most asset classes are so squeezed right now but the tailwinds are there for assisted living that it just makes so

much sense that you almost can’t fail even if everyone listening to this probably stopped and shifted towards

residential assisted living there should be enough opportunity for everyone you operate the business too 6 figures should be easy to do even 3x that the

thing that’s really cool about senior living versus like short-term rentals is that the lensure and the regulations go

the opposite direction it is impactful it is profitable if you do it right oh it’s about how many homes can we open

how much impact can we make

today’s guest brings a powerful blend of discipline service and vision charlie Cameron is a military veteran father of

two and one of the most respected voices in the residential assisted living space he’s the co-founder of the Row Room

Mastermind and currently manages eight assisted living homes five that he owns directly and three through a fund after

starting in apartments and pivoting to short-term rentals Charlie made another bold pivot into residential assisted

living a space that I am also very passionate about these days not just for stronger returns but because he was

looking for something deeper what he found was a business model built on care community and what he calls passionate income work that’s profitable and

personally meaningful so we’re going to dive into Charlie’s story and I’ve had the pleasure of getting to know you over the last what seven eight months now and

I think we immediately recognized a lot of crossover in the way we think and and just kind of the mindset we have towards

our investor journeys i’m really excited to dig in and and get to know you even better so welcome to the show Charlie

dude Erin stoked to be here man i know it’s only been seven months but it feels like seven years like I feel we bonded a lot and yeah similar mindset a lot of

kind of value first mindset and it’s been really awesome getting to know you i every time I talk to you I learn

something new about you but why don’t you give us just a cursory overview of your background and how you there’s so

many chapters before the current one so let’s maybe roll it back a lot of chapters i’ll try to keep it short so

yeah I I out of college did the RTC thing which paid for school to do get an

engineering degree so I did that i entered the Air Force i did weapons development tests and acquisitions for

11 years when I first joined I thought it’d be four years and then I really wanted to move out of New Mexico so I took the next assignment and then the

next assignment and so then it was a I didn’t discover real estate until halfway into that kind of Air Force

career and so I I started investing in apartments along the way while we were in Ohio and I was like “Ooh this is the

way.” Like I hey I see all these careerists that spend 20 years for their military pension and then spend another

20 to 25 years working what was the point of going and getting the pension if you have to spend another 25 years

working i I didn’t that didn’t click and sit well with me even though I had great opportunities in the Air Force and I

loved it but I realized very quickly I needed some sort of other path and so I

was thought I was going to be doing apartments and do 20 in the Air Force and then retire early after that but

what actually happened is I achieved financial freedom 9 years earlier than I thought i made a couple pivots along the

way so I started in apartments scaled up a little bit and then short-term rentals started to become the thing so I pivoted

for cash flow i was doing kind of more value ad and then I pivoted to cash flow that was helpful got my real estate

license along the way i needed something else to be able to supplement the W2

income between the short-term rentals and that I was able to leave the military and become a reserveist and

then and walk my daughter to kindergarten that was my goal was get out right before that which was awesome

and then and then as you said I’ve pivoted to residential assisted living i think that most asset classes are so

squeezed right now but the tailwinds are there for assisted living that it just makes so much sense that you almost

can’t fail i say almost because it’s definitely it’s not easy i don’t want to have any of your listeners think that

it’s easy but man u the demand is high the fulfillment level is high the

potential for financial independence and growth and wealth generation is high

while doing something great for seniors their families and the community so I mean it and staff by the way because

there’s lots of burntout caregivers in big nursing homes that really could do a

lot greater things for a lot less work in a care home but so anyway that’s a roundabout way of telling my story and

yes I’m my wife is also in the military and I have two kids four and seven and they’re awesome and I like to ski and

take long walks on the beach i love it yeah the whole being able to walk your daughter to kindergarten thing is very

impactful for me especially right now i have a three and a half-year-old and one-year-old twins and my wife and I are

in a similar sprint where we’re trying to do what we can to free up our time and give us the financial wiggle room

and breathing room to to be able to take a little more control over our time so that we can enjoy this period there’s

the they say 18 summers is what you have with them in the house but it’s really probably 10 where they actually want to

have anything to do with you at some point they go make their own friends and they get their own interests and while

we are excited for our kids to grow up and find themselves I recognize how small the window is that we have to

really spend quality time together where they still want to have something to do with us so I love that you mentioned that okay so there’s a few things to

peel back right you got military you got apartments you got short-term and obviously residential assisted living

we’ll talk plenty about and then but I actually want to know did you always have an inclination toward or know that

you were going to go into the military my dad was a careerist he did 33 years

in the Air Force and so he basically told me that not because he couldn’t afford it but because my dad was really

good with financial lessons was like “Hey you either you could try Rosi but whatever you’re paying for school on

your own.” And I was like “Oh okay.” And so I did that i’ve always been a nerd so

wanted to do engineering anyway so it just made sense like hey I don’t have to think about a job after school i can maybe go do some cool stuff and

literally my first job was blowing stuff up like myth like Mythbusters so it worked out pretty well and fall into the

military thing it just patriotic family i’m red i bleed red white and blue it just kind of it all made sense it all

came together and yeah I probably always knew that I was going to go into the military at least for a while part of

why I ask is because some of the most successful and driven investors that I’ve talked to off the show or just out

and about have come from the military and I actually you probably didn’t know this but I was very strongly considering

joining the military when I was like in tail end of high school cuz I loved the structure i loved the idea of discipline

i was very like self-starter motivated i was in drum line which is not the same as military but like we had very

regimented like we took everything very seriously we practiced a lot we spent so much time together created the

camaraderie that I would imagine is similar to what you might maybe that on steroids in the military but I love I

fell in love with the structure of it and so I was always considering it and I’ve just noticed that people that that

come out of the military they have that drive they have that discipline they’re not afraid of they don’t sweat the small

things there’s just a lot of common characteristics I see in military investors and where I want to take that

is that you met your current partners and in a military mastermind can you

tell us about that yeah I will say I think that the biggest reason that

military veterans do so well in in real estate investing is that they have had a

lot of responsibility from a young age and so when it when you’re looking at oh okay I’m going to go get this one deal

that’s small potatoes in terms of risk and stress compared to what they had to

deal with in the military multi-million management of $30 million a year i could go on and on 80 person teams and so

you’re like okay I’m going to get out and buy a house that’s nothing right or even syndications raising money you just

have built that confidence in the military even like young enlisted they’re doing things like turning

wrenches on on $20 million jets and so

they’ve got what it takes to do it and so it often times that I think that translates well and they know how to

buckle down and do work so that’s helpful too yeah i joined it’s called a war room it’s a mastermind for military

veterans basically that are looking for not necessarily financial freedom but

like ways to increase their wealth especially in the military because it the pay is rather low compared to the

civilian sector and so it can be hard and nobody really teaches you in the military or in school which I think is a

foul that anything about finances and so a lot of folks get in the military and immediately buy a car like me and you

know the idiot things you do and nobody teaches you how to be responsible and I

actually met Dave Prey through Bigger Pockets and was one of the very early first joiners OG members if you will and

I really joined just because I liked the camaraderie really of having a bunch of military

investor-minded dudes and gals and and that really was awesome because I joined

I got into a squad like an accountability squad and immediately we formed an entity and invested together

so I’m wiring 25 grand to a dude I just met and you know it and it was easy to

do because military right and so military military it was like okay cool and he’s still one of my best buddies to

this day and he’s still on my squad which is great and he’s on my EXP team anyway but yeah so that became a really

great experience really for the network I learned a lot and I still go in there when I have a real estate question I go in there and I ask and somebody’s got an

answer or they can network me to somebody else and it’s just very giving and just I don’t know just great

community and that is how I met Luke actually met Alex through Bigger Pockets and brought him to the war room and yeah

so we the three of us got together and we purchased properties together before we ever met Luke in person which was

also pretty cool so that’s kind of the power of networking and a community yeah

and I think what I was talking about earlier what you’ve affirmed is that the structure and the discipline the camaraderie the responsibility taking

action all the stuff that you that was ingrained in you deeply while you were in the military it carried forward into

that structure the mastermind structure and I know you now run a mastermind too and it’s interesting because I don’t

think you have to have gone through the military in order to get a benefit from that type of structure and it’s not

something that’s super obvious to people when you talk about going out to invest you might not think you need to fortify yourself with all this community and

network and pods and detailed strategy and all this stuff but it really does make a difference and that structure

that I craved when I was in high school contemplating going into the military i find a lot of that same stuff that that

I was seeking in the current types of groups that I’m in especially yours and I just want to call that out cuz I think

the the mastermind format is something that you probably a lot of people hear that buzzword i talk about it a lot on

this show cuz I’m in multiple of them but it’s not just like some it’s not a cult it’s not a fad it’s it’s a

structured program meant to help you achieve your goals alongside other people and build meaningful relationships that that last part is the

most important part to me it’s like the it the coolest part of it is it’s so real it’s not like you just paid some

money and you’re going to go take a course and now you never talk to anybody again no it’s a community and everybody

gets to network and grow and build friendships and partnerships over time and help each other win and I I just

think that’s so powerful and such a great model um obviously I’m totally in love with it and if I had time to join

more I would but I’m tapped out at the moment but maybe one day I’ll be in

another one that that you’re in we’ll see it’s hard once once you get hooked then you get the inclination to jump

into other groups and cuz you might know other people that are in different groups and you want to go join them and be part of the same thing they’re doing

but I think starting your own is also a beautiful thing i was going to circle back to this later but maybe let’s just

explain what the row room is and it sound you were in the war room so I imagine that had some inspiration in the

row room yeah I will tell you and Dave can confirm this that we basically ripped that model off because we got his

advice we’re like hey we think that there’s a gap it wasn’t something a year ago this was not a thing and we didn’t

we were just discussing it and is this something we should do we told you know

the leader in the war room all about it and he’s like “Hey man you need to go copy mine and make it for assisted

living.” Because it didn’t exist right there were some courses there were some big upsells there were some there was things out there but not a community not

a mastermind and so we just went ahead and built the thing and launched it and that was it turns out very highly in

demand and man I’m so glad we did because I’m having so much fun and learning alongside everyone the thing we don’t claim is that we’re gurus or

experts at everything because we’re not and you know what we do claim is we’re going to bring the experts to you and

we’re going to do our very best to help you succeed and I think that’s worked very well just being genuine has worked very well and I think that man I’m I

couldn’t have been more happy with this path and going forward and actually

launching this thing because I’m building friendships like me and you right and everybody else in the community and hopefully we’re going to raise money for deals and it man it’s

just going to keep growing and getting better and dude and so we it’s cool

because we’ve based now our goals for the community on how many homes can the community members open it’s not about

how much money can we bring in and how many members can we get and how much whatever no it’s about how many homes

can we open how much impact can we make because it’s going to be incredible over the next few years to see just how big

that number is yeah i think it’s not like you’re trying to take credit for people’s success so much but the fact

that you can measure your own success in how well you empower other people I love that like I do coaching and I have an

academy too and my most fulfilling favorite moments are when we help people

get past a mental hurdle or a tactical hurdle or whatever it is and just keep helping clear the way in front of them

as they’re navigating something hard and I will say residential assisted living you were talking at the beginning about how it’s it’s not easy but it is

impactful it is profitable if you do it right there’s a lot of upside but the barriers to entry are much higher than a

long-term rental or a short-term rental or in some ways even some stuff like larger apartment buildings and whatnot

the plan is a lot more operationally intensive and even if you’re going to lease it to somebody you have to find

the right type of operator it’s a complex business you have to make a lot of judgment calls you have to know what

you’re looking for so I’d say the learning curve is a lot steeper than most other types of real estate

investing and I know when I joined the rout room originally you guys you have a

success path that’s all laid out right in front of you okay start here start by understanding your goals and what you

actually care about on a personal level and then tie it to the strategy work line by line build out your business

plan and understand all the regulatory hurdles all of the financial like how

does the plan work how do you budget how do you estimate revenue it’s a little bit overwhelming and exhausting at first

but if you have somebody kind of spelling out what that path looks like based on their experience it makes it a lot easier and then to your point about

not being a guru I think in my experience learning from people who are still relatable to you is more fun than

learning from someone who has 10,000 residential assisted living homes all across the US and a team of 80 people

full-time running it like that’s not relatable to me what’s relatable is like you guys followed the signals you built

your own exper diverse base of experience you come came together formed a partnership followed the signals as

they were presenting themselves as to how to turn this into something sustainable and then turn around and

teach it to other people so I think that’s another kind of power in the mastermind that’s power in the story but

I think one missing piece of which maybe you can elaborate on is you guys started a Facebook group and I think that was

your your signal to go further right yeah so we so originally we were buying

homes and leasing them to operators and we’re like we need more operators to lease to so we created a Facebook group

to on residential assisted living groups/residential assisted living is the tag and that was the pure only

reason there was to find more folks to buy homes for and lease too but it grew

ridiculously fast we have 14,000 members it’s been around less than a year and a half I believe and so we just all we did

was just add value to every post and as best we could and it blew up and we just

realized very quickly oh man there there’s a massive opportunity here there’s a lot of pentup energy to get

into this space but a lot of folks that don’t know which path to choose essentially and they don’t most of them

don’t have hundreds of thousands of dollars to start their homes and so there’s some barriers to entry there

that we can help solve and so that’s we were like hey this is the perfect you

know format for a mastermind community and we went forth and conquered and based on the launch we said yes this is

going to work and we’re going to continue with it but yeah accidental really initially was not at all what we

thought was going to happen it’s not what we thought we’d be doing right now but we’re really glad we did and we’re

just having a blast with it it’s a good example of like listening to the open market right if you start something and

it’s catching attention and generating good conversations and you’re able to give value and you’re able to help

people navigate whether they join your group or not or your paid group or not it’s like you’re still participating in

the dialogue of making the collective investor base in residential assisted living better and more equipped and more

educated more connected and then yeah to be to parlay that into a group where you can go deeper if you want it just makes

all sorts of sense but so with that said like there are so many other chapters in your journey leading up to this so you

had your you had the apartment phase you had the short-term rental phase you had the agent team phase can we maybe click

in on I guess short-term rental is the one that that stuck to me the most that seems like it maybe evolved towards

residential assisted living like how did you get into that and then what was also like the signal that made you pivot away

from it yeah I was originally in apartments and I was doing kind of BC class apartments and adding value and

selling those and it was when the getting was good and I saw the signs that short-term rentals were going to be

the next thing and I saw the potential for cash flow and so my goals changed i

didn’t really need cash flow originally and then I was like “Oh if I’m going to try and do this thing where I leave even

earlier than 20 years from the military I’m going to have to make a change.” And the war room basically was like “Hey

church terminals is where you’re gonna get max cash flow right now especially if you self-manage from afar.” So I did i sold When was this in like 17 or so

okay and so made that pivot and started selling apartments we actually the way I

got into short-term rentals is I was deployed to Tampa for 6 months and the girls came down and we went to Disney

for the first time took my daughter she was four and it was just such a blast

we’re like we live in the panhandle we could do more of this so we we bought

actually this was right at the start of COVID I think because everything went on

sale and so we bought actually our own house turned another one into a rental and we bought a short-term rental at the

same time and we bought a little town home down in Orlando and that was our

first one and we it’s just started printing money we’re like “Wow this is

cool.” It’s basically paying us paying for Disney vacations too and this is cool like we can have both and so kind

of made a full force pivot did a couple 1031s did some new builds and at that time I was just like “All right who’s

successful and where?” And I’d make friends through networking and I bought two Nashville rentals alex and I bought

Colorado and and Georgia rental together and so we just started just whatever

worked we were doing it and and that that strategy paid off for quite a while so the cash flow was great for quite a

while but but then things changed right especially after co we got all that money printer go burr we got all that

cash hey and pentup energy so lots of travel lots of money into assisted

living and then the money ran out and so people started traveling less all the

the cat was out of the bag avery Carl let it out of the bag I think through Bigger Pockets and the saturation of short-term rentals got high and then

regulations got high so all those factors together really started to push rates down on short-term rentals and we

started to offload before everything turned crappy there and so luckily we

got in when rates were low when prices were low and so we still have a couple remaining that we’re looking at just

offloading and so that we can spend our time elsewhere the one thing I hate most about short-term rentals is the

management of them they’re just a pain in the butt it’s cool it’s got a cool factor to it but it’s not fulfilling and

that was something I realized that was not working for me really like I I got into it cuz I thought it’d be cool and

it was to some extent and a couple of our properties are really sick but not

fulfilling and the guests man they just wear you down nonstop i could go on and on about the crazy stuff that’s happened

in some of our Airbnbs but I won’t bore your audience right now but yeah so once

we learned about assisted living it was kind of like oh we can kind of get heyday this is just looking at the least

operator model we could get like short-term rental heyday cash flow almost passively if we find the right

operator we’re even doing less maintenance than on a single family rental even though it is a single family rental technically we just use a

commercial lease on it quite a different quite a different look instead of $100 to $200 a door you’re talking $1,500 to

$3,000 a door in cash flow and that’s just lease to operator if you operate the business too as really depends on

the home but but six figures should be easy to do on 10 beds or more and then

you can even 3x that depending on the size of the home and the type of home no it’s a thank you for sharing that

because I think one of the things so you you were able it sounds like you were in the each asset class at a good time you

were in at a good time for multif family you were able to do value ad probably the rates were a lot more favorable you

learned a lot I’m sure and then same in short-term rental it sounds like you were in as the wave was rising and you

got out mostly before it crashed and you learned a thing or two about what you

actually want to do and like you said it doesn’t fulfill you right to be like giving people Wi-Fi codes via Airbnb

messenger app at or getting phone calls at 1:00 a.m i’m locked out kind of things you know yeah exactly you want

people to have a good time but it doesn’t necessarily give you warm and fuzzy feelings like you’re making a huge impact in the world and then to your

point like financially there’s another opportunity in residential assisted living that is still good for you it’s

still mostly passive if you’re doing lease to operator but you’re also making a huge impact right you’re providing a

needed service we can talk about some of the supply demand mismatch you talked about tailwinds in the industry and just

how some of the the demographics backing up the asset class are only beginning in

a certain sense whereas these other types of real estate investing often times they come in waves and cycles or

shorter term but we really I think you and I are both very bought in on the idea that there’s probably two or three

decades worth of tailwinds behind residential assisted living right now and even if everyone listening to this

probably stopped and what they were doing and shifted towards resial assisted living there should be enough opportunity for everyone and not only to

prosper financially but to make an impact and solve a big problem that’s coming up around the corner today’s

episode is brought to you by the Remote Real Estate Academy the community I launched last year where I personally

coach investors and empower them to buy rental properties anywhere in the United States my business partner Nathan and I

have a collective 15 years experience with over 20 cash flowing out ofstate rental properties we provide a

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I’ll throw in a special bonus for podcast listeners who join the academy now let’s get to the show so I think it

sounds like you kind of organically came to that realization but can you talk about how So it sounds like you already

were in partnership with Alex and Luke but how did you guys collectively like

make the decision to pivot what did that look like on your first deal yeah actually this was just a I do want to go

back and say I was pretty lucky in all my timing and stuff i’d love to say I was smart but no there was definitely

some luck involved and pivoting for my own benefit for cash flow rather than like market stuff but you kind of do

have to roll with the punches and there’s going to be natural cycles so just remember that but you’re right the

assisted living cycle is now in an up phase it’s going to be in an up phase for decades which is unlike most other

asset classes but yeah actually what happened here was Alex and Luke even though Alex and I were business partners

they were in a a separate accountability pod in the war room together so I didn’t really know Luke and Luke had been

looking at his next investing class he had a couple like ADUs in San Diego and then he was like I want to buy an

assisted living home and all the folks in his accountability pod were like “What are you even talking about?” None

of them had heard of it and and then a month later he did and he bought one and he leased it out and he was cash flowing

like three grand a month and so everyone else stopped and said “What is happening?” Alex and him then Alex was

like “I want a piece of that.” So then they went and bought a home and leased it out and I was like “Alex dude what

are you doing man tell tell me all about this.” And he broke it all down for me and I was like “Wow I want to meet

Luke.” And so then the three of us got on a call and I was like “Hey guys I don’t know if you’re looking for a third partner but I actually have time during

the day unlike you guys so maybe that qualifies me enough to be a partner.” And and I was lucky enough that they

were like “Yep we would love to do that.” and we’ve been three three best bros ever since just trying to make an

impact and build a portfolio and see how how things go so it’s been fun when

we’ve had our slew of mistakes and not getting the right operators and all sorts of other things but but that’s how

you learn right and so we’re learned to learn by doing and then get bring

investors in and start to grow from there yeah so let’s dive into the weeds a little bit on this lease to operator

model that you guys started with and like how does it work you find a house and renovate it you find a house that’s

already retrofitted you find an operator just give us the 101 yeah so you’re

looking for a home that is either already licensed for assisted living or

is already retrofitted for assisted living and when we’re talking about residential assisted living we’re talking about single family as many

bedrooms as possible preferably over 300 ft² per resident that you want to have there with additional living space

because they’re living there they’re dining there together and you’ve got staff right so that’s generally what

you’re looking for and most states are going to have to have a residential sprinkler system you’re going to have to have wider doorways you want rollin roll

out showers and so there’s other things you’re looking for in some markets there’s kind of rules on how many

assisted living homes could be within a certain distance of another one so you have to do your research because every

single locality is different on what the requirements are but if you can find existing license that’s optimal if you

can find ones that are close and can be licensed that’s next next best and then if you find ones that need to be

retrofitted that’s least best but also great because the ROI on the retrofit is usually pretty high because we’re

talking thousands of dollars in cash flow instead of one to 200 per door we were looking for ones that were existing

or ready to go we had one we did install sprinklers on two we installed sprinklers on but yeah so what we were

doing is purchasing these residential homes in Arizona and either transferring

the license or converting for license and then finding an operator and having them lease it from us but unlike a

residential home where you’d have a one-year lease and then maybe monthtomonth after that or another year lease after that we were doing

commercial leases which holds the tenant more responsible for more of the maintenance as well as a 3 to 5 year

timeline with auto 3 to 4% increases each year so that it’s a little bit

different of an opportunity because now you’re locking up a longer lease time with one of these operators that’s operating this business out of your home

so we really liked that aspect we liked that we were leasing it for about 2 and

a half to 3x what just a long-term regular tenant would be because remember

this is a retrofitted home it’s a licensable home those things are worth something and so we just really loved

all those aspects and started doing more of it and on the flip side of that the operator they might not have the cash to

go buy a home and do the renovations and get it all modded out to pass state inspections and so from from their

perspective they’re just solving a simple math problem of if I can fit six or 10 however many people in and I can

charge X amount per month for bed rate and here’s my payroll and operating expenses here’s how much I have left

over then you negotiate with them and figure out what the appropriate price is for that long-term lease right 100%

you’re exactly right a lot of these folks you know want to start their first home or they want to expand their

business but they can’t also pay for the real estate it is expensive to operate these businesses especially payroll

being your biggest expense and so you’ve got to have money sitting around for that to have money sitting around for

the real estate too can be a challenge it’s actually a great partnership is the way we think of it and so we’re looking for operators to partner with and expand

with oh you want another home great let’s go find you another home that you can expand your business into so it

works out really well there’s lots of different ways to go about this model and so this is the most passive one

that’s directly involved I’d say and I do not throw the P word around lightly

but it is pretty darn passive once it’s set up like there’s you have very little responsibility they’re covering the

majority if not all the repairs you need to obviously be available if god forbid an emergency happens or something crazy

but there’s no real operational involvement in that model correct yeah so the way we do it is we get a home

warranty that covers all the big stuff and we give them the policy number and

the phone number and say if you have any problems call them don’t call us and handyman everything is on their

end you want that for liability reasons too right okay we’re talking Phoenix in the summer the AC goes out you do not

want to be responsible for fixing that AC you don’t want to be the barrier in in time either you want them to call and

get it scheduled and get it fixed and So that’s how we’ve structured ours and we really like that model because we end up

really not having much maintenance to do now the big you got to remember a roof and structural the big stuff still

account for that but we’re not doing we’re not getting repair phone calls it’s much more passive than even a

single family rental more passive more profitable more impactful pretty sweet yeah it’s and I

will the big challenge is finding the right operator oh it’s not all I don’t want to it’s not as easy to find an

operator to lease that’s good and that’s going to last as it is to find someone to rent for 12 months so it is different

in that respect but if you do find the right one heck yeah so I think you you

hinted at this earlier but it sounds like you’ve you have some operators that have worked out really well but you’ve

also had to go through and replace certain operators can you just share what is the process of finding one and

then how do you know if they’re good or not yeah the one we had to replace it

actually it had less to do with the operator more to do with the state we this is when we were getting started we

didn’t this home could not be licensed for more than five for assisted living but it could be licensed for 10 as like

a sober living home and at the time in the state there was a lot of that going on and a lot of it was unlicensed and

some of that was pretty shady and when we looked at it we’re like “Okay we’re willing to get into it we’re willing to try this and take risk but we want it to

be licensed like we wanted to be on the books we want the state to be happy with it we’re not going to do any of this unlicensed shenanigans.” And so we found

an operator that could do that and he had multiple homes and he was ready to expand with us and we’re like “Okay

cool.” We go we close he signs the lease we get started like a month later the

state shut down all payments statewide for Sober Living and there were a few

companies that were bigger and more legitimate that got to keep payments pretty much all the small operators like

that of which there were hundreds gone in a day and I don’t know what happened to all the patients that seemed like a

kind of a scary proposition to me that the state just turned it off i understand why they did it it’s not how I would have done it not

that it matters but I I definitely understand why they did it they were underregulating and then they all of a sudden overregulated and so nobody could

get sober living licensing for almost a year a little more than a year they were

just not going to issue new licenses so this guy couldn’t get licensed he basically skipped and moved out of state

and so we had to deal with that because it couldn’t be 10 bed assisted living it could only be 10 10 resident for sober

living anyway we’ve had a couple tenants couple of shorter term tenants midterm things as we figured it out and we just

signed as a a mental welfare home for kids so we have a new tenant now for

that so we are excited about that and we’ve gone through multiple leases there

anyway we decided after that that we’re going to stick to the thing we are we think has the best tailwinds which is

assisted living for seniors right for seniors yeah though there there is definitely a huge need for kind of

disability care of different types foster care so there’s and even sober care there’s definitely some other needs

out there niches that are related that if you know how to navigate the lensure for one you could figure out how to n

navigate it for the others but our focus is assisted living makes sense no and

thank you for sharing that because I think one of the fears people have when they go into something like this is that they’re boxed in right and if they can’t

find this exact type of operator in this exact niche that fits this exact type of lensure and the modifications of your

home then there’s no if you have a long-term rental you can turn it into a short-term rental you can turn it into a

midterm rental you can renovate it and try and sell it there’s typically multiple routes and I think when you get

into something highly specialized my wife and I are building 16bedroom 16 private bathroom home that is perfect

for assisted living but not perfect for a whole lot of anything else so I think with that that flexibility like you

mentioned where you’re having to try and find like the right operator or if you are the operator yourself how to find a

different plan should you need to make a maneuver in the conversations I’ve had that’s one of people’s biggest fears so

I just wonder if you have a response to that or like how you would advise people who are thinking about getting in that are concerned about not having

flexibility or multiple exit plans yeah I think the thing that’s really cool about senior living versus like

short-term rentals is that the lensure and the regulations go the opposite direction which is the need for this is

going to continue to go up and it’s only going to get much harder for states to deny that and so they’re going to need

more of it they’re going to have to approve more of it and when you have that license it’s it’s I don’t want to say impossible but it’s really hard to

take away you can continue to renew it and that age is a protected class and so

you can fight battles and stuff and ensure your success if you will from a legal standpoint not that you really

want to but with HOAs and things like that if it’s allowed then they really can’t say no so you got to dig into

regulations and zoning for state and for localities but it’s I think it’s doable

i think it’s a lot more protected and if you build that home that’s specific and it’s to assisted living and it’s

fantastic the community is going to love it and it’s gonna have the backing of

the community and from a political standpoint okay who’s going to kick out a bunch of seniors it’s easy to say “Hey

your short-term rental is annoying us those parties are crazy we’re not going to allow this anymore.” It’s not okay to

say “We’re going to get rid of those 16 patients with Alzheimer’s from this house.” Wow that would be popular

nightmare yeah exactly and I think as long as you’re doing a good thing and you’re doing a good job with the home

man you’re going to be you’re gonna be set yeah no I agree it’s almost I don’t want to necessarily frame it this way but

it’s almost like you don’t need another exit plan if you’re operating a certain way and for a certain type of service

and you’re doing it there should be and you put it in the right location there should be enough demand to sustain that

model into the future but model right so you’ve got assisted living you could and

that could just mean help with three daily activities at the lowest level so you could be providing not really any

care or just have a nurse that comes in every now and then all the way up to memory care we know folks that have

ventilator homes and all sorts of kind of additional levels of care you can within the model have models and pivot

as needed and the needs of the community around you so I think there’s there’s always going to be room and with the

tailwinds man there’s we’re already short and there’s going to get there’s going to continue to be a massive shortage so you that’s not going to be

solved period there’s not enough investment and there’s not enough buildings so it’s just not going to get solved so luckily for all of us there’s

going to be a lot more demand than supply for the long run yeah and it’ll

be 70 80 90 years before that trend has any type of reversal or a reversion to a

lower amount of aging population so it does feel pretty well insulated but I think part of this conversation that is

so important that I want to continue to share with my audience is that residential assisted living is not a

there’s not a singular strategy that fits under there there’s the lease to operator there’s people that operate and

then lease there’s people that do both there’s groundup construction there’s buying and renovating there’s buying an

existing business like there’s so many different routes and each one there’s some commonality and overlap at the end

of the day you’re providing a service or you’re finding somebody who can provide that service and you want that to be the

best representation highest quality of care possible but the ways in which you

can enter this space are drastically different and the levels of complexity of each of those plans and the types of

skills that you might need you mentioned this earlier like some operators they are they love healthcare they have a

healthcare background they love serving seniors they have no interest in real estate right so maybe it’s a win-win to

have a group like the three of you guys come along who you’re like down to roll up your sleeves problem solve and

basically tee up a house for them that’s perfectly built to spec or is going to pass whatever they need that’s great

that’s a win-win so I think people that are interested in exploring this space and one of the exercises you guys do so

well in the rail room is you figure out your goals you figure out how involved you want to be you figure out your why

why are you actually interested in the space at all it hint not ever just money and anybody that ever gets into this

just for money they’re not going to make it past the barriers of entry and the work that you have to do to get started

but then you link it to a plan right and so you’re building your plan in real time and you’re trying to understand okay based on what I want based on my

why like which strategy is going to fit what I’m trying to do and I think that’s

where like that fork in the road build buy renovate whatever it is that’s a really important decision point that

most people don’t even realize there’s that many options to begin with i don’t know it seems like you guys correct me if I’m wrong but when you built out your

framework for how to launch a RA it was probably based on your own experience right of here’s the stuff we had to learn here’s the order in which we have

to learn it and here’s how we can like work through to make an informed decision about what to do is that

accurate exactly yeah which path are you going to pursue based on our mistakes and and you’re right there’s there are

so many options and none of them are wrong and that’s it’s so key because everybody has different goals they have

different cash on hand they have different passivity or active goals and they want to leave their W2 maybe they

don’t and they just want to invest over here everybody’s situation is different so what we didn’t want to do is slap and

say this is the one thing you need to do because that’s what everybody else is doing and so we’re like hey no there’s

not one thing you need to do there’s about seven different things you could do actually there’s probably a lot more that we haven’t even discovered yet of

different models that are going to emerge over time maybe ones we’ll create who knows and and just we wanted people

to be aware of all the options and then help them figure out which one’s the best one for them at this time which can

change right it’s no different than our real estate journeys i didn’t think I’d be in residential assisted living right

now but I had to go through a long apartments and short-term rentals and single family rentals to really

understand where I wanted to end up and I think a lot of people need that guidance to figure out what their path is going to be and then because without

that you’re just shooting in the dark and you’re still kind of lost once you grab that thing of go oh yeah this is

the one kind of like you development I think then then then you can then break

it down into actionable steps until then you’ve got seven different things and you can’t you just can’t you have to

pick one maybe two models to go after so that you can actually break it down and start making progress yeah it’s that

principle i forget the exact story maybe you can correct me if I’m wrong but if you’re flying a plane from LA to New

York and you veer 1% off course then you’re going to end up in a totally different city or something right it’s like you have to know what you’re aiming

for in order to actually be able to and then when if you do know what you’re aiming for then you can tunnel vision

and just execute right you because you know that you’ve created the right type of plan and framework now it’s just

about get rolling up your sleeves and getting the work done so you mentioned funding and you mentioned W2 those are

I’m going to tie those together into one topic here because I think funding is another big blind spot for people these

aren’t just buying $150,000 single family homes in Cleveland this is capital intensive business the

renovations can be expensive you can’t always fund renovations with conventional loans so maybe can you talk

about some of your journey and then the reason I included W2 in there is because I think people oftenimes are in a hurry

to ditch their W2 if they’re feeling excited about another idea or maybe a little bit unhappy with their jobs but

in my experience it’s been a pretty important component to being lendable to keep your W2 so I just want to get your

thoughts on any of that yeah yeah yeah so we used our own money first on the first few and then we started raising

money from investors on the next few we did a couple of promisary notes um and

and then we did a couple syndications through a syndication fund we created specifically for assisted living deals

and for partnering with others raising money for folks like in our mastermind and so that we got into that once we

were more comfortable with the asset class we understood it a little better so that that has definitely helped us and so what we try to do now is tell

others hey it’s not that scary to raise money you’re the cool thing about it is you can offer returns to to your friends

and family that they would never get anywhere else by partnering with you and as well as just help people raise funds

if they want funds raised for them kind of thing but yeah that that journey’s

been interesting because we didn’t start raising money either until last year or maybe a little over a little before that

but found we absolutely loved that piece too but definitely the financing piece can be tough and you’re going to have to

bring some sort of bank financing or SBA financing as well as probably raise some money to make it happen most people and

so we wanted to make sure we solved those challenges but you’re absolutely right having a W2 helps banks approve you more easily

with SBA it’s going to be a personal guarantee they want to make sure that this gets this loan gets paid off and so

having that W2 or having multiple W2s is helpful and for me okay I’m now not a W2

earner however I’ve got a little trick here i have a personal entity that’s an S corp and it pays me a W2 and so any of

the active incomes I have whether that’s commissions or whatever else all of that

flows through there and then I pay myself a W2 so that over time I’d have a

better opportunity to turn entrepreneurship into lendable right if you do just go right into

entrepreneurship it’s going to take a few years and they don’t they banks really don’t like 1099 income they just

don’t just they just don’t see that as regular income so I would say if you’re trying to get into this and you have a

W2 it is a good thing to get the business launched on the side first and then make the pivot from a lendable

perspective and I wouldn’t assume that you can get something like this launched

immediately right like in the shortest term even if you buy an existing business you’re still talking about several months if everything went

absolutely perfectly without any hiccups and in the longer term like the project we’re doing is going to take 24 months

from the day we close to the day it’s stabilized this stuff is a long game and you have to be able to make it through

those stretches until then that’s why I say like when people get excited about leaving their job it’s because they’re

excited about something else it might not even be that you actually don’t like your job it might just be that you like whatever you’re thinking about more but

I I do think that patience will serve you well on the lending side and also just like creating comfort and stability

for your family in most cases right every situation is different but I think the lendability piece and like being

able to engage with banks especially if you have a several million dollar type of deal it’s going to make it a lot

easier for you upfront i think a lot of people don’t believe they have the time to do both i just want to squash that

limiting belief right now like you you can do both you can build a business that replaces your W2 income while you

have a W2 bajillions of I don’t know how many exactly people have done it but I know a

lot of folks who have i have and that that also is a good metric so if you’re like okay I have a W2 i’ve built a

business on the side or I bought a assist living home or two and when is a good time for me to now exit my W2 my

answer would be if you got folks depending on you then when your entrepreneurship income is stably

greater than or equal to your W2 income that’s that was the factor for me and so

I think that’s a good thing for people to aim for if they’re not really sure and yeah there’s a lot of folks out there that’ll be like “No burn the boats

and you got to go all in and forget the W2.” And you can take on that kind of stress

if you really want to i wouldn’t it wouldn’t be my first choice i like the

way I did it and yes it’s going to be a lot of work to do both you’re going to have to give up nights and weekends but

if you get your family on board with the plan and show them the vision of where you’re going to be what that’s going to

enable how you’re never going to have to work for somebody else for the next 20 30

years you know a year or two of sacrifice can be worth it 100% and and

maybe you’ll get to walk your own daughter to to kindergarten that’s right that’s our plan at least but one last

thing I want to make sure you get a chance to touch on so you mentioned the fund and how you guys raise money for

your own deals and then you’ve also started being able to do that for members of the community maybe you can talk a little bit about that yeah we’re

really excited about it because when we spoke to our syndication attorney and we

spoke to a couple other folks in the space who run the software for syndications and stuff all of them said “Wow we’ve never heard of an assisted

living fund.” We’re like “Okay cool.” So we we launched this with the intent of

being able to raise money for both our own deals and for others and we’re excited about that that’s we are also

doing the thing we’re buying existing and looking for our development start as

well but along the way we find that a lot of folks are going to need more money than they have and so if they

can’t raise that money on their own which we’d love for them to then we’re offering to to step in and and help on a

case- by case basis which is really cool because we can all continue to succeed

together and with my partner Alex it gives us the ability to raise money easier I think than most because due to

his platform which is cool Physicians and Properties if there’s any doctors listening check out that podcast but

yeah so we’re excited to continue to do that especially with our membership because that’s really our focus if we

can help our members succeed and then we all win doing it together because now we’re partnered on it i just man it’s

just so cool it’s everybody wins yeah I’m sure it’s cool you’re still about

not even one year into the mastermind being live but even just seeing some of the people that joined at the beginning

get further and further in their journey get closer to opening their home or maybe opening their second home or whatever it is i’m sure that’s just

amazing to watch right and just to know that you can play a part in it and then to have this funding arm that can help

people when they’re either not comfortable with it or maybe they need to get raise a higher number it’s just

really cool to see that you guys have built tools to empower people into this space that’s so important so impactful

and then of course like there’s it is really a win-win because people can make life-changing money doing it and they

can provide the service to society that we all know we’re going to need over the decades to come so I I bet that feels

really cool dude it’s so exciting and the model’s going to keep changing too there’s going to be even better ways to

partner there may be financing in the future man there’s so many so much opportunity here to provide good

products and bring stuff to the space to allow people to succeed faster we don’t even know yet what it’s going to look

like but it’s going to continue to get better too i love it on behalf of my wife Andrea and I also just I’ve told

you many times privately but I’m happy to say it on air joining your guys’ group discovering I I heard Alex on a

podcast joined your guys group right at when you started it has dramatically altered the trajectory of our life our

investing journey in such a positive way never seen her more fired up about an idea we’ve never been closer as partners

entrepreneurs we really feel like we’re entering a new chapter of prosperity in our personal lives not just financially

but also just from knowing the impact that what we’re working on can have on

our community around us and you guys played a very large role in that so I can’t thank you enough dude that’s

awesome and your guys’ passion just overflows and keeps everything exciting for us too so we love that i love it if

anybody wants to find out more about you Charlie or the Row Room or Open Range where can they find you yeah best place

to go is the room.com or shoot us an email team at the room.com that’s just the easiest way to get a hold of us we

got there’s too many socials or other things to share yeah that that’s the best way they can also check out our podcast or YouTube channel same name

join our Facebook group whatever is best we got a lot of free content a lot of good stuff out there i love it we’ll

make sure to include links to all the various entry points in the show notes and Charlie this will not be the last

time I have you on the show but I’m glad we got the first one and thanks again for coming thanks dude really a pleasure

thank you for making it to the end of today’s episode as you may know podcasts are very difficult to grow organically

if you’re getting value from today’s episode I’d deeply appreciate if you could take 30 seconds to leave my show a

five star rating and review this will go a long way to helping me reach more listeners just like you thank you so

much in advance