Imagine waking up one day to find industries across the globe tapping into a market that's been overlooked for too long - senior housing. That's the pivotal topic we delve into on this episode, with our esteemed guest, Chad Anfinson of Silver Treasures Senior Living. Together, we dissect the urgent need for housing for our eldest population, the opportunities it presents, and the significant challenges it brings along. As we traverse through this under-served market, we shed light on its potential promising returns, and the need for innovation and reuse of existing structures. We even delve into the culture of the industry, underlining the importance of a people-first approach.
The conversation doesn't stop there. We meander into the financial landscape of assisted living entrepreneurship, examining its unique intricacies and the impact of the current lending climate. With Chad’s expertise, we discuss the importance of having a knowledgeable partner in the industry, and how the role of owner financing can make or break a facility. We also consider how family offices and wealth management firms can contribute to this sector with potential for significant returns. The benefits of being an owner-operator in the assisted living business are not left untouched, as we discuss its potential advantages to one's family and net worth.
Our final lap takes us deep into the heart of senior living communities - their physical systems, equipment maintenance, and the costs involved. We also delve into the importance of reputation in this business and how word of mouth can pave the way for unprecedented opportunities. We couldn't wrap up without discussing fall prevention in assisted living, how technology can be leveraged to aid in this, and the importance of understanding an individual's routine. As we round up, we highlight the potential for investors interested in contributing to the care of our most vulnerable populations. This episode is not just about the senior living industry, it's about a community in need and the opportunities that lie within.
Imagine waking up one day to find industries across the globe tapping into a market that's been overlooked for too long - senior housing. That's the pivotal topic we delve into on this episode, with our esteemed guest, Chad Anfinson of Silver Treasures Senior Living. Together, we dissect the urgent need for housing for our eldest population, the opportunities it presents, and the significant challenges it brings along. As we traverse through this under-served market, we shed light on its potential promising returns, and the need for innovation and reuse of existing structures. We even delve into the culture of the industry, underlining the importance of a people-first approach.
The conversation doesn't stop there. We meander into the financial landscape of assisted living entrepreneurship, examining its unique intricacies and the impact of the current lending climate. With Chad’s expertise, we discuss the importance of having a knowledgeable partner in the industry, and how the role of owner financing can make or break a facility. We also consider how family offices and wealth management firms can contribute to this sector with potential for significant returns. The benefits of being an owner-operator in the assisted living business are not left untouched, as we discuss its potential advantages to one's family and net worth.
Our final lap takes us deep into the heart of senior living communities - their physical systems, equipment maintenance, and the costs involved. We also delve into the importance of reputation in this business and how word of mouth can pave the way for unprecedented opportunities. We couldn't wrap up without discussing fall prevention in assisted living, how technology can be leveraged to aid in this, and the importance of understanding an individual's routine. As we round up, we highlight the potential for investors interested in contributing to the care of our most vulnerable populations. This episode is not just about the senior living industry, it's about a community in need and the opportunities that lie within.
Happy staff make happy residents. It's culture. And culture can't necessarily be fake. It takes time but it comes from the top and that culture, as an owner operator, you kind of establish that culture. People are watching you. They're watching how you relate to the staff members, they're watching how you relate to your residents. They pick up on it, they want to follow your lead. And if you're somebody who sits down during lunch and just has lunch with two or three residents and enjoys just the talking and they see that you actually are caring, staff want to be like that too, and that's kind of how the culture begins. And then once you appreciate somebody's hard work and their efforts, that in turn gets paid forward because they'll go around and they'll act the same way to their peers.
Speaker 2:Welcome to the Senior Housing Investors Podcast. If you are an owner operator, investor, developer or buyer of senior housing, you've come to the right place. The best way to stay connected with us is to sign up for a weekly newsletter at HavenSeniorInvestmentscom. This podcast doesn't exist without you, our community. Thank you for listening and reach out to us anytime.
Speaker 3:Welcome back everyone. Today, our host, john Haber, is having a conversation with Chad Anfanson, with Silver Treasures Senior Living. Listen in as they discuss a variety of important topics, including current concerns in senior living, as well as success stories from their unique franchise model, john.
Speaker 2:Well, thanks, kelsey, and I have a pleasure to have Chad on again on our podcast and the reason I wanted him to be on again and he and I both agreed that it was so important to address a major issue in the senior living space and that is to meet the evolving needs. The senior housing industry requires an astounding 775,000 additional new units by 2030. That's six years away, chad, and if we maintain the current penetration rates and development activity, that's what's needed. If we maintain the current development pace until 2050 and compare it to the required development to meet demand projections, an astounding gap of approximately 1 trillion in investment emerges. Those are huge numbers.
Speaker 1:Massive numbers right. My belief is the only way that we're going to meet those numbers is if we get people that we normally wouldn't see developing or getting into the industry or getting into the business, if they start looking at it and saying that this is a great opportunity not only to take care of others, but also to from a business perspective. So I just don't see how we're going to be able to meet that demand unless we find new people to come to the table, right.
Speaker 2:That's correct, and you and I both have many conversations during the week with individuals with a tremendous amount of heart that want to get into the business for one reason or another, and you and I have these discussions with individuals about the pros and cons of owning an assisted living business. And so let's we're going to spend some time today addressing this, because we you and I believe that it's extremely important to really put out to the marketplace the reality of owning assisted living independent living facilities. So let's get into that now and let's start off with a real positive aspect of owning assisted living, and that is about the market conditions that we're currently in.
Speaker 1:Yeah, I mean the market conditions are extremely favorable. Not only are they favorable now, but they're going to continue to be favorable. When we talk about the supply that we currently have and how we're currently our current building practices are, we can't meet the demand. So therefore, that does open up the doors for a lot of opportunity, which also means that from a census standpoint, from a marketing standpoint, the customer is there and it's a need driven business. So therefore, the opportunities are extremely favorable. They're in our favor. You know it's a great position to be in is what I would say. It's a real estate, it is the opportunity to get involved in real estate, but it's also to need driven business to take care of others, and the way that we look at the market, especially as it pertains to seniors, is that we need to help them age appropriately and we need to do it with assisting them and remaining independent, whether that be in a facility or a community or that be even in the home. So any of those types of businesses that it's favorable for us.
Speaker 2:When we talk about the market as being favorable, it's the baby boomer's age. Right now, the oldest baby boomer is 77 years old. There is such a tremendous need in the marketplace that we actually have a crisis on our hands. You and I know we need to encourage the marketplace and those that are business people, entrepreneurs or others nurses, doctors, whomever it may be we need to all participate in making sure that we have housing for our most vulnerable populations.
Speaker 1:Yeah, and I think when we talk about favorable market conditions and we talk about meeting the demand, I think it also opens up, as a pro to that, it opens up the idea for innovation. It opens up the idea for the creation or the restoration of certain commercial type buildings that could be turned into some form of senior housing, especially on that affordable level, that middle market level, which is something you and I have talked about quite a bit. I'm not necessarily sure that it's going to be just a straight oh, I want to have a raw piece of land and I want to build a brand new building. It might look like hey, I have this commercial structure that I've picked up because it got turned back to the lender and I want to turn it into apartments for seniors. So I think that's another position where the market is going to be very favorable.
Speaker 2:I agree, and so that reuse of buildings, even older structures, which, that is, statistics just came out in regards to how many actual current assisted living facilities are older than 25 years old, those are becoming obsolete unless someone comes in and cleans them up makes them relevant for today's marketplace. There's huge business opportunity available in the rehab of older assisted living, memory care, independent living facilities. So you and I love to talk about how great it is in this business, but there's also the challenges that we have in this business, and so one of those today everyone's talking about it in the commercial real estate industry is the access and acquiring capital. Can you? Let's talk a little bit about that.
Speaker 1:Well, you know, it's obviously it's. Especially with the economy the way it is and with interest rates the way they are and whatnot, the access and the acquisition of capital is a lot more difficult. It'll be interesting to see over the next few years five years, 10 years if we see, because of this issue that we're going to have with meeting the demand for senior housing, if that's going to be relaxed a little bit. The access of capital is going to be relaxed a little bit, but right now it's not. So the cost of that dollar today is a lot more than it was, you know, five, 10 years ago. And so the access to capital is something that you have to work very hard at.
Speaker 1:And for us, when we go in with a franchise, you know we have a franchisee come on board. You know we're helping them down that pipe with the SBA loans, but they have to also have the down payment you know for that particular loan set up. How they get that could be extreme, it could be creative, it could be family, friends, what have you? But not everybody has that at their disposal If you're someone that wants to get into the business and you're just a private owner and you don't have a large group of investors behind you, it is going to be difficult to access that capital. And that capital Not only you need that to build, but you need that to sustain while you're trying to go through stabilization mode. So it's one of the more difficult pieces of getting into this industry.
Speaker 2:It is, and currently the latest quotes we've gotten from SBA for our clients are around the nine to 10% rate, and those are variable rates and so you know we expect, as of the beginning of October, the Fed has maintained a federative, I think, 5.5%, and they have given no indications that that's going to increase, but they haven't given any indication that it's going to go down.
Speaker 2:So we're pretty much stuck here for a while, especially through 2024, at that Fed rate being at 5.5, which means that most of the capital loans from banks, regional banks, agency loans are sitting anywhere between 8, 7.5%, 8, 9, 10%, and that means that if you're acquiring a facility or a building, that the return has to be greater than what you're getting your capital for. So, as you've mentioned, we believe that the sellers of assisted living facilities now understand the environment and they're coming to the table with owner financing, and we're seeing deals being done today on the brokerage side of our business where the owner financing is coming in at 5% and the owner financing is coming in at 20% of the total acquisition costs. So that's very, very helpful. And so, to those who are thinking about selling their assisted living facilities, keep in mind owner financing is a key part of getting that facility moved.
Speaker 1:Yeah, I mean, I definitely think that with a problem like this, we see ingenuity and we see innovation and we see invention and we see creativity. A lot of what we've seen over the last year or so has been some pretty creative financing from both parties, whether that be structured on a seller financing with capital upfront and balloon payments through, or that be structured with payments going through lease payments up until a point when the rates drop and something on the back end. We're seeing people on both sides become very creative and those that want to exercise their exit strategy and sell their community. It's wise for them to keep that in mind, that to be creative when coming to the table.
Speaker 2:I agree, and one other area of those that reach out to us has to do with developing new facilities. What we're seeing out there is, if you do not have experience in developing and or senior housing, it's not going to get done in today's environment. You've got to have a partner that is going to sign on the bottom line on the note, that has experience in the senior living market. So maybe that will change with government intervention in the future because of the crisis that we have on our hands. But at this point, lenders, banking, private equity is not taking a risk on those who do not have a team of eased individuals.
Speaker 1:Yeah, exactly, and I'm not sure that's going to change. I think any smart business person would know they need to have somebody on their team that understands the ins and outs of the business and that can make that money work for the investor and whatnot. Hence why we do what we do over at Silver Treasures and for our franchises, so that we can help our franchisees get the loan, because we've been doing this collaboratively for 100 years now with our three partners.
Speaker 2:To those who have family offices and wealth management companies. This is a great opportunity with great returns and the ability to invest in a business and in people. That is socially part of the fabric of society and also it's good for everyone involved. So love to have family offices and wealth managers step up to the plate and bring capital to the market. So let's talk about another pro of being in the assisted living business and let's get down to the entrepreneur level, where you're coming in as an owner operator. Give us the pros of what that does for an individual and their family when they become owner of an assisted living facility.
Speaker 1:Well, I think one of the biggest things we all look at is when we go into business. We want to be able to put food on the table and make a living, and so many of us want to set up for generational wealth right Something for the future. So I think we really do have to take a strong look at your 16 beds and up is what we kind of focus on, and I think we need to take a good look at that. Income and salary of an entrepreneur. That comes in when you're talking 16 units and 20 some odd beds, and the average rent rate across America right now is ballpark is 4344 somewhere around there we start running the math and then having a good business background and controlling your expenses wisely, controlling your business while giving great care, at the end of the day, your annual salary is going to be over $100,000 a year. That is significantly higher than the average of pretty much every state If you take a look at state the state average of income. Now, you've put a lot of hard work into that, so but, with that being said, that is a fairly healthy salary. It also to you also to have to take a strong look at what you've done to increase a piece of real estate, your net worth is quite significantly higher than most for us.
Speaker 1:Just throw some random numbers around a 32 unit community on three and a half acres of land. Its value is going to be anywhere between $4.5 and $5.5 million. Your exit strategy may be five, 10 years. At stabilization you could be looking at a $6.5 million exit, which I don't know, but most people are not retiring on $6.5 million. When we talk about what did it cost to get into that business, if you had an SBA loan, you were somewhere around 20 to 30% of the down payment is what you had to come up with. So if you did achieve that and you did get the financing and whatnot, the reality is that's what it cost you out of pocket to build a $6.5 million business. If we look at it that way, it's very, very strong in any market.
Speaker 2:For that owner operator. The work never ends, does it?
Speaker 1:Never, and that's the con right. You are an owner operator, so therefore you are hands-on in these medium-sized facilities 16, 32s, 24s, what have you? You're it. You are probably hanging your name on the door as the administrator. You are helping out with activities, you're helping out with some maintenance. You're helping out with. You're wearing a lot of hats. You have a lot of hats that you're wearing and that's one way that you're minimizing your labor. Now, later on, if that's something that you want to step away from as long as you're comfortable with it, as long as that you're comfortable with turning over your baby, so to speak, to someone else to run with your vision, then, yeah, you can still step away and be and, let's say, manage from 10,000 feet versus ground level. There's always that opportunity. I wouldn't suggest it in the beginning, but later on, once you stabilize, I think that is something that you can look at doing.
Speaker 2:And I think in the smaller unit sizes, having an amazing executive director on board to run the operations is key. That allows you to use an owner to step away if you have key people in place and we really call that a people strategy, really understanding how you can put great talent in place so that you can leverage that talent and step away of the day to day. We do have individuals come to us that maybe they're coming out of multifamily or such and they say we want to own and build or own a 32 bed and we don't want to run it. And I typically say to them that it's not a real estate play, it is really an operational play and that it's going to be very difficult for you to find a third party management company that's going to take on a 32 bed. It's almost impossible.
Speaker 2:Typically, third party management companies are looking to manage properties over 50 beds or greater and typically more of 60 beds or greater the number of units. You may have three acres of land and it has 64 beds on it. That makes sense for a third party manager to come in there and manage it. If they're dispersed, then you really need that executive director, that individual or yourself, along with the executive director running that facility. So it's amazing, some of my mentors, chad, one of them has 320 beds spread out through Denver and I asked him. I said are you still having to get up in the middle of the night to cover a shift? Yeah, every once in a while I still have to do so. You're never truly out of the business, and so that kind of rolls into what it takes. In today's marketplace, in today's labor marketplace, how do we acquire and keep talent?
Speaker 1:Yeah, I mean, that's definitely for me. I look at that as a con and a pro. The con is the acquisition and maintaining these talented people on your team. That's the con. Acquiring in is number one and then keeping them as number two. It is extremely difficult in today's time to find what I would say talented caregivers, those that do it for passion and are OK that they could be probably making the same money at a fast food place. They could be a cash register or something of that nature. We've had so many different types of industries enter our labor pool because the wage rates that they're offering now the wage rate.
Speaker 1:Starting wage rate here in Florida or the Southeast will say Chick-fil-A. The starting wage rate in Chick-fil-A is like $13 to $15 an hour. Well, that's about the same wage rate that we're seeing for your caregiver or your CNA in an assisted living facility. So those that have passion for it, that love taking care of people, that's who you're trying to attract, because you're paying them about the same wage rate that they could go do another job that is less labor intensive is what I'd say less emotional intensive. That's very difficult.
Speaker 1:And then maintaining and keeping that talent is another one. Keeping talent, there's a lot of different. I don't want to call them tricks, but it's just. You know, do you want to others, as you would have done to you, let people know that they're doing a good job? Remind people, thank them when payday comes around and you're handing out checks, you know handing them a check and say thank you for everything. When time comes up, that there's an opportunity to provide a raise based on merit or based on time or what have you, or even a small cash bonus here and there. Do those things make them feel valued?
Speaker 1:We talk about people leaving for a quarter or more, but that's not really why people are leaving all the time. No one really leaves for 25 cents more an hour. It's something else, and if they left you and say that, it's because you have a dug deep enough into what's the real reason behind it. Now, the pro to all that is is, once you acquire those folks and once you can learn how you maintain them, you have a staff that will follow you everywhere. They will be with you, they will be part of the process. They're part of the family and those folks right there are their top notch. They will be there with you thick and thin and you bring them in on the business and explaining why we're doing certain things. It's just a great feeling to have people like that around you, and when you surround yourself with those that are better than you, you will be successful. And caregivers, line staff, whatever you want to call them when you find those people that will stick with you like that, it makes life a lot easier.
Speaker 2:There's been many examples in the marketplace of great culture-based assisted living companies that celebrate with their employees and their frontline staff and their middle staff, whatever it may be, but they are one big family. They love each other. We're talking to the investment community out there and they ask us what typically are the margins of this business? And good operating businesses in this market are ranging anywhere between 32 to 37 percent margins and as an individual myself with a heart for our caregivers, I'm saying can we reduce those margins and give more money to our employees? And I think we can.
Speaker 2:I just think we're setting expectations in the marketplace that these businesses are returning that percentage 30 to 35, 37 percent rather than saying, hey, we'd much rather have a lower turnover and happier employees and have lower margins. Because if our employees are happy and our caregivers are happy and our maintenance guys happy, then our residents are going to be happy. But if we have employees that are stressed, don't know if they're going to be able to pay their rent, don't know if they're going to be able to pay childcare, then they really are not focused in the present to take care of our residents. Do you agree with that?
Speaker 1:I agree 100 percent. I mean I've sat around many of department head meetings and said you know, happy staff make happy residents. Again, like you said, it's culture. And culture can't necessarily be faked, it takes time but it comes from the top and that culture, as an owner operator, you kind of establish that culture. People are watching you. They're watching how you relate to the staff members, they're watching how you relate to your residents. They pick up on it. They want to follow your lead.
Speaker 1:And if you're somebody who sits down during lunch and just has lunch with two or three residents and enjoys just the talking and they see that you actually are caring, staff want to be like that too, and that's kind of how the culture begins. And then once you appreciate somebody's hard work and their efforts, that in turn gets paid forward because they'll go around and they'll act the same way to their peers. And that's how culture gets established. And it costs more to turn an employee than we think it does, not only to the bottom line but just overall loss of efficiency, loss of productivity, the loss of a member. You know when somebody's worked with you for five years and now they're gone and you're used to talking to them every day, even a peer that can affect them right. So it costs more than what we see just on the bottom line and with on-boarding and drug testing and whatever else we have to do, training and all this other stuff. There's more to it besides that.
Speaker 2:Once again, happy staff, happy residents. Well, guess what the residents who they're talking with, they're speaking with their family members, who are their family members speaking to in the public. And all of a sudden, if your facility is getting a reputation of top notch five stars on Google, great write-ups, all of a sudden, when the individual who's deciding where mom or dad are going to go, they're doing their research and they're going to put their mom and dad in a place not based always on money, but based on reputation and culture, right yeah.
Speaker 1:And that drives definitely into a pro where not only are you building a reputation, but you are providing a much needed solution in your community. You're going to be looked at as a solution provider for seniors, You're going to be looked at as a resource for seniors. When you build that culture and then from that point people are talking about you in the community, they know that you're a solution provider for those seniors living in your building and it comes a lot easier down the road if you want to build another one, especially in a county that may be very wide or big, so to speak, with an upper population, more population than most. When you go and decide that you want to expand the county, the county is going to make it very, a lot easier for you. I agree.
Speaker 2:Reputation, word of mouth is everything in any business, and so we've been talking operationally and let's get into more of the physical, plant side of the equation the building itself, because the building itself is housing residents and that building needs to be maintained. It needs to be updated, but tell us a little bit about the type of stories you have regarding a piece of equipment going out and what individuals who are new to this business should expect when it comes to maintaining a system. Yeah, the facility.
Speaker 1:I mean whether you acquire a building or you build a brand new building, you've got to still maintain it. You've got to fix things, You've got to keep up with it. You know the physical plant maintenance isn't just about room flips and redoing apartments so a new moving can come in. It's about doing the preventative maintenance and the carpet cleaning and the touch-up paint around the building so it can look a certain way and it provides that feel. But it also too, has a lot involved because you have a lot of heavy equipment. You have generators and you have large HVAC units that have to be maintained. When those go out it's expensive. If you don't maintain them they will go out.
Speaker 1:Buildings that are two stories, they're required to have elevators. Elevators are expensive to maintain. You have to have these contracts and you're not necessarily doing that work yourself. You're having to make sure that you call the person to come out on a regular basis. Anytime you build a commercial kitchen, be prepared. You know sometimes we're running gas and propane and you have your troubles with that. You've got your stoves and your freezers and your walk-in freezers and what have you?
Speaker 1:There is a lot of heavy equipment within a senior living community that needs to be maintained. It costs to operate it. There's an expense to it. You can't bypass it. You can't go without some of this stuff. You can't run a community that has two 15 ton HVAC units and run it on just one. You have to get these things fixed. There's a cost to that and there's a knowledge to it.
Speaker 1:As an owner operator, get heavily involved in how these things operate, what they do, so that when someone does come in that's a third party, because you probably don't have someone on your team that is HVAC certified or they're not an electrician, or they're not a skill, they're not a plumber per se. Understand how these things operate. So when a third party comes in, you understand what they're telling you, what needs to be repaired and what that cost should be, especially in buildings that you are acquiring. Know it forwards and backwards. Learn it. Be the person they come to talk to if something breaks down, so that you can explain this is how it works. This is what it needs to do. I've got the number to call. I'm going to take care of it.
Speaker 2:Those are great points, chad, and I'll give you an example of maintenance and I was taking a buyer through a property, two separate properties. They're both part of the same operating company. One property he walks into and he's like this is beautiful, this is wonderful. And then he goes to the second property and flooring is coming up. Windows are not fixed on that particular property.
Speaker 2:There's a lot of maintenance that still needs to be done, and he was so disappointed he actually walked away and said you know what? I'm not interested and it could kill a sale, it could kill your ability to be able to dispose of your assets if you don't maintain the physical plant. So, whereas when I walk through a property that we're looking to list on the marketplace and it's absolutely beautiful the spirit as we're walking through feels highly happy and energized. The staff are happy. I know that when a potential acquirer is going to walk through it, they're going to feel the same thing I feel, and so being able to, you know, roll up both the physical and the employees into a harmonious and happy environment is key.
Speaker 1:And the employees in general can help with some of this preventative stuff that can help you maintain the community longer, right, when you're running these what we call them PTAC units. So individual apartments have these PTAC units that you would see like in the hotels. You know cleaning that filter out isn't real hard. Once you show a staff member that all you need to do is pull this little filter out, rinse it off, dry it off, put it back in. That saves that unit. Whether you believe it or not, if those things aren't cleaned out on a regular basis, you're going to be burning through those PTACs quicker than you think. And we look at those PTAC units as just disposable units and a lot of times they are because they've run you anywhere from $300 to $500, $600. However, when your operations is growing and you're not stabilized, that $600 for the new PTAC unit hits hard. You know it's a large percentage of your expense, right, so it hits hard. So help getting the staff involved to help you do some of these items will save your community in the long run.
Speaker 1:Probably the one that I talk about the most is a building that we looked at and we actually purchased it. This is I was with a different company and we didn't really do a great job at looking at the roof. And the roof was a what we would call like a membrane or bladder roof and we didn't do a real good job at looking at it. And when workers would go up there they didn't clean their feet, so a lot of times they were bringing items up there on their shoes that were piercing the membrane. Well, eventually that membrane it contracts and swells and goes back together. So these holes get bigger and bigger.
Speaker 1:So eventually we started to see watermarks on the ceiling and it turned out that that membrane should have been replaced. Regardless of the timeframe or the age of it, it should have been replaced or repaired. And they weren't doing. The owners before were not doing that. They weren't going up to the membrane, checking it out, checking the roof out, patching it, doing whatever. They just kind of ignored it and it's not something that you can ignore that cost us thousands upon thousands of dollars to repair. Eventually we actually redid that whole entire membrane roof which was I can't remember what the ticket price was on it, but that's just an example of something that, if you just check it periodically as an owner operator, know the inner workings of that of your building and know when something doesn't look quite right and when you should maybe do something about it now versus waiting.
Speaker 2:Those are great points, chad. Thank you. You know we're going to get into one more con and then we'll get into a couple of points on the real positive aspects of owning an assisted living facility, one of the largest not the largest, but it's there. It should always be on our minds as the fear of losses. Can you address that?
Speaker 1:Yeah, I mean, I think in this day and age where every commercial in the morning you see is about an attorney and it's about, you know, because we see this need to put our, we put seniors into these communities, we have a lot of attorneys that are looking for the falls. You know, was the fall taken care of appropriately? You know the cost and the fear of lawsuits can be damaging, not only the cost but just the fear of it seems like it's always lurking around. When a resident does fall in your community. It's a fear right off the bat. You're wondering, you know, did I do everything right? You're worried about a family member, you know, calling the local attorney and even if they don't have a case, a lot of times it's just easier to settle because the cost to push it any forward I don't always suggest that, but the reality is is that's always going to be on your mind Anytime you take care of somebody and you're being held accountable for their health, per say, there's always going to be that fear.
Speaker 1:Because we are a litigious society, a lot of people are litigious, they're looking for it and that's unfortunate. It has driven some communities to be self-insured, which, if you go into a $250,000 lawsuit and you settle at that, you're probably done operating. That's the reality of the situation. So, yeah, it's not something we like to talk about, but it is something we should talk about.
Speaker 2:So let's talk about the means of being able to reduce the risk associated with lawsuits. One of those is I've walked into facilities and they don't have cameras that are pointing toward the dispensement of pharmaceuticals within the community. So let's talk about more of those preventative measures that investors, owners, operators contain.
Speaker 1:I think a good one is that you should train everybody in spotting subtle differences to the best of their ability, meaning if Ms Mary looks unstable today versus yesterday, we should just go ahead and call let's get an order for rehab or strengthening or something of that nature. I think we need to be more preventative and fall risk than we are. There's no expense per se to enrolling a resident into some type of therapy so that they can maintain independence, and I don't know why we don't do that enough, other than residents at some point in time just decide I don't want to do that, and they have that choice. But it's also to being upfront with family members and explaining to them that assisted living facilities cannot necessarily stop a fall. They can reduce the risk of a fall. So having that conversation with families right from the get go make a lot of sense.
Speaker 2:So technology, let's talk about technology. We continue to hear in the marketplace that there's technology that helps in terms of fall prevention. Have you employed or deployed technology into your facilities at this point?
Speaker 1:In ours we haven't as of yet, but I've been very fortunate to work with companies as a consultant on this technology front, working with artificial intelligence that tracks data in small increments and then from that data can pinpoint when we see something is off and then from that point reports back to us and then we can do something about it. Somebody's gate is off, Somebody's walking speed is slower than normal. These data points are all collected and then it's pushed to a nurse or director of care who then can make the decision to go ahead and enroll or call home health or call the physician for a doctor's order for physical therapy. I think that that's going to help a lot of people, a lot of companies, if they employ this type of technology. I also do think there's balance technology that's out there.
Speaker 1:If we're just talking about falls, I think there's balance technology that's out there.
Speaker 1:I think that can track where someone's balance is today and what can we employ to increase their balance. And then some really simple things is really removing fall risk from someone's apartment and having a really good understanding of what their routine is. If my routine is that I get up every night around 2 am to go to the restroom, I as a caregiver, as a facility owner it's good for me to know that, because I'm a much higher risk of fall at that time, so it's good to know those things as well. So we've employed a lot of those things. We have kicked around the idea of some of this wearable technology that's out there. Again, I've had the fortunate opportunity to work with a lot of those groups and talk about the different data points that should be collected, and I think that's going to help us in the long run. I think it's also going to help us too when we talk about staffing. I think it's going to allow our staff to be a lot more productive and effective.
Speaker 2:Those are great points. As AI I get setter and better at understanding data points, the better that we're going to be able to operate our facilities. An interesting thing is, as I had an individual CEO, aroshi, his first name has reached out to me via LinkedIn and it's a Japanese company that he started and it's called Magic Shields. Now, this is not a plug, I'm not getting paid. I just think it's amazing, and what they've done is that they have developed a unique patented flooring technology that protects elderly people from injuries like fractures when falling, and so I went to their website.
Speaker 2:I'm like this is what this industry needs. This is what homes, even home care needs elderly need in their home. Is this flooring, patented flooring material, and I don't know fully what it is, but if you go to magicshields like believecom or Google Magic Shields, you'll see this patented technology, very, very cool stuff. So great technology. Artificial intelligence, flooring products and really having staff keep an eye on the residents is key. So is there Chad? Is there anything that we haven't addressed today? Before I get into really the bottom line in regards to owning assisted living, memory care or independent living facilities, is there anything we haven't addressed?
Speaker 1:You know, I think at the end of the day, I mean, I think one thing to really take into account, especially from a pro perspective, is that you're running a business with a cause. You are. You're actually providing great positive feelings and building strong personal relationships with families and residents, not only in your personal community but outside you, and I think you mentioned it earlier you're adding value to the society around you. You are someone that you're looked upon and kind of put up on a pedestal because you're someone that has that care and that compassion to take care of someone who's not even related to you and you talk with others about that, like they are your own grandparents or your family Mom and dad. You know, a business with a cause goes a long way, a long way, and we need more people so that we can meet the demand. We need more people that are understand that business with a cause and what they're going to do in their communities for their seniors.
Speaker 2:I wholeheartedly agree. And to those investors out there that want to passively invest in this business, you are doing social good. Your money is going to be used very wisely to take care of our most vulnerable populations, and that is a great legacy to live to leave to this world is to use your given assets that you have, or provisions, and use it for the good of society. So, chad, I really appreciate the time Again. I really enjoy speaking with you. You and I are on the same page when it comes to care and investing and building. I've really enjoyed our conversation today and hope you have a awesome weekend, okay.
Speaker 1:Yeah, I appreciate your time too. Thank you so much for having me back on. I really appreciate it. I'm glad that we had the opportunity to do this.
Speaker 2:If you want to get a hold of Chad, listen to the previous podcast, one or two down the line, and it talks all about the franchise system that he has, and let's go get them.
Speaker 1:Yeah.
Speaker 2:All right, Chad, have a great day.
Speaker 1:All right, john take care All right, bye-bye, bye-bye.