I Sold My Assisted Living Facility: Here’s What I Learned

Transcript

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Friend, it's Brandon Gustafson with Assisted Living Investing. Excited to have you here with me on the channel today. Um, today we're going to be talking about I sold one of my assisted living facilities. Um, so really excited to go through that with you. Uh, share that experience. Uh, what it's been like owning a facility. Uh, what it's like um, to sell a facility, why I sold a facility, what my plans are uh, in the future, and uh, share a little bit of this information with you. So, if you're

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interested in learning more about that, make sure you stick around for today's video. Um, make sure you uh like the video and subscribe so you can get notified every time we put out content like this. and uh you can you know get notified every time we uh we we do uh I'm on here regularly uh helping you out uh through your your um your journey of launching your own assisted living facility and excited to to be able to do that here with you. If you um are new to the channel here um make sure you go and

00:01:04
grab your free business plan checklist at assistedlivinginvesting.net/bp checklist. Uh, it's I I coach people. I help people just like you. I help beginners launch their assisted living business in the next 12 months. I love doing that. It's one of my favorite things to do and would love to be able to to help you along your your journey. Um, so make sure you go and grab that free business plan checklist. Again, it's assisted livinginvesting.net/bp checklist. that'll get you uh the

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checklist and and you can be on your way to to making some progress to launching your own assisted living business. So, uh I'm going to go ahead and share my screen. Uh again, we are talking about selling one of my facilities. For those of you who do not know who I am, my name is Brandon Gustafson. I have owned and operated assisted living facilities since 2020. I've secured over $1.5 million in SBA funding. I've actually gone through the process on three SBA loans. So I understand that uh what that

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uh means. I operate out of state. So I live in Utah. I've operated in Colorado and in Idaho and I have been doing this you know as I mentioned for since 2020. Uh so I have a lot of experience with it. I also have a masters in healthcare administration have worked in the healthcare industry since 2011. Um so I have a lot of experience just uh educationally, professionally um and then just hands-on working in assisted living. uh and would love to to be able to help you out on your journey. If

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you're new here, make sure you type in newbie down below. I love uh when we get the new people that are watching here. Uh so you can just I love seeing uh when when people are on here. I would love to recognize you. So make sure you type that in down below if you're new. Um, so I'm going to give you a little bit of background on my story, how I got into assisted living, so you kind of know where I'm coming from, how I got into this, and uh what where it led me to buying my first facility and and now

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selling that facility and what that looks like. So I um on I actually remember the day very specifically, June 9th of 2019, uh so this was uh you know quite a while ago. Um I was it was a Sunday. I I woke up. Uh my daughter, my youngest daughter at the time was about a year and a half old and uh she was sick and uh so we I stayed home from church with her. My wife had to play the piano or or something. She had to she had to go. So I stayed at home uh from church, stayed at home from family dinner, just hung out with my daughter.

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And year and a half, she's not doing much. You know, we have Daniel Tiger on or something like that uh in the background. And I had some time. So, I had I looked on my Kindle app and I had purchased um Rich Dad Poor Dad I don't know how long before uh probably several years and I was like, you know, I'm going to I'm going to read it. Uh so, I got through it. I read it in one day. Uh I and I got done with it that night and I remember sitting there thinking to myself, man, I've got to figure

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something out like I've got to figure this out. I've got to figure out how to do it. I went to a Rich Dad uh poor dad event um about a week and a half later and uh didn't stay the whole time. I could see the the back of the room, you know, kind of getting ready to to to do some selling and it was actually my anniversary. So, um I I left. Um but I I still really wanted to get into it. Still knew that that that real estate was what I wanted to do. And as I started diving into real estate podcasts

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and and trying to understand how to invest in real estate and what that would look like for me, uh that's when I started stumbling up upon uh assisted living. Jean Garino was uh was really active in the space at the time. This is before he passed away. He was on a lot of podcasts and doing a lot of um uh advertising on some of the real estate podcasts that I was listening to and and things like that. And uh so I started kind of going down this path down this path and that's when I found Serge

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Leescu as well um who was just getting started with with YouTube at that time. And uh I I started you know this makes sense. I've got a masters in healthcare administration. I've worked in healthcare for for a while now. Um I'm interested in real estate. this is a great way for me to blend those two things and and really kind of make some progress and get to to where I'm at where where I want to be uh in in the way that I invest. And and so that's how I started getting interested in in

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assisted living. Uh at that point, I I I I really thought the only way to do this was converting a home. I really thought the only way for me to get into assisted living was I'm going to have to buy a house. Uh I'm going to have to renovate it. I'm going to have to convert it. I'm going to turn it into assisted living. You know, that's what I had heard a lot online. And so that's what I started looking at. I started looking hard and going out and talking to different municipalities and just cold calling and

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and reaching out to to realtors and going and looking at houses and trying to explain what I actually wanted to do. And I I didn't have a lot of that experience at that point. Um I I was really just kind of fumbling my way through it. I knew I I had this dream. I had talked to my dad. he was willing to work with me and and help me fund um the opportunity, but I didn't know what I was doing. I really didn't. I I was I'm and I had spent a ton of money um uh 20 plus thousand on education for real

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estate. Plus, I had done grad school, so you know, 60 80,000, however much that was. Uh just a ridiculous amount. I've spent a lot of money on education. Um and I could not justify paying money for another program. uh and uh that that's just where I was at that point in my life. I I had spent a lot of money. I had taken massive action and I I knew I I was going to be successful. I just didn't know how to do it yet. So, I was watching videos and and trying to gather all this information.

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And that's as I was going through that, I reached out to um I I I had a conversation with a mentor of mine um through part of that education uh that I had paid for. And you know, he he's like, "You you've just got to do assisted living. You got to figure out how to do it." And gave me a few ideas on who I could reach out to. And I I had a conversation with um uh with a guy who does some financing, and I can see his face, but I'm I'm blanking on his name right now. I'd love to give him some

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credit. Um but uh I reached out to him about the idea of buying an existing home and converting it and how to get funding and what that's going to look like. And he said, "You should just buy an existing facility." And I was like, what's that like? I've never heard of that. What what what does that process look like? How do I find these things? And that's when I started um looking at existing facilities on tools like Loopnet and Bisby by CELL, Crexy. Um and those are great resources to help you

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find and identify opportunities. Uh so that's a short version of how I got to that point. um through a series of uh of relationships and things that I had had from um previous courses and and things that I had paid for uh that I was a part of, uh I was able to develop a relationship with a broker uh that that specializes in assisted living. His name is Charlie. He's based out of Denver. And um Charlie helped me find a home in Colorado Springs uh in Colorado that was for sale. and we started working through

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that and and ultimately we purchased that facility in September of 2020. So I went from uh reading Rich Dad Poor Dad in June of 2019 to September of 2020 owning my own facility. Now there between in that 15-month gap, I had paid for a lot of real estate education. I made a ton of progress and and took a lot of action. So you can see just from that that's a 15-month process. That's not how long it took me to close, you know, from when I made all the decisions, but that's the pathway that I

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went on. So, it it can take a while. So, I tell you, you know, as you're trying to to work and and help and figure these things out, I help you over the next 12 months, launch your own assisted living business. And it can take that long. You can definitely do it faster, but it can take that long because depending on where you're at in in the journey, you're have to learn a lot. You're going have to make a lot of mistakes. You have to keep making consistent and persistent action. It's how you're going to get

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there. And it will feel like at times that you are not making progress. It it will absolutely feel that way. But if you keep doing it, keep making progress, and keep pushing forward, then you're going to be successful. And that's what I help people do. So, go check out assistedlivinginvesting.net. Uh would love to help you out with that. I have something here at the end of this video. uh a program that uh you can join uh and and get access to me as as you're trying to make some progress on this. So

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uh but go check out assisted livinginvesting.net uh to turn a little learn a little bit more about that. Now let me get into working in Colorado and kind of what that has been like. We started this facility we started that facility in in 2020. We purchased it in September of 2020, which if you go back and think about when when that was, this was the middle of CO, right? This is this is CO um where the year of COVID um everything had kind of shut down earlier in the year, which is a part of what

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allowed me to maybe do this because I had a little bit more time on my hands, shifting to to working from home. But it was like finding money, getting getting a lender to work with you, finding opportunities that were there, being able to do the due diligence when when you have a house that you can't go walk through because of COVID restrictions. Like there were a lot of barriers that were in place that that made it hard to do this, but I pushed forward and we did it. So we started this in 2020. The

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house that we had there in Colorado was um mental health focused. Um and it was uh just something that I had never thought of getting into. Honestly, when I thought of assisted living, I thought of elderly care. That's all you can do, right? And and that's that's what it's going to look like. And for me, um finding something that was mental health um related was actually really cool. I had I had some experience working in mental health um previously throughout my professional career and that was

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something that was a little bit familiar to me but also um near and dear to my heart and uh something that uh I have grown to love. Uh we we serve a population there that typically deals with bipolar um disorder or schizophrenia and working with those residents is one of the most rewarding things ever. Like it is so much fun to work with them. Um, and something that I will miss now that we've sold this facility. Um, but I also was operating out of state. You know, I lived in Utah. This was in Colorado Springs. It's like

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a 12-h hour drive. I could fly there and then drive fly to Denver. Typically, it's a little bit cheaper to fly to Denver from Salt Lake and then drive to Colorado Springs, which is an hour, hour and a half, and get there. And I can do day trips there. So, it's was close enough to do that. I did it a few times, but um it was uh you know, trying to figure out how am I going to do this? how I'm going to operate out of state. Um, which was difficult and and something that I came to enjoy doing. I

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think actually it was a really good thing for me to do because it allowed me to trust other people and and delegate and not micromanage uh because I just had so many other things going on. So, that was helpful. The other thing with this house is it was old. We I have a tour of this house on YouTube, so you can go check that out. Um, but it is a four-story building. We we did a huge renovation on it um earlier this year. Maybe it was last year, I can't remember. Um, but big renovation. We had

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a million-dollar grant. Did a ton of work on it. It's really cool. Um, but it's old. Uh, built in the 1890s. It's four stories. Um, a lot of stairs. And that has an impact on your ability to bring in residents. They have to be able to do stairs if you're going to have them in a home like that. if they can't, you can't have them there. Like, it was a a limiting um it really limited our ability to bring new residents into the home, which was which was a bit of a struggle. That was what it was like for

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us working in Colorado. This picture, by the way, this is Garden of the Gods. Our facility was like maybe 2 miles from it. Um beautiful place. And I think that's Pikes Peak in the background, which is one of the the taller um peaks in the United States. Um and I think it it's definitely the tallest in Colorado. Um, but it is uh just like beautiful. I love going there. One of my f favorite places to visit. Um, but running a business in out of state, specifically in Colorado, was was pretty difficult. I'm going to

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share with you uh some of the good pieces of of this of of working here, caring for the people. Um, it it is if you are looking at getting into assisted living, um, you need to realize that you are doing this to care for people. like that that's one of the big things that you're going to be doing. I really hope you have a passion for it. As much as this can be a lucrative investment for you, it can be uh something that uh you know can help you do well for yourself, there's a lot that goes into it and you

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have to have a passion for caring for the people and uh helping them and helping them make progress and making sure that they have their needs met. it is a requirement um number one but it also uh it is the best part about being in assisted living and why um probably why you're watching this video why assisted living speaks to you because you love the idea of caring for people and that could be something that is uh you know you have a loved one or a family member or friend or somebody else you have some kind of a connection and

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you have experienced something bad or you know how hard healthcare is to navigate because of that experience that you've had and that's what's kind of pushed you to assisted living. And that's that's very common. And so, you know, if that's you, like my video because that will help other people find this. But it is uh it's something that um you just have to understand that you're caring for people. You have to have this this kind of heart of uh just the ability to care for people and you

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have to be passionate about it or you won't be that successful with it. If this is just a money play for you, it's it's probably not the best fit for you. There's a lot that goes into it, you need to have that that other driving force there um with it, and that's that's caring for the people. Um I ca I came into this uh as far as understanding the process. I had a masters in healthcare administration. I worked in the healthcare industry for about a decade at that point. Um I knew

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a bit of what I was getting into, but there's a lot of regulations. There's a lot of things that you have to understand. um as you get into this and you have to understand what that process looks like, but once you figure it out, it's so much easier. Um and so there's there's a definitely a learning curve there. Um and it it can be hard and and same thing with Medicaid. These things can be really hard to learn to understand how to take advantage of those programs in a good way um and help

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you and your business um while you're helping other people and caring for them. And as you come to learn those things, man, it's it's it's very rewarding. It's fun to kind of like level up your knowledge um as you go through this. But, uh it's it's it's difficult. Running a business is difficult, but I've learned so much since I started this business. It is uh it's it's been oh man, it's been an incredible journey. Um and I've learned a ton. I wouldn't trade it for anything.

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Uh it's been incredible. Um so that that's been awesome. And then I've also learned how to get grants. I I had worked for nonprofits previous to this and had worked as an analytics expert um on big multi-million dollar grants, but I had never done it myself. And through working um here at at this facility in Colorado, uh we secured nearly, let's see, it was about uh $1.4 million in grant funding for projects for our facility. And that was um that was really cool to learn how to find grants

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and apply for them. Um grants are hard and uh they while they are free money, there's a lot of work that goes into them and there's just like that the tax implications of it and um understanding how to utilize them is something that is difficult. So that's that's something I want you to to keep in mind there as well. But those were good things. It it was great. Now, the bad things is what I found out is it costs a lot of money to run a business um like a lot of money and it can be hard and so and it's

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stressful. So, you have to um have a good financial management system. I've got uh a link down below for profit first or at least I should um or how to grow your small business. businesses are books by Mike Mallowitz or um uh what's how to grow your small business is by another guy and I can see his face and I can't remember his name either. Um but great great books um that I highly encourage you to to get into and understand. Donald Miller, that's his name. Um and uh you have to understand

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the finances of the business because it is a lot of money. Staffing is it's an issue inside of assisted living. There's high turnover. You have to deal with a lot of different personalities. It's difficult. Staffing is a headache. It's really hard. And that's something that you're going to have to navigate. And not only is that with your normal caregiving staff, but with your administrators. And and it there's a lot of stress that goes into those positions. Um and that can be hard. And

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the other thing is having a low census. So, this is where I talk to to people like you in our lives and in my videos and I tell you, you know, small facilities, six beds or less, it honestly doesn't make a ton of sense to do something like that because your census is so small that um it's it's like if you your your uh the amount of potential residents you have is so low when you have that amount. when you have you're missing one or two residents. We talked about this in our video last

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week. Um all of a sudden you go from cool, I'm making a few thousand dollar a month to I'm losing thousands of dollars per month, tens of thousand dollar, tens of thousands of dollars per month. And having a low census because it costs so much to run this business. Um and the amount of money that somebody pays you is such a large amount, you can have large fluctuations. And so dealing with a a low census is really hard. It can have a a big negative impact on your business. Now, having a high census can

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have a huge positive impact and you can cash flow really well. But like real talk, having a low census is really hard and something that you need to plan for when you are underwriting as you're getting started. You need to understand what that's going to look like. Um, and don't plan. don't have rosecoled glasses on and say, "Man, I'm always going to be 100% occupied. I'm always going to be 80%." Yeah. Always, no matter what. When in the reality is you could have a

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period of time because I've done this. I've had this this experience before where you are at 50% occupancy for 6 months and that will kill you. Like it it's hard. Um it will it it it makes it really hard to run the business. So you have to understand what that you have to plan for it. You have to take all of that into consideration. And uh you know if you if you don't do this the right way, you can get yourself upside down very quickly. And and so that's something that I want you to be aware

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of. Like I I don't want to necessarily scare you. Um because you can be successful. You can make a lot of money. I just want you to make sure you are planning and don't get yourself in a position where you're just like, "Oh, yep. assisted living is what I want to do. I know my mom needs it. I'm going to do it for her and then I'll figure it out later. And then your mom passes away and maybe you're not as passionate about the the facility. And then you let your senses drop and you you're 60% occupied

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and all of a sudden what became a passion project is now something that is losing thousands of dollars per month and uh making putting an immense amount of stress on your family and and and your personal life. So, you have to take all of these things into consideration as you get into this. It can be hard. Um, so that's that's what I've learned. So, I just I want to be transparent with you as you're trying to uh figure out if assisted living is right for you. It it 100% can be and it is it's so rewarding

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and I think it's worth the risk. I'm very bullish on the industry. Um, but you have to be aware that it's not all sunshine and roses. There's a lot that um that goes into this and it can make it really difficult. So, what did I learn? Um number one, you need to build some kind of a contingency fund uh for when you have that low census. You need to to have the money put away so that uh something bad happens, you have the ability to float and uh and make it through that. Um one that I don't have

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written on here is relationships are key. They're absolutely key. You have to build good, strong, and solid relationships in your communities where you are so that you can have a good referral source and and and stream of new residents coming in when you have occupancy available in your beds. Um, you need to be very conservative in your underwriting as you're getting started. You have to spend time. You have to stress test it. You have to make sure it works. And when you do those things,

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then you're going to be a lot more successful. But um you you have to be conservative and don't get all caught up in the the awesome potential here. You have to make sure you take a step back, take a breath, stress test it, be conservative. And when you do that, um you're going to have a lot more confidence. Uh this is I I learned this from personal experience. My Colorado facility, we kind of jumped into it and I thought everything would be great and ultimately it was fine. It was it was

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good. But uh when when I spent more time stress test things a lot more um did more market research, did more on the underwriting for my facility in Idaho, it has been a whole lot more successful there. Um the other thing is you need to hire slowly, take your time, especially for your administrator position. Take time to find the right people and if it's not a good fit, you need to fire quickly. This is something we probably didn't do as as good a job as we should have. And had we um let our

00:24:21
administrator go um despite how much I love her. She's she's incredible. Uh we probably would have been more successful had we u made that decision to to let her go um a few years ago. I I think things would have been different for us, but you live and learn. Um and and that's where we're at. So I would say hire slowly, fire quickly. Um, don't get yourself in a bad situation because you don't want to hurt somebody's feelings. Um, it's hard. You're dealing with

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relationships. You're dealing with personalities. It can be difficult, but it's probably one of the best pieces of advice I can give you there. So, this is the question you are probably watching this for. Um, is it really profitable? And the answer to that is yes, it absolutely is. But you have to keep that occupancy high. uh if you have a vacancy in your facilities, all of a sudden you shift from making a lot of money to not making a lot. And that's where having multiple facilities can help an

00:25:18
incredible amount. This is something that Jingerino, as I was getting started, um he he put out this this thing about the three-pack. He had a bunch of videos about it having three facilities all in kind of this tight packed area. And I don't I think doing that is a great idea. I I really do. I don't think they necessarily need to be in this tight packed area or anything like that, but having multiple facilities, having a facility in Colorado and one in Idaho has saved us um several times. Having multiple

00:25:45
facilities, uh being able to bounce ideas off of of different staff, um being able to have a lot of income from one, maybe cover some of the the big expenses of another for a few months, those types of things, it is so helpful. So, um, and also the more beds that you have, the more ability to be profitable. Um, so six beds, we talked about this in our last our video last week, makes it really hard to be profitable. 10 beds, a whole lot better. 16 beds, now you're now you're talking. Now you're going to

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you're going to do really well for yourself. So, as you are trying to figure these things out, the more beds you can have, the better off you're going to be. So 100% can be profitable. Make sure you take your time. Make sure you understand um what that variance in occupancy could do to you and how long you might be able to to withstand some of those storms. Um and what that's going to look like for you. Um that's that's what I'm going to tell you is can be profitable 100%. Make sure you take

00:26:47
some time though um and make and make sure you're doing this right. So if you need some help as you're going through this, you're just like, I'm confused. I don't know how to get started. I don't know what steps to take. I have questions. I don't know what to do. Consider joining ALIA Basics. I would love to have you. This is the the cheapest way, the the the least expensive way for you to work with me. Uh there's no application. Just go over to assisted livinginvesting.net/basics.

00:27:11
Uh go join there. Uh we do monthly member only calls. You get a bunch of resources. You get priority answers when we do Q&A calls like this uh on our live sessions. So, make sure you go check that out. Assisted livinginvesting.net/basics. /basics. Would love to have you join uh get you in there. You can ask me questions and things in our in our inside of our community and I'll help you out as you are trying to make some progress and launch your assisted living business. So, go check that out. Now, I have three

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minutes because I have another meeting that starts um for Q&A. So, I'm going to pop over here really quick um and see. We do have a comment. Um Daniel Diaz um my buddy from Chile um is on here. That's awesome. Uh, love seeing you. Um, if there are any questions on here, make sure you chat, uh, chat those in. Um, and, uh, we'll get to those. While you're chatting, while you're typing those up, though, I want to remind you to like the video, subscribe, and ring the bell. Uh, so you get notified every

00:28:09
time we put out content like this. Um, I I go live on Tuesdays, we put out content like this on Thursdays. Love helping and coaching people. It's one of my favorite things to do. I I really enjoy it. Uh, so make sure you do that. go grab the free business plan checklist, assisted livinginvesting.net/bp checklist. Um, and you can get answers uh to, you know, get get access to to that free resource there as you are trying to make some progress and uh figure out how to launch your own assisted living business. Uh, it's

00:28:38
something that that's a lot of fun um to to be able to do. So, with that um because I'm I'm stalling just in case people are typing in questions. Uh, I want to make sure you get them, but I do have to hop off for another call here. So, uh, I can only stall for so long. I do want to thank you for watching. Uh, thanks for being here. Make sure you go and grab your free business plan checklist, assisted livinginvesting.net/bp checklist. Um, does residential sound does residential assisted living sound

00:29:09
interesting to you, but you don't know how to get started? at Assisted Living Investing. I'm here to help beginners like you launch their assisted living business in the next 12 months. I love helping and coaching people. It's one of my favorite things to do. I I really do. Um I would love to help you. So, make sure you go check out assisted livinginvesting.net. And um just remember, 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

00:29:33
persistent, you are going to be successful. Thanks for watching and have a great day.