Unlocking the Secrets to the Perfect House for Unlicensed Care Homes

Transcript

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Hey friend, I'm Brandon Gustafson with Assisted Living Investing. I help beginners like you launch their assisted living business in the next 12 months. Super excited to have you here on the channel. Today we're talking about unlicensed care home secrets. This is something I have seen a lot of people commenting and questioning about um here on the channel in the community on Facebook um over on YouTube and comments. And so I wanted to to get this out to you uh because I think this is going to be helpful. Uh there's a lot of

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people that have questions about this and and they want to know what this looks like, how it works, and I think we're going to uh have a really fun conversation. For those of you who are new here, um welcome. Uh love it when there are new people here on the channel uh and and that are watching with uh go ahead and type in newbie down below. Uh it lets me see who's new here and and who uh needs some help. And uh we'll make sure that you have some access to some free resources which you can

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actually do if you go to assistedl livinginvesting.net/bvpch checkcklist. You can get access to our free business plan checklist. Uh go grab go grab that. Go get access to it and uh that will help you uh along your journey. Uh what you need to do, one of the most important things you need to do is build a solid business plan. And the the business plan checklist is intended to to be there to help you and guide you as you are trying to to get things started uh from that standpoint. So uh make sure you go and grab that tool,

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that free tool, and it will uh help you and give you some guidance as you are trying to get started there. Um so with that, I am about I missed one thing on on my Facebook uh group post here. Let's get that on here and then we will get going. Um, I want to apologize also for those who uh were expecting something last week. I was on on family vacation, first one in in a really long time that was like that long and had a really good time up on the Oregon coast. So, uh, if you have been there, uh, type in Oregon

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down below. Uh, would love to to see uh, who who's been there. We had a really fun time staying in Lincoln City. Um uh which was it was it was great uh a lot of fun. Okay, now with that uh let's go ahead and jump in. Um I'm going to share my screen and we will start talking about this. So unlicensed Care Home Secrets. Um for those of you who don't know me, my name is Brandon Gustafson. I uh have owned and operated assisted living facilities since 2020. Uh so I've been doing this for a while. Um I uh

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have a masters in healthcare administration. I've secured over one and a half million in SBA funding and I operate out of state. I've operated in excuse me in Colorado and in Idaho. I live in Utah. So, um just a little bit different um from from from other people. I want to show you that you can do this remotely and you can be successful with that. So, um that that's me in a nutshell. Um my facilities um are have been 16 beds. So, uh a little bit bigger than what I would call an unlicensed care home. We're going to

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talk about that here as we as we get into this uh a little bit more. So, if you're interested in learning more about unlicensed care homes, just type in unlicensed down below. Um, this should answer a lot of your questions. But, uh, type that in because I think it helps people. It helps the algorithm. Um, so people can kind of get a feel for, you know, how to find this information that that's going to be helpful. Um, but if you have other questions about it, we're going to have time here at the end of

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the video to do that. And if you didn't make it live for whatever reason, uh, it's totally fine. make sure you are putting in your your questions as well so I can get to them um and potentially make a separate video specific to your situation and and help you out as you're trying to to move things along. So, what kind of home do you need for an unlicensed care home? Let's let's start there. Number one, it needs to be big. Uh you need a big home if you're going to be doing an unlicensed care home. Um,

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the more bedrooms you have equals more residents and that's going to equal more income. Uh, really at at its core, assisted living and running a business is a numbers game. As much as we want to help people who are in need and and we see some people that are charging 5, 7, 10, $15,000 for u assisted living services and we look at that and we say, "Oh man, that that's that's not fair. Why why would somebody be doing that?" The reality is some people do that and uh they're they're able to turn a big

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profit on it. Assisted living and even care home rates are increasing. That's just the reality of the world that we live in. And if you want to turn a profit and you don't want to become a charity and and you don't want to lose thousands, tens of thousands of dollars per month, you need to have more bedrooms in your home. That's just the reality of working in this business. So, as much as as you want to just charge somebody $1,500 to to stay in your home or 3,000 or or or some low number, if

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you want this to be profitable and you want to continue serving more people, then you have to charge relatively high rates. You cannot become a charity and the more bedrooms you have, the better off you're going to be. The other thing that I want to uh make sure that I point out is I would say no or very few stairs. And this is coming from me as a as a person that has I I owned a home in in Colorado that was four stories tall, a residential home, and it so was ton of stairs. It was built in the 1890s.

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Really cool property. Uh just a beautiful home, beautiful area in Colorado Springs. Um but it did limit our ability and what type of resident we could bring into our facility. So, uh, in that type of an environment, if we wanted to bring a resident in and we wanted to meet their care needs, they had to be able to handle the stairs. And that really limited us in who we could bring into into our facility. So, that's something I want you to be aware of is you can do this with stairs. It's totally possible to do this with stairs,

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but it's going to make your life a whole lot easier if you don't have them. So, think ranch or rambler style homes um that have very few or uh or no stairs is is probably going to be preferred. Um if there are stairs on the exterior, you may need to do some kind of a ramp or something like that. If you have stairs on the interior, you may need to look at getting some kind of a chair lift or or something like that. Or you can when you are bringing residents in, just verify that they can handle stairs um is is

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another way around that. But that's the type of home that you want to be doing this in. Uh big, lots of bedrooms, uh so you can get more income and and few stairs. That's that's what you should be looking for. I've talked to a lot of you who are like, "Oh man, I've got this this perfect town home. I think it's great for assisted living." I would say um maybe not the best option. You have a three-bedroom, fourbedroom home. It it it's possible, but you want to

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make sure you run the numbers. You want to make sure that it's going to work and that you're going to be able to bring in the income that you need so that you can generate enough income to make this profitable for you. Uh is what you want to be doing. Okay? So, be careful. Don't just jump into this because you think this is going to be perfect. Make sure you have a good home that's going to work well for assisted living for care homes uh to make this work. Now, let's talk about bedroom requirements. So, in

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a lot of states, um you want to verify all of this information in your specific area. Um, checking with the fire department is probably one of be going to be the best places to do this. Um, some states on the municipal local municipal website is going to have information on this as well. Uh, building code is is kind of what you're looking for here. But, uh, and some states are going to look at this as a total uh, square footage of the home and and they won't take into account the bedroom count, which is kind of weird,

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but um, it's it's what they do. Um, but typically what you're going to be looking for is you need bedrooms. you need kind of big bedrooms. So, if you want a single room uh private suite type of a room uh for one individual, you're probably going to be need needing to look at something that is 100 square ft. So, it's a 10x10 room. Um that that's what that's going to look like. Now, if you want to do this as a shared room, and I know some people don't like the idea of doing shared rooms, and there

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are good ways to go about having shared rooms. We have shared rooms in my facilities. Um, and we just there are ways to to make this really profitable for you as a business owner, but still make it really comfortable and a really good experience for uh for your residents while doing a shared room. There are requirements around that. Often what I see is it's 160 square ft um for for a a room in that in that sense. It is 80 square foot per resident. I have a typo here on on the on the slide. So it's 80 square ft per

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resident is what you'd be looking at. So 160 ft² total in that room for a shared room. So think um you know that single room is a 10 x 10. That shared room is like a 16x10 is is what you want to be looking at just to make math really easy uh from that standpoint. So you can very easily just go and measure rooms and see are they going to be big enough for that space. Um and then you want to again check with your local um your local authorities and make sure that you understand what that looks like for you.

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Um, and because that could lead into um, you know, do I have to make any renovations? Do I have to knock out a wall? Can I count closet space inside of that 100 square feet or or not? Um, what are the room requirements? Do I need to have a room? Do I need to provide a bed? Do I need to provide uh do I need to provide something like uh a chair or a dresser or or something like that? Are there other requirements? And you can find these things out on your state's website. Um, typically that that's

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you're going to be able to find a lot of that information for free online um, for your specific area. Okay? But you want to understand what those room requirements are. And then that's going to tell you, okay, so I've got this five- bedroomedroom home and, you know, I I think this is going to work for assisted living. Oh, but man, this room is just 8 by10. I I maybe can I do assisted living there? That might be too small. Um, can can I make this work? Um, this is not something that is specific

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to a licensed facility. So, this is why we're talking about this when it comes to unlicensed care homes because these are fire requirements. This is for you to get a certificate of occupancy, which you're going to need even with an unlicensed home so you don't get booted out um when you go through this process. You need to verify that zoning is going to work and that you have approval from the fire department that you can have a certain amount of people that you want in your own licensed care home inside of

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inside of the home living there. Because if you don't and somebody calls and reports you, they could shut you down. Um you're still going to have to jump through some hoops. Even as an unlicensed facility, you still need to make sure you're doing this process um correctly so you can be successful. Excuse me, I need to take a drink. All right, let's talk about zoning. Um, zoning is still going to be required. I teach a five fase process to help you get started. One is business plan, you

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know, business foundation. Two is zoning. Three is is funding. Four is the rules and regulations, and five is launching and scaling your business. In an unlicensed care home, you don't have to worry so much about four, though. There's things there in in my phase four that you still want to be hitting on. You still want to be doing a lot of the things that would keep you in compliance if somebody were to come and say, "Hey, you you have to get a facility. We don't do unlicensed anymore. Uh you want to

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have things in place like policies and procedures so you can run an effective business." You still want to do those things even if they're not required for you as an unlicensed facility. It just means you don't have to go through the licensing process. You don't have to pay those fees. Um so that can help you out quite a bit, but you will still have to do your your zoning stuff. You're going to need to be looking for the right permitted use is often the phrase that I see online. Can you do assisted living?

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Can you do care homes? Can you do something like that inside of your home? Is there sometimes it will come out and say specifically, yes, you can do this here. It's a residential assisted living. You can do it there. That's totally fine. Sometimes they'll give you a code like R seven or something like that. So, you need to go back into their website and interpret what R seven means. um does that mean I can do that this type of a business here um or not? So you you need to make sure it is

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available for permitted use for assisted living or care homes, whatever it is that you want to do. And then if it's not, you would need to apply for permitted use. Some states they they will not some actually municipalities will not let it happen at all. Like it's it's off the table. Can't do it. Other states um you have to go through an application process. Um there will be, you know, forms and things you got to fill out with the local municipality. Get that filled out. Uh send it in and

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uh then you can get the permitted use. Sometimes that will require you going out for like public comment. Uh could could potentially like it can be a lengthy process. Could be very simple, could be a simple form, could be lengthy process. You got to go get testimonials. You got to go get letters of consent from neighbors. You got to go uh present this in front of the city council. like it it varies on the spectrum of how easy it is to to confirm your zoning and and get zoning in place, but you want to

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make sure you understand that before you get started because if you do not have this in place, even as an unlicensed facility, your business could be shut down. So, you want to make sure you understand exactly what that's going to look like for you. Now, let's talk about HOAs. Um HOAs is the other thing. Like, if you if you're interested in learning more about HOAs, type in HOA down below. We I have a video um that we've done in the past on HOAs, but I know they can be confusing. They can be hard to navigate

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and can raise a lot of questions for people as they're trying to uh jump into this. And you know, I I know a lot of people, I'm I'm one of them, don't enjoy HOAs. I think there there's a place for them. Uh I don't know that they are always managed the best. We'll keep it uh a little bit, you know, PC here. Um, but HOAs, you may have to deal with them inside of your assisted living, inside of your care home where where you're doing this. Now, they cannot shut you down. They can't

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stop you from doing this. But that does not mean that they cannot make this hard. The reason they can't stop you is underneath the federal fair housing act, the there the people that you are serving in with a care home or an assisted living facility are a protected class. So, you can serve them. They cannot shut you down for that. So, you have the law on your side. You have case law on your side, which is good. It but that doesn't mean they're not going to make your your life just horrible as

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you're trying to go through the process of doing this. I would suggest talking with the HOA um upfront. Make sure that you are getting approvals. Uh if you do this without their consent, uh it could raise um some issues, could potentially lead to some some legal repercussions for you. Um I would also work with an attorney if you feel like you are going to struggle with the HOA. I think it's appropriate to have an initial conversation with with the HOA, see how it goes. And if they are starting to

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push back and it's not looking like they're going to to be able to work with you at that point, I would probably engage an attorney um because law will be on your side, but you've got to make sure you go through this um the in the appropriate way. Zoning can shut you down. HOAs cannot. Uh but they can make your life difficult. So, you want to just be aware of that. Um, HOAs are one of my facilities is in a in an HOA, so I know it can be done. I've talked to a lot of people that have done this inside

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of HOAs, so it's possible. It's just, you know, do you want to deal with the hassle of it or not? Um, that that's something you you have to figure out. I'll also say with HOAs, if you are doing this, you you start a business um or you're buying an existing business, you want to make sure that the HOA is aware uh that that's happening, that it will transfer to you or if you're selling uh your business that you are communicating that with the HOA and that there's a new owner and that it will

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transfer and they won't have any issues with it. So, you want to make sure that you are communicating with the HOA um to make sure that there are no issues there. Now, the question here, this is probably the big one. Should you do an unlicensed care home? So, I've done videos on this. One of my most popular, well, my most popular video on the channel is, can you do a two or threebedroom care home? And the answer to that is yes, you absolutely can. Can it be profitable? Yes, it can be. So,

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should you do it? That that's really up to you. Um, typically an unlicensed care home, depending on the state that you're in, is going to have up to four to six residents. Um, they they cap it at that. Uh, you can find that information out for your specific state, um, and inside of my programs. I can help you out with that. I'll talk about that here in just in just a few minutes. But, um, that's where it's going to be capped at. So, when it comes to that, you're still going to have high

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expenses. You still have to staff the facility, even if you're the person that's living there. and and doing a lot of the care, you're still going to have to hire other people and you still want to pay yourself. So, um that it is still a there's still very high expenses um even in a small facility like this. Uh so, that's something that you want to be aware of. Um usually when you get more beds in the facility, your expenses don't grow at the same rate as as you would see uh with with the bed count.

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And so, you're actually able to make more money. Expenses will increase, just not at the same rate that your income would increase. So, you want to understand the expenses because they will be high and you what I really don't want you to do is get into this thing. You know, I've got this four or fivebedroom home. I think it's perfect. It's Rambler ranch style home. It's perfect for assisted living. And it could be it's perfect for a care home. Very well could be perfect for it. Um,

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but if you're charging $3,000 a month for these services, that's only a four beds when you're 100% occupied is $12,000 per month in income. Um, and your expenses are probably going to be higher than that. So, you want to be aware of that. Uh, that you you could be, you know, coming up to a spot where you're just not making enough. And then if you if you aren't at full occupancy, you're only at half occupancy. That's only $6,000 a month coming in. And so, that can be really hard uh for you. So,

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you need to be aware of that. There are also low profit margins when it comes to these types of small businesses, small facilities, small unlicensed care homes because expenses are high. And if you don't have one or two residents in your home, you are all of a sudden losing $3,000 per month per resident that's not there or 5,000, whatever rate you're going to be charging. That amount goes down. And and realistically, as much as I would love to say you're you'll always be 100% occupied, I think realistically

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you should be planning on it being 90% occupied and maybe even less than that. And you want to make sure that you are profitable um and and turning a profit uh regardless of what you're doing. So you need to understand the expenses. You need to understand your break even point. You need to have confidence in what that margin's going to be to help you get there. And that all happens through the underwriting process. So, um you need to pay attention to what that's going to look like because if you don't

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like you will start losing money and and it you lose it fast and so you have to go about this the right way. You have to be wise with your money and make sure you plan this up ahead um so that you know what that's going to look like. Now, that could mean um you know, four beds, it's not going to work, but my state allows me to get to six beds um as an unlicensed facility. uh what can I do to get six beds in here? And that could be shared rooms. Maybe you convert a garage. Uh there's there's ways to to

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increase that. Or let's say that you were planning on doing $3,000, $3,500 per month uh for rates and that's just not going to work. I did a video on this uh a couple months ago. What if you raised your rates to 5,000 6,000? All of a sudden that that shifts things significantly. Um so so you can you can see kind of how that works. There are ways to get around this and to increase your profit without increasing your expenses, which can increase your profitability. Uh, so it is possible, but you need to understand these

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numbers, understand your market. Can it hold the rates that you want to do? Are you able to add more bedrooms? What's that going to look like? How much is that going to cost? Like, there's just a lot that goes into this as you're trying to figure this out. So, the big lesson there is don't rush into this because you watched a video and somebody told you, "Ah, yeah, you can do this with two or three beds, four beds, like it's it's going to be profitable. You're going to

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generate $10,000 a month." Like, pump the brakes a little bit. Do some background, do some underwriting, make sure it's going to work for you. If it's not, then don't jump into it. Like, just don't do it. You're going to lose money. I have been in a situation where I had a small business where I had to um sell my home uh to to cover the debts. So, I I get it. I've been in that situation before and it it is horrible. Like, it's not fun at all. Uh having to go talk to

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my wife and say, "You know what? Like, we we've got to sell our house, a house that we had built and and our girls had grown up in and and having to just uproot our whole family. It's not fun. I don't want you to be in that situation cuz it's it's horrible. Make sure you spend the time upfront. Underwrite the property. Don't look at through rosecolored glasses. Be very um methodical in what you're looking at to make sure this is going to be successful. Okay? Sorry, just I'll get

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off my soap box a little bit there, but I don't want you to get in a bad situation. Now, if you need some help and some guidance with this as you're trying to figure out, you know, unlicensed care homes, the process, uh, I'd love for you to join our our ALI basics community, uh, you can go do that. Go to assisted livinginvesting.net/basics. Go hop in there. Um, there's there's no application process for for this specific group. Would love to have you in there. I'm not sure how much longer

00:22:18
I'm going to have it open um because I'm shifting a little bit of the way that I do my coaching. I'm really excited for the changes. I think you will be, too. Um, but if you want to get in uh to ALI basics for for the next few months and and get access to some of the things here on the screen, I would love to to have you in there and help you make some progress as you're trying to launch your assisted living business. Um, I love coaching people. It's one of my favorite things to do and this is one of the best

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ways for you to to work with me right now while it's still available. So, go check out assisted livinginvesting.net/basics and go hop in there. So, with that, we're going to get over to our questions. For those of you that are live here, uh go ahead and type those in. Um and I'll I'll hit on some of those questions for you. Um and make sure you get the answers that you need. Uh while you're doing that, while you're typing those things up, um make sure you go and like the video, subscribe, ring

00:23:05
the bell, do all of those things so that you can get u access to to all the stuff that that we're talking about um here inside of the community. You get notified every time we put out new content so I can help you out along your journey and get your questions answered. Um I I love again I love coaching people. Earlier today I had somebody in the mastermind. We did our our uh vision exercise coaching session and I'm super excited for what she's doing. Uh she's in the state of Virginia and and she's

00:23:32
going to kill it. So uh I would love to have you in in that program as well. You can go apply to that at alimastermind.com. So uh with that um let's see. I've got few people here. Uh, I'm I'm going to give you just a couple more seconds to to type in any questions that you've got uh so I can uh get to those uh here before I close things out. Uh but I also want to remind you to go and grab that free business plan checklist. Uh that's the thing that you're going to need as

00:23:58
you're trying to to build a solid business plan to help you make progress. Um whether it's funding or just to have a solid business that's going to help you progress and and become profitable. Uh it's a great way for you to to be doing that. So, make sure you go grab that assisted livinginvesting.net/bp checklist. It's like over here. It's It's weird. It's like opposite of me on the camera, but uh go go go grab that that free resource and uh try use it uh to help you make some progress as you're

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trying to launch your assisted living business. All right, with that, I'm going to close out. So, thank you for watching. Thanks for being here live with me. I appreciate it. Uh, it's always fun to to see people uh here in in the videos with me and uh be available to to you to answer your questions. Make sure you go grab that business plan checklist. Go join ALI basics uh assisted livinginvesting.net/basics. Does residential assisted living sound interesting to you, but you don't know

00:24:51
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 is my favorite thing to do. I love it. I would love to help and coach you as you are going on your journey. And remember, it 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're consistent and persistent, you're going to be successful. Thanks for watching

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and have a great day.