Assisted Living: Disaster Waiting to Happen or a Smart Investment?

Transcript

00:00:00
Hey friend, have you been looking at assisted living and you're like, man, it seems like a really cool opportunity, but I'm just not sure if it's the thing that's going to work for me. I mean, there's so many things there that are that seem like they're headaches. They could be a disaster. There's regulations. There's liability. There's all the staffing. Just all of these things that are just kind of weighing on your mind and you're like, I just don't

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know if this is going to work for me. I have owned facilities and operated them remotely in Colorado and Idaho since 2020. And what I have learned through that process is those big scary things. You know, the industry as a whole isn't the thing that is the problem. It's not the thing that's going to stop you from moving forward. What is is going into this without a road map, without a clear path to how you're going to get started. So, in today's video, we're going to go through four areas where people see

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these big disasters and how you can take those and reframe it and help you move forward with success and know that you can have this road map to know where you need to go so you can be successful in assisted living. Hey friend, I'm Brandon Gustafson. I help first-time assisted living entrepreneurs launch profitable purposedriven businesses, creating prosperity, purpose, and peace in their lives. I'm super excited to have you here with me today. I I love helping people like you learn how to navigate this process so

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you know exactly what you should be getting into. And if you need some help and some guidance on that, type in roadmap down below. I'll send you a link to a special program, a special opportunity to work with me and helping you go from I'm stuck, this feels like a disaster to having clarity on how you're going to get started and launch your own assisted living business. Just drop in roadmap down below in the comments and we'll get that over to you. And with that, let's get into today's video. All

00:01:48
right, let's get into it today. So, what I really want to talk to you about today is is assisted living this disaster just waiting to happen or is it like a dream just like this beautiful dream that's going to help you reach your goals, creating that time of financial freedom that you want, having this incredible impact on your community, leaving a legacy for your families. These are all things that I hear from people like you about why you are interested in assisted living. So, I'm going to kind of try to

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help you break down those barriers today and and make this so you can understand how you can shift over to that. So, the first thing that I want to talk through and and like I mentioned at the start of the video, I've got four things here today that are potential disasters, right? And they're the things that people look at and they're like, I don't know if I can get beyond any of this stuff. Now, the first one that I hear and I see from people and I I think this one is definitely real is the

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regulations. The regulations are there, right? But I will tell you regulations, you're going to deal with them when you're in the healthcare world. My nurses, if that's a you go ahead and type in nurse down below, cuz I love working with you. Or if you're just a healthcare worker, just type in nurse down below because you all understand this, right? Regulations are a part of healthcare. But they're not the enemy. Regulations are there for several reasons. One, they're going to protect

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residents. They're going to protect you as an investor. It actually is going to reduce some of that liability, which we'll talk about here in just a second because those regulations are in place. You can move forward with confidence that, hey, I'm in this regulated environment and I know that certain things can and can't happen and I'm following the rules and so I'm going to reduce my liability for that. Those rules are also going to create clarity and not chaos because you have so many

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rules to follow. And you have policies and procedures. And those policies and procedures are going to be kind of tied into state statutes that tell you things that you can and cannot do. Uh the types of things you got to do with like fire drills and documenting care and how to onboard your staff and the different training that they need to have and the different documents that you need to have when you bring a new resident in. all that new resident paperwork that you've got to fill out for them. All of

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these things, they actually create processes for you, create some clarity for you to help you run a very profitable and successful business. What's really cool about this is so many other businesses out there, they look at this and, you know, they they start a business. Let's say it's just not assisted living, it's whatever. I I personally I had a a health coaching business that I had started. It was a franchise business and I I believed uh just wholeheartedly in this. What we did

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is we did functional medicine. So we would help people with like diabetes help them reverse that like change their lives. And it was incredible. And I had joined this franchise and if you know anything about franchise businesses that you know the hope is that they have created these systems and processes for you already. So you can just step in and you can work inside of that ecosystem with established processes that are going to work for you. What I have found is the specific franchise that I had

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started was brand new. Like we were the fifth or sixth franchise. Um, and none of the other ones were doing great, but when I was doing my interview process, I was like, "Oh, it's I mean, everybody's just telling me it's because this is early on. We're going to work through this. Everything's going to be fine." Ultimately, it wasn't. We lost a lot of money. Uh, my brother and I had invested in this. We lost a ton of money and ended up having to sell my personal

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residence, move out. he had to file for bankruptcy just like you know some of the bad things that could possibly happen like the worst happened for us right everything's fine now by the way and I'm just so grateful for having gone through that incredibly hard trial um I've learned a ton from it but what I learned from that is those systems and processes that I thought and hoped would be in place and that were continually being developed just weren't there but in assisted living which I started

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before I got into that franchise business. By the way, when you're getting started, you have to create policies and procedures. You have to do these things. And other businesses, they struggle to do this. I was just listening to a podcast this morning and they were talking about this. The book, The E-Myth Revisited by Michael Gerber is a great example of this. People will spend thousands of dollars trying to create some kind of a structure so they have those standard operating procedures and it's baked in into assisted living

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because you have to have those things when you are trying to get your license. Okay. So, it's actually just an incredible thing. It creates this clarity allows you to have something in place that lets you move forward with your business and you know it just it makes it so much easier for you. It's going to reduce your legal exposure as well. And most of the fears that you're feeling around just all the regulations and things like that, they come from ignorance. They come from not understanding just like the confusion.

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And it feels like a lot. Like your policies and procedures manual is going to be hundreds of pages. Um, and that can feel very heavy. It's something that I help people out with in my programs. So, if you're interested in learning more about those and see which one's going to be a good fit for you, just go to aliquiz.com. We'll have a link for you down here below. You can scan the QR code and get over to the quiz and see which of my programs are going to be the best fit for you. And in there, we talk

00:07:03
about policies and procedures and how to write them. I give you my policies and procedures so you know how you can move forward and have those things in place and it can really help you out a ton with that. The second thing that I want to talk to you about is going to be liability. And the liability that you have um it's real, right? but it's going to be managed through the structure that you're creating for your business. Basically, what happens here is you're going to have proper entities that are

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just going to shield you from that liability, your personal assets. I I'm not an attorney, so go talk to one. Please, please talk to an attorney, but I would suggest that you have entities around your real estate, around your operational business, that you have a really tight structure, that you're managing your finances so you don't pierce the corporate veil with these things. So, you put yourself in a good position. It's going to help shield you. I I highly suggest that you never start

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this business in your own name as a sole proprietor using your own social security number. Avoid that like at all costs. You do not want to do that. Make sure you have at least an entity, at least one LLC in there. I I recommend doing two, one for property, one for the business. Uh, I think it creates an added degree of separation in case issues do come up, but having that is going to help you out a ton. The second thing is going to be insurance. The insurance that you get is going to transfer that operational risk. You're

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going to need three types of insurance, by the way. One is your property insurance. The next is your liability insurance. And the the third one is going to be workers comp. You need to have all of these. And the best way to find that insurance, by the way, is to work with an insurance broker that works with commercial properties. If you find one that has experience in assisted living, that's just an added bonus. But you want somebody that understands the commercial landscape of businesses and

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helping you get the proper type of insurance that you're going to need for that. They'll go out, they'll help you find the best rates, they'll help you get everything that you need so you can really catapult that into just sustained coverage. you're going to have to renew this on an annual basis, but when you are doing your licensing process, if you decide you want to work with Medicaid, there's so many areas, different vendors and things like that that you need to have this insurance in place and it

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protects you. I have had an experience where we actually have used our insurance workers comp several times and also our liability insurance with an incident that we had with our resident. If you're interested in learning more about that, type in insurance down below. I'll do a video that's kind of more specific around insurance and why liability insurance is so important and a little bit of our experience working with that and why you need to have that in place so that you can be successful.

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The policies as well, like we were just talking about the policies that you're creating and that's it's part of the regulations that are there, but those policies and procedures, those standard operating procedures that you are creating are shifting that liability away. And actually, when you create those things and you have them in place, it's going to help reduce some of the rates that you have, some of those insurance rates, because an insurance carrier is going to look at that and

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they're going to be like, "Oh my gosh, yeah, they've got all these systems and processes in place. They know what to do when they're hiring somebody. They're doing background checks on their staff. They're they're doing this whole intake process to bring new residents in. They know how to to handle those situations. So, we have an added level of confidence. And so, uh, maybe the first time you get insurance, your rates aren't going to be super low just because you're a brand new business. But

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as time goes on and you show that you're good and you already have these established policies and procedures and they can see that they're working, they're going to have a lot more confidence in working with you and giving you reduced rates, which is just an added bonus of this. Those systems really do protect you and that's going to help you out a ton as you're trying to get into this business and trying to make some progress there. Now, the third concern that I see from people is

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staffing. And staffing is I mean, it's your biggest expense. Um, you're working with people. This is the thing that when I was getting into assisted living, I honestly thought that my biggest problem was going to be filling the beds. And that has not been the case. Staffing has been the biggest issue because there's just so much turnover. Just the nature of this business. They're not high paid, highly trained individuals who are providing this care. And some of them, if they can get an extra dollar an hour

00:11:19
somewhere else, they'll just quit. and not just like here's my two weeks notice, they'll just stop coming in. And that is something that is very frustrating as a business owner. But what I will say is having systems and processes in place that are going to help you out with your staffing make it so much easier. When you have a structure there, it's going to make your life that much easier. If you're interested in learning more about just kind of the process of hiring people,

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type in staff down below and I'll either get you a video link to a past video or we'll do a separate video that's specific to staffing. But when you have clear standards on the process that you're going to bring people in to hire them, when you have clear standards on who you want to hire, the skill level that they have, how they're going to fit into the ecosystem that is the assisted living facility, it's going to make your life that much easier. So, you have these clear standards for the type of

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care that they have, that maybe it's the type of certifications that they have. And when you have those standards and then you're hiring to those standards, it's going to make your life that much easier. culture. The culture that you create inside of your facility is also going to create an atmosphere where you can recruit and and bring people in. It attracts really good, strong caregivers. And when you don't have a good culture there, you're going to see a lot more turnover. Now, we went through a shift

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about a year and a half ago in our business in Idaho, and we have seen a significant reduction in the amount of staff turnover that we've had, and that has been incredible for us. It it stabilizes things. We pay a little bit more for our staff now because of that, but we're fine with that because it's been stabilized. We have staff that are happy. We have people that are consistent for us and we know what to expect and so do our residents. It just makes it a much better situation for

00:13:06
everybody. The training that you offer to your staff also is going to reduce that turnover dramatically because it shows that, hey, I'm pouring into you. I I really want you to be a part of our team and we want to help you out as you're trying to, you know, do your job and do things that you really are passionate about. And so the more that you can train people, the more continuing education type courses that you have, which are things that they're going to have to meet anyways, but when

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you have that, it makes them feel comfortable, makes them feel loved, it makes them feel wanted. And when you can create that atmosphere for your staff, it's going to take the whole staffing thing and and make it so much easier for you as you get into this. Your leadership is going to determine how stable your business is. And the more that, and this does not mean, by the way, that you have to be administrator, that you have to be super active, that you have to be there all the time. I'm

00:14:01
not there for my facilities. I live out of state and we have established processes with our staff that they know how to get in contact with us if they need it. But we make sure we have very strong administrators that can handle big questions, can handle most situations and we give them the autonomy to run the business the way that they feel like they need to. And we set parameters and we set goals and things like that that are more financially driven because if we didn't then, you know, we we probably wouldn't be a

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profitable business. But when we do those things, we are able to see that there's a lot more success in the way that we are helping people get through this. Now, the fourth one that I want to talk to you about is underwriting. And I have a free underwriting calculator for you, by the way. If you just go to assistedlivinginvesting.net/cal, just type in calculator down below. We'll make sure you get you the link so you can go grab that free underwriting calculator to help you out along your

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journey to to launching your assisted living business. But when you do underwriting the right way, it is going to remove emotional decisions. So, let me tell you a bit of a story here. When I was getting started, I live in Utah. And long story short, ultimately decided I was going to buy an existing facility. And if you want to hear the whole story, type in road mapap down below. We'll make sure we get you a link to our next roadmap challenge. I tell you the story in depth in inside the challenge. But we

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decided we were going to buy existing facilities. and I looked for a facility in Utah cuz that's where I was at that point. I was not interested or interested is maybe a strong word. I wasn't ready to operate out of state. I hadn't even thought about it. Uh ultimately I did and again type in road map. We'll tell you more about that that experience and how I got to where I am today inside the challenge. Anyways, so what I found was a home in Draper, Utah, which is the southern end of the Salt

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Lake Valley in Utah if you've ever been to Utah. And it was just this beautiful home. It was just huge. which was an assisted living mansion. You know, if you've seen something like it, it was exactly what when I had been looking at assisted living, it was exactly like what I thought this is going to be like. It was multiple stories, but it had an elevator, just a beautiful home, huge. I can't remember how many beds it had between 10 and and 15 somewhere in there. And like my dad and I, who my dad

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is my partner on these deals, we were like, "This is going to be awesome." So, we get ready to go and look at the facility and co happened like I had just gone to IKEA with my family and we were which was over by where this facility was and so we were going to go drive by it and look at it and then the next day I was going to call and and set up a time for us to actually go in and tour the facility. That night is the night that Rudy Goar who played for the Utah Jazz at the time tested positive for

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COVID and the NBA shut down and like the world at that point kind of shut down and you know you're not going back to work and so the opportunity to go and and actually tour this facility was significantly reduced cuz nobody knew what to expect, right? So, we're getting there and I go and I I I I'm just like, "Ah, crap. We're not going to be able to go actually tour this facility." And I I have to say, I think this is an incredible blessing for us that happened because had I gone and looked at it, I

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don't know that I could have walked away from it. But not being able to go and see the facility allowed me to spend a lot more time looking at the numbers. And for us, the way that that house was set up and um just what I probably didn't know, I I right now I probably could make this a lot more successful and I think I'd be fine. But at at the time, looking at the numbers, they just didn't make sense for us. And so I got us out of being in a in a position that I think probably would have lost us a

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significant amount of money because I took a step back and I looked at the numbers. Underwriting, spending time doing your underwriting is one of the most important things for those of you who don't know how to get started. What you should be doing is spending time doing underwriting. So type in calculator again down below in the comments. We'll make sure we get you a link to the underwriting calculator so you know how to do this and how to really hone in and see if this is going to make sense for you financially cuz I

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don't want you to just run into this and be like, I watched a YouTube video. I can make $10,000 a month. I can do all of these things and it's going to be great. When in reality, you have a two or a three-bedroom home and your pathway to profitability is so diminished that you're not going to be successful. Make sure you run the numbers. Make sure you understand them before you jump into this. It will save you so many headaches. It will save you so much time. I shared the story about the

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franchise business earlier in this video. And a lot of that is when I did my underwriting, I had rosecolored glasses on. I thought, hey, the I mean, I I spent time underwriting. I love numbers. If you go grab the calculator, you'll see that it's very robust. But you have to be realistic as well when you are running those numbers because if you're not you may get yourself in a bad situation situation like I had when I did my franchise business where you lose everything. Everything is a little bit hyperbolic

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but uh you lose a lot and it's really hard and I don't want you to go through that pain because I've been there and I know what that is like. So, I want you to to avoid that. And that's why you need to be doing your underwriting and understanding these numbers because when you do that, that's where you're going to see if there's actual quality here in the deal. If there's if you're going to be able to hit your financial goals, if you're going to create that time and

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financial freedom, or if you're just creating something that's just another job that you're slogging through it to not make that much money, right? Not saying that you can't make a ton of money, but if you put yourself in a bad situation, you probably won't. So, you need to spend time doing these things. Be conservative in your projections. Don't get those rosecolored glasses like I had. Probably what I would have done with this home in Draper is have those rosecolored glasses. Oh, yeah. We could

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easily raise the rates up, you know, double them or um you know, we could yeah, they're right now they're at 60% occupied. We'll always be 100%. You never want to make those assumptions. You always want to be conservative in your underwriting so you can see worst case scenario what happens and the cash flow that you create in this business is going to reduce that downside risk. So the more time you spend looking at the numbers and understanding exactly what those numbers are saying to you, the

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more confidence you can move forward that you you always want to be looking at and making sure that you can at 80% occupancy hitting your income goal. If you can do that, then you're going to be great. So, if your income goal is $10,000 per month, you better be able to do that at 80% occupancy because that means your break even point is probably somewhere between 60 and 70%. It's a lot easier to handle. And then if you are up at 100%, then you're killing it and you're making really good money on this.

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So, you need to spend time, pay attention to the numbers. It's going to help you out and reduce your risk as you're getting into this. The more data you have, the more you understand that data, the better off you're going to be. So, make sure you spend some time doing that. And my focus framework that I teach people, focus is an acronym, by the way. It's a five-phase process for launching an assisted living business. It's foundation first, optimal property selection, capital and funding,

00:21:20
understanding the rules and regulations, and having a strategic launch. I teach that inside of my programs. Go take the quiz. Again, we'll have a QR code down here and the bottom, aliquiz.com. Takes you 30 seconds. And see which of my programs are going to be a good fit for you. But if you're just like if you're listening to this and you're like, I do want to do this, but I need some help. I need some guidance and I don't want to make mistakes. I I'm here to help you out. Like that's what I'm here for. Make

00:21:46
sure you like the video, subscribe, ring the bell, all of those things because that's what I'm going to be able to do here on YouTube. But if you want some like real guidance to help you go from I'm stuck and I don't know how to do this and I feel like this is going to be a disaster to I've realized my dream and I have the time and the financial freedom that I've been looking for and I I have all of those things that I want to have. I'm here to help you out and I would love to do I love coaching people

00:22:11
and I would love to help somebody just like you as you're trying to figure all of these things out and navigate your journey to the point that you feel confident in where you're at and where you're going. So go take the quiz aliquiz.com. We talked about a lot today in this video by the way. So let me quickly recap. We talked about some of those big disasters that you might come across. You know, we talked about regulations, we talked about liability, we talked about staffing, and we talked

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about the underwriting process. And if you can get beyond those things and turn those doubts, the potential for disaster into confidence and clarity, that's going to help you out. When you have a framework like the focus framework to help you move forward and launch your business, you're going to be a lot more successful. Now, I've talked about this a little bit throughout the video today, but I would love to see you in my next Roadmap challenge. If you go to roadmapchallenge.com, you'll learn a

00:23:03
little bit more about the program or you just type in roadmap down below. We'll get you the link. Would love to see you inside of the challenge. It is a live coaching experience. I love doing it's helping you. It's getting your questions answered and if you get a VIP ticket and you can come in there, you can ask me whatever questions. that can help you out, help you get unstuck, help you take some of those potential disasters and move them away so that you have confidence to move forward with it. So,

00:23:29
go check it out. Type in roadmap down below. We'll get you the link. Would love to see you in there. Are you curious about assisted living, but you're not sure how to get started. At assisted living investing, I help first-time assisted living entrepreneurs launch profitable, purpose-driven businesses, creating prosperity, purpose, and peace in their lives. I would love to help you out as you're trying to launch your own assisted living business and help you along the path, help you get to where you want to

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go. Check out the links down below as well. We're going to have a few resources and things like that in there, including my book. So, go check those things out. Take the quiz, aliquiz.com. And remember, it just doesn't take a lot. Just a little bit. Just keep going step by step by step. And I promise you, if you do and you are consistent and persistent, you are going to be successful. Thanks for watching and have a great day.