Are you looking for a reliable and recession-resilient investment opportunity? Well, many doctors will say you need to look no further than senior assisted living (aka residential assisted living) homes.
I will admit that I did not know anything about this real estate investing niche until about 6 months ago. At that time, I crossed paths with Dr. Sendhil Krishnan, a cardiologist in California.
I’ve said over and over that the best part about starting The Prudent Plastic Surgeon has been meeting amazing doctors all of you. I get to learn a ton through all of your amazing stories. Well, this what another such case.
Sendhil and I bonded over real estate investing. However, our strategies and niches were completely different! I focus on small multifamily properties as you know from posts like this. Meanwhile, Sendhil focuses nearly completely on senior assisted living homes. And he thinks that doctors are uniquely leveraged for this niche. Again, this is a prime example of how there are many successful strategies for real estate investing.
Anyway, I’ve since asked Sendhil to share his experience with senior assisted living or RAL homes with us all. Beyond what he shares here, he recently gave us a comprehensive webinar which you can find at the end of the post.
Why would someone get into RAL investing?
As the baby boomer generation continues to age, the demand for senior housing and assisted living facilities is rapidly increasing. And this trend is expected to continue for many decades to come, making it a compelling investment opportunity.
There are currently 77 million Baby Boomers and every day 10,000 people are turning 65. By 2030, one-third of the population will be over 65 representing the largest demographic base in the US.
This means that there will be a greater demand for senior housing and assisted living facilities. So the opportunity is there.
Advantages of RAL Ownership
Investing in senior assisted living offers many benefits. First and foremost, it provides essential care and support to seniors. This ensures that they can live comfortably and with dignity, even as they age.
Additionally, senior assisted living facilities generate a steady stream of revenue from the rent paid by residents. So investors receive consistent and predictable returns. It is not uncommon for a single RAL home to generate net profits of $150,000 to even over $200,000 annually! Sendhil’s own homes in his portfolio routinely achieve such benchmarks. And it doesn’t take more than 1 or two to achieve the financial independence you may be seeking.
This is really impressive as the 16 units that Selenid and I have thus far make around these figures annually. Both ways require work obviously. But there a good chance that RALs get you to financial freedom with less properties.
The assisted living industry is unique in that it is considered essential. So it’s less impacted by economic downturns or recessions.
This makes it one of the truly safe investments because as people age, their need for assistance and care does not disappear. Regardless of what is happening in the economy.
In fact rent year over year has continued to increase in this investment class. Why? Because there is simply not enough demand to meet the current housing or assisted living needs of those seniors who need it.
How can doctors benefit with their own senior assisted living homes?
Assisted living facilities have become a lucrative investment opportunity for many individuals seeking to diversify their portfolios while earning steady income streams.
While many people have taken advantage of this opportunity, few physicians have realized the potential of this high cash-flowing asset.
Doctors are particularly well-positioned to benefit from investing in senior assisted living facilities due to their high reputation and the values that families place on homes with physician ownership.
In turn doctors can also serve their seniors with various medical services or utilizing health technologies that are simply unavailable at most other senior care homes.
Now, this doesn’t mean that you as a doctor are becoming the residents’ primary doctor or even managing day to day issues. There are management and care teams for things like that. However, doctors can certainly leverage their knowledge and skill to create the best possible RALs for their residents.
And just like Selenid and I find great fulfillment is providing excellent housing for others, the fulfillment from helping provide safe and stimulating homes for seniors is undoubtable.
How can doctors learn to invest in senior assisted living homes
Well, that is always the tricky part.
As Sendhil’s example shows, only 1-2 RAL properties can lead to financial freedom. But this is certainly a more specialized niche. So the learning curve is probably a bit steeper if you are going in alone. It’s still possible, that’s what Sendhil did. But learning from others is probably a better way to go about it and get to your goal quicker and more efficiently.
That’s why Sendhil developed a full and comprehensive course called the MD Senior Living Academy. This Academy was created by physicians (Sendhil and his MD partners) to teach doctors on how to start and invest in their own senior assisted living homes in their communities.
The course foundation follows the exact model MD Senior Living utilized to start their own homes in 2019, which has now grown to have over 12 homes with multiple physician co-investors.
What is in MD Senior Living Academy?
I actually was really interested in this REI niche so I completed the course myself.
MD Senior Living Academy starts with a comprehensive online video program divided into 5 separate modules that gives a detailed explanation on all the steps an investor should take to open and run a successful RAL home and business.
This includes understanding real estate basics, a guide on finding the right location, obtaining the necessary permits and licenses, and hiring and training staff. It offers practical advice on creating effective marketing strategies, building a strong brand, and navigating the complex regulatory environment governing assisted living facilities.
The course is designed to cover every aspect of opening and running an assisted living facility, even if you have little to no real estate background or experience.
Additionally, the course provides a wide range of resources and guidebooks as supplementary material. This includes comprehensive state licensing guides, worksheets which include actual profit and loss statements, expectations of revenues, policies and procedure documentation, as well as actual resident lease agreements.
Beyond the Academy, a private Facebook group keeps members educated with an ongoing high yield webinar series where other industry experts in senior living share their experience, wisdom, and recommendations.
With the help of these materials, you can definitely quickly and easily start your own care home and provide high-quality care to their residents while maximizing your return.
Just a few homes can lead to financial independence
Doctors can earn financial freedom by owning just a few senior assisted living homes. You can generate steady streams of passive income without sacrificing time.
You also get to serve an aging population in need of senior housing and assisted living help.
If you are looking for a very fulfilling and interesting niche to get into or expand your real estate investing to reach financial freedom, consider learning more about investing in RALs via MD Senior Living Academy!
And you can view our recent 1-hour long webinar with Sendhil here!
What do you think? Have you ever thought of investing in senior assisted living homes? Why or why not? What has your experience been? Let me know in the comments below!