Which sounds better — a few hundred dollars in cash flow from a few rental houses … or $10,000 in cash flow from turning a big house into a ten-bed assisted living facility?

It sounds complicated, but Isabelle Guarino Smith, COO of Residential Assisted Living Academy (RAL), teaches students to do just that — and to finance their investments through syndications and joint ventures, a perfect use of self-directed IRA funds.

Guarino Smith’s father, the late Gene Guarino, got into the residential assisted living business not just to make a buck, but because his ailing mother was racking up $19,000 per month in in-home 24/7 care bills. 

But the price-gouging 100-unit filing cabinets for seniors — which Guarino Smith distastefully calls “Big Box” assisted living homes — were too depressing, with a dangerously low resident-to-caregiver ratio.

“That’s where you hear the horror stories is that my mom called her call button at 10 PM. And someone didn’t come until 2 AM,” Guarino Smith said to Ricci Truong on the CamaPlan Podcast.. “It’s not that caregiver’s fault. It’s the fault of the system being set up to say ‘That’s okay. That’s allowed, it is what it is.’”

The most attractive alternative was residential group-home assisted living, but with long waiting lists for the best homes, Guarino Smith’s entrepreneurial father decided to start his own — buying property, retrofitting the house, hiring staff, and chipping ten beds away from the 1.3 million-bed shortfall expected by 2025.

Guarino Smith’s grandmother sadly passed away before she could move into the facility, she was inspired by her plight … but that one facility grew into an empire of three group-home facilities and eight subsidiary businesses, with a staff of 50 that includes many Guarino family members and friends.  

Apart from the profit potential, the best recommendation Guarino Smith can give for the residential assisted living industry is the opportunity to make a positive impact on behalf of a vulnerable demographic.

“A lot of just real estate investors are honestly there mostly for the cash flow,” Guarino Smith said. “My dad experienced that fulfillment side. You don’t get a lot of fulfillment out of being a landlord.”

Listen to the full podcast with Isabelle Guarino Smith