tens of thousands of dollars a year. My next choice is a facility like yours if I had to. I’m blessed that I can afford the care that I can. We didn’t have insurance for it. Most people don’t. It’s long-term care insurance. It’s very expensive and you don’t even know if you’re ever going to use it.

Only 10% of the population has it. When people think about that, how are they going to pay for their care when they need it? With everything crazy going on in our economy, everyone says during a recession, the rich get richer, and the poor get poorer. How are people preparing for this? We have a massive influx of seniors. 70% are going to need daily care for an average of 3.5 years. Most people are not prepared for those financial obligations. They’re going to be relying on their adult children.

REIS 556 | Assisted Living

Assisted Living: Everyone says the rich get richer during a recession, and the poor get poorer.


When you’re trying to take care of your parents yourself and you’re the only one because you can’t afford anything, it is a brutal business and situation because you don’t get any sleep. Sleep deprivation is one of the most damaging things you can put yourself through. I realized, first of all, I’m not a caregiver. I wasn’t born a caregiver. I could try as hard as I want to, but you can’t make a cow into a racehorse, and you can’t make a racehorse into a cow. I tried my hardest and I sucked at it.

It was horrible. I didn’t have the temperament for it. It’s sad to say but on the other hand, I was a good hunter and gatherer. I was able to amass enough to pay for the things I wasn’t good at. I sometimes in these interviews go, “I don’t know if I should go here or not,” but then it’s transparency so we’ll go there. Some of the places I’ve seen and some of the people I’ve interviewed that are working programs or similar programs are also going to assisted living places like Golden Girls.

They don’t have staff and then they’re trying to help people, families and the children settle estates, get assets out of people’s names, whatever they have to do or sell the home. They have hopes of buying the home. Do you buy homes too if it works out for the people that are going in or are you strictly on the care side?

We’re strictly on the care side. We do not do that, but I do have a lot of friends who own businesses who do exactly that. There’s a big cash cow right there. There are 21 million homes that are going to need to go somewhere and most of those seniors are going to need that capital to pay for their assisted living needs. It’s a great way to get involved in that industry but it’s not what we focus on.

Even in the house flipping, people say that we’re vultures dancing on people’s graves. It is not the case in my business. I don’t see it as the case in the assisted living business if you want to mine for properties that way because these families have no idea what to do. They have no way to straighten it out. They have no idea what things cost, how to liquidate the house or have an estate sale to get rid of the things that are not family heirlooms and stuff.

If we can help them through that and it ends up that they want us to buy the house and we can compete with whatever they’re willing to pay for it, then they get a chance to pick up some houses too. If you’re doing it like you’re supposed to be doing it, which is to give and then if the opportunity arises, then you do. They’re trying to get them to assisted living places and help solve these families’ big problems. You said something we glossed over. It is the demographic. The Baby Boomers were retiring at 10,000 a day or something. Is that right?

10,000 people a day are turning 65 now and 4,000 people a day are turning 85. It’s big numbers.

After World War II, all the men came home and started making babies. They’re called the Baby Boomers and the Baby Boomers have driven this whole economy from the Ford Mustang by Lee Iacocca. They made that sports car for the Baby Boomers and then it was the homes for the Baby Boomers. It was the cars for the Baby Boomers with the minivan. As they go through their life cycle, they changed the whole economy because they are a huge number, which is part of the problem that our country is facing. We are getting fewer people in the workforce to have to support a whole lot of aging people. The demographics are on the side of this kind of strategy.

For 70 years, they’ve been driving the economy and they’re not going to stop until everybody’s gone so you may as well continue to follow the money.

One guy put it to be succinct. I’m trying to get my hands around how big is the Baby Boomer population in respect to everything else. He said that it’s like a basketball passing through a garden hose. If that puts it in any perspective, it’s huge. What separates your assisted living facilities from the run-of-the-mill facility?

The biggest thing is the quality of care because, in the big facilities, their ratios are typically 15 to 1 and sometimes 20 to 1. The lack of care and attention for the seniors is astronomically higher than in our homes where it’s 4 to 1 or 5 to 1. They’re also not homelike. You’re seeing a lot of these big commercial facilities starting to be built homelike. It’s a home. Most of us grew up in a residential home in a residential neighborhood and that’s exactly what these are.

REIS 556 | Assisted Living

Assisted Living: The lack of care and attention for seniors is astronomically higher.


The physical property feels a lot more natural. There are no long hallways or impersonal staff where you’re only a number. The care is night and day. The cost of care is relatively the same so there’s not much to be said there but the quality of care is so much better. I prefer that because when I’ve been into many of these large facilities, it’s heartbreaking. The smell and the attitude of a lot of the staff. You see these seniors being neglected all day long. They’re not getting the social interaction that they need.

All of these things are aiding to them pass even faster and them passing with a not-great last couple of years or months of life. I want to be able to give them the best last couple of years of life where they know that they’re loved and cared for. The people who are watching over them and who know their names and stories are there for them. That’s important. It’s the care.

I can’t imagine a 15 to 1 ratio being worth a crap. I know how much it takes. The one person who’s here every day for eight hours must be exhausted when they’re done. A lot of times, they’re sitting but there’s no rest. I can’t imagine a 15 to 1 ratio being anything that you would want your mom or dad to have to suffer through. They need to go to the bathroom or they want something and a lot of them are short of Alzheimer’s or dementia, which is even worse because then you can’t even let them out of your sight for a minute.

They get obsessive-compulsive. They want. They need and it’s a tough job. That’s why I said you got to find the person with a caregiver’s heart because you don’t do this for a paycheck. There’s no way in the world you would want the job. It has to be something I believe that they were born with or got raised into.

To corroborate that, we always say, “Hire for heart, train for skill.” We can’t overstate that enough that there are people not born to be a caregiver, nor am I. What I was born to do is be a business owner. If I can bring that opportunity to people who are born to be caregivers and impact seniors who need quality care, that’s the best thing that I can do to help change this. I couldn’t agree more.

The big question is would you be willing to live in one of your facilities when it’s your time?

Absolutely. We used to joke with my dad when he first got into this. We would walk into the home and say, “$4,500 a month to have a chef cook me 3 meals a day. They’re going to do my laundry, brush my hair and get me ready. I want to move in now. Are you kidding? I would love it.” These are luxury homes in great parts of town. My cost of living is way more than that so it would be an amazing opportunity. I can’t wait until that’s my opportunity because they’re beautiful homes. I stand by them.

This may be a little side but I heard that when you’re in the stages, like the Golden Girls where you don’t need someone at your side all the time, it was cheaper and more fun and more life experience to just get on a cruise ship and go from one cruise ship to the other and never get off the ship or never stay off the ship because they were fed. Their rooms were cleaned. They had medical help if they needed it. The ships have it. I thought that was an interesting statement. I often wondered if that was true or feasible. Have you heard that?

I did hear or read an article about a gentleman who lived on a cruise ship for thirteen years. He was in his 70s. That is the cutest story ever because I agree. They have medical attention if they need it, food, a home and whatever they need. They’re getting to see the world so that’s a cool opportunity there.

Some of those cruise ships are pretty damn affordable for what you got. What about regulation? Do you find a lot of resistance when you want to work? If you want to choose a property, is it difficult to find a property that they haven’t regulated you out of?

These are still zoned residential and we created the RAL National Association, which represents all 30,000 of these care homes across the country. If an angry neighbor or an HOA, a county, city or state tells you no, the Federal Fair Housing Act says they can’t tell you no because it’s discriminatory against disabled persons. By the time you need assisted living, you’re considered disabled. You need help getting up, walking and bathing. You have federal protection with the RAL National Association, all that legal backing and power. If anybody tries to fight you, we’ve got your back and you’re going to be okay.

They can’t tell you that you can’t do this anywhere. They’re in residential neighborhoods. There are certain rules. You can’t have one home within 200 feet of another home. There are different distance rules or things of that nature but how many residents you’re allowed to have in the home? There’s always a rule on that based on square footage and points of egress but they can’t tell you no. I have tips and tricks on what to look for and what to avoid but you can do this anywhere.

I was wondering if people had to designate themselves as a church or something to put things wherever they wanted to but you just answered that. You have an association that’ll fight for you or explains the rules to whoever needs to be brought up to speed.

All 50 states have their rules. Some of them are way stricter and some are way more lenient. It’s also important for us because we represent all 50 states. If one state’s trying to pass something, it’s important that we notify everyone because if they pass it, it’s more likely to pass somewhere else. If there’s ever something that’s coming up that we say, “This is not good. Everybody go sign this or petition this.” We get everyone on board to help fight for us.

We formed Texas100.org to have a lobbyist watching the proposed legislation or the rumblings of legislation way before it gets to the table. In your case and our case, the saying is, “If you’re not at the table, you’re on the table.” You have to be represented. If you’re in assisted living, please join the Residential Assisted Living National Association.

It’s at RALNA.org.

If you’re in Texas and you want help, make sure that your house flipping landlord owner finance business doesn’t get regulated out site, go to Texas100.org. We’re going to put all these things in 1000Houses.com/Isabelle. Do you have some promos or giveaways for the people so they can learn more about your weekend events?

Yeah. We do have our three-day training. They happen every 6 to 8 weeks. The next one is coming up and then they happen every 6 to 8 weeks after that. We’ll make sure to put the link with a discounted promo code rate for you there. If anybody wants to gather free information to get started and dig a little deeper, we’ll put a link there for you as well to make sure that you can grab free books or webinars, schedule a call with me or someone on the team to answer any of your one-on-one questions.

Tell us what the events are like. What do you learn at these events?

In the three-day training, everyone who was up teaching with me was past students who were sitting in the class learning just like you may want to. They went out, got their homes up and running and they’re back to teach and train you how to do that. I love that because we are not just talking about a theory or a concept. We’re in the game with you. We’re actively doing this and helping thousands of others to do that. The educators are top tier.

As far as what you’re learning, we go through everything from creating your business plan and raising capital. How to use funding resources for this? How to hire your administrators, caregivers and independent contractors? The four types of ways you can get started in this. The five keys to success. We go through memory care. We go through giving tours to residents, families and marketing. It’s nonstop. It’s everything from A to Z that you need to know how to get started in this.

The main goal of this show was to help people find out what they were going to do to obtain their financial independence. It doesn’t matter to me if you want to do owner-finance housing and call me as a coach or call someone else as a coach that does the same thing I do. My point is to air as many strategies and offer a direction where you can get help so that you can quit the job. Once you quit the job, you’re going to free up about 2,600 hours a year so that you can figure out where you belong in this world, what you’re supposed to do and what you’re supposed to be. How to become financially independent, if not wealthy. If you want to be wealthy. Not everyone wants to be wealthy.

Most people don’t care to be wealthy. What they care about is they don’t want to worry about money. If this is a strategy that appeals to you, or you want to explore it. These are evergreen. When she says next December, we’re in November 2022. I know that you may have to get some updates on the times in the calendar but find something on my show. I crossed over my 600 episodes of exploring how entrepreneurs have gone out and become financially independent, if not downright wealthy.

Find one of the ways. When you narrow it down to what you want, then and only then. Look at a whole bunch of different things but then you narrow it down to what you think you want. After that, you forget about everything else and start drilling down on that one topic. When you’re sure of it and you’ve learned as much as you think you can learn from the internet and the free stuff and conversations like this, then you got to hire a coach. You’re either going to pay the street and mistakes or you’re going to pay the coach.

It is a lot less anxiety to pay someone who’s been doing it that can help you navigate. What’ll happen if you don’t get the right good coach and you need to try to learn on your own, you might fail so miserably in the beginning that you would quit. I almost did that. I almost quit a career that was going to be worth millions and millions of dollars to me over the last several years. I almost quit because I didn’t get a coach and I was trying to learn it by the street. The street was kicking my act.

I had to hire a coach to help me figure out how to quit and how to get out without losing my good name, reputation and credit. That’s what I hired him for, and the guy taught me how to stay in the business for another 27 years. I appreciate everything. If there’s anything I didn’t cover or anything you want to say before we wrap it up, this is the chance. Anything you want to say before we wrap it up here?

I couldn’t agree more. I always tell people that if assisted living’s calling to you, then go all in. If it’s not, if it’s something else, Airbnb or fix and flips or buying with notes, that’s great. Go all-in on whatever it is for you that’s going to get you to your financial freedom number. We need more entrepreneurs and business-savvy people. Get yourself a coach or a mentor that you know, like and trust and who has a great reputation in the industry. For us, it’s an incredible way to cash and have a great impact. My final words will be to do good and do well.

Go all in on whatever it is for you that will get you to your financial freedom number. We need more entrepreneurs. We need more business-savvy people. Click To Tweet

When you’re picking a coach, make sure they’re the kind of person that’s involved and doing what they’re teaching now. It is my thoughts on it. They need to be active. Make sure they’re the kind of person that you want to be on and off the field. If you have reservations about how people are running their personal life, maybe you need to look a little further. Find someone who’s good at the business but is also good off the field so that way you don’t get messed up because there’s no way to unblend them.

You have to figure out what your deficits are and hire around them. I work around it. You can’t be good at everything. I thought that was interesting that you said you’re not a caregiver but you’re in the caregiving business. You’re operating from the top down, but you know what good care looks like. You know what bad care looks like and your goal is to create spaces that provide the healthcare that you would want to be in, and you would want your mom or dad to be in. It’s a wonderful thing. Not to be repetitive but there are a lot of people that are going to need this and there already are. We’re short. We’re behind in handling this problem. I don’t know that we’ll ever catch up.

I don’t know either. We’re 1.3 million beds short and we call it the silver tsunami of seniors. They’re coming and we can’t stop it. It is something to try to figure out how you’re going to ride this wave one way or the other.

Thank you so much, Isabelle, for taking the time to be on. I appreciate you so much. This was interesting. It’s a niche that deserves to be looked at because it’s opportunistic and you can help a lot of people. It’s not just the person in the facility that you’re helping. You’re helping all the family members around them because they worry or they’re having financial issues this is a good answer. It’s good all the way around and I love those kinds of businesses. Win-win all the way around.

If you are out there a little scared of the stock market with things that are going on, you can’t stand to be living off of 1% or 2% CD rates at the bank. I’ve been dealing with private lenders for years and years. I have private lenders that have been loaning me money for 15 years, 20 years and 25 years. Some of them are 30 years. I would’ve had a lot of them at 30 years but that died. If you’re interested in that conversation where you can earn 10% annual interest on your money and have a real piece of collateral backing up your loan, give me a call at (210) 669 4020 or check out Mitch Stephen somewhere. I’m not hard to find. If you can’t find me, you got a problem. Thank you so much. We’re out of here.


Important Links


About Isabelle Guarino-Smith

REIS 556 | Assisted LivingIsabelle 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.


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