Haven Senior investments is blessed to be joined by David Lewis, CEO of Rocky Mountain Assisted Living located in Denver, Colorado. With decades of experience in the home care field, David moved to Colorado from Southern California in 2007 and recognized the need for a different senior care model in the Denver area. David determined the small home-like setting was the next best thing for seniors needing 24-hour care, outside a nursing home or medical facility. This is when Rocky Mountain Assisted Living was created—a community of 16-32 bed residential-style care homes that offer services and amenities found in much larger corporate companies, but provided by a family-owned and operated business, cutting out constant management turnover and lack of personal connection. By the end of 2021, Rocky Mountain Assisted Living will have 200 beds in its portfolio. Listen in on this wonderful interview.
Haven Senior investments is blessed to be joined by David Lewis, CEO of Rocky Mountain Assisted Living located in Denver, Colorado. With decades of experience in the home care field, David moved to Colorado from Southern California in 2007 and recognized the need for a different senior care model in the Denver area. David determined the small home-like setting was the next best thing for seniors needing 24-hour care, outside a nursing home or medical facility. This is when Rocky Mountain Assisted Living was created—a community of 16-32 bed residential-style care homes that offer services and amenities found in much larger corporate companies, but provided by a family-owned and operated business, cutting out constant management turnover and lack of personal connection. By the end of 2021, Rocky Mountain Assisted Living will have 200 beds in its portfolio. Listen in on this wonderful interview.
Welcome to the senior housing investor podcast. If you are an investor or want to be an investor in senior housing, then you're in the right place. Hi, I'm John Hauber of haven senior investments. We are pleased to present our newest episode where we bring you the innovators and leaders across the full spectrum of assisted living in senior housing, all of whom provide for the betterment of our senior population. The host of our show, Pamela Pimm's has background in the industry. And she will be interviewing our honored guests.
Pam Pyms:Hi, Pam. Hi, john. Thanks very much. It's great to be here. Today, we're with Dave Lewis, from Rocky Mountain assisted living. And I've had the pleasure of knowing Dave, since before he even started this business. And I'm delighted to interview him today. Hi, Dave. Hi, Pam, how are you doing? I'm good. How are you? I'm very good. Thanks for having me on the show. I'm delighted to talk to you because I know you and I know you've got a fun story. So why don't we start with your background and tell me a little bit about how you decided to get into and develop assisted living communities?
David Lewis:Sure. I, my story actually goes back to about the year 2000 when I started in home health care, non medical homecare, working for my friend's dad in Southern California. And I did that for about three years, and really enjoyed working with the older adults and the staff, learning all the aspects of the business. And as a backdrop sort of happening behind the scenes that I didn't really think much about at the time was my dad's mother, my grandmother, Jessie, she lived in a small care home in Westlake Village area of California. And she needed a lot of care. She had advanced dementia. And it was I just remember going there visiting her and, you know, didn't think much of it at that, at that point. Flash forward, I got married, moved to Denver, and decided after I finished school, I wanted to get back into the home healthcare scene. But after a couple years of doing that, I realized that so many of our homecare clients were moving on to care facilities assisted living, and I was brought back to my memories visiting my grandmother and that smaller care home. And that was the start.
Pam Pyms:Wow. All right. So well, you had an idea about home health. But did you have an idea about assisted living communities and whether to buy existing or to build and how many units you wanted? how did how did all that take shape.
David Lewis:So as we as I looked at the opportunity, and what I really liked about the homecare model was just that personalized one on one care. So as I looked at all the different options for senior housing, I really was drawn to the smaller care home model, call it you know, eight to 20 beds. And our first one we did was a house, we renovated. And we felt like we did a lot of market research. And we're bringing something new to the market and the other. You know, there was an out there, at least in Denver, as far as care homes, you know, nicer homes, more bat, private bathrooms, things like that. And it evolved. After the first two, we decided we need to start building these things. And we start with our smaller home model. But we said we really want to build these from the ground up purpose built so that every bedroom has their own private bathroom, the layout is better, the hallways are wider. There's it just has a better flow and feel and it's better for the staff and the residents. And we really just sort of adapted as time went on.
Pam Pyms:I can attest to how beautiful they are. From my days in the business with you. You also keep saying we So did you have a partner in this?
David Lewis:Yes, I had a partner, I saw a partner that helps on the real estate side with he's a developer, family member. And we've been doing this from the beginning. And it's worked well. He's not really into the operations. That's more of my, my, my bailiwick. But he's super helpful and helping us acquire sites and the construction phase of it and the financing.
Pam Pyms:Do you have to have a special permit because I know you're you're pretty much in residential neighborhoods as you drive by one might not even realize that this is a home with eight to maybe even 20 units. So how do you get around that in a nice residential neighborhood?
David Lewis:Yeah, so our first couple of projects that we did were like a 10, or a 12. Bed home, call it four to 5000 square feet on one level, exactly in a residential neighborhood where we just got lucky and found these lots and this is back like 2008 2009 dozen 10. So there was a lot more opportunities because the housing recession, but then we decided want to do a bigger deal like a 16 bed. And so that first 16 bed we did was like the perfect had a little bit of drive by traffic, but it like, tucked up against residential neighborhoods. So we got lucky, we found something that had already been zoned correctly for this medical assisted living use. So we didn't have to do a rezone. And then from there, it was a fairly straightforward process to get approvals to get a building permit, call it three to six months.
Pam Pyms:Very good. And I imagine the more you do, and the better your track record, the easier it may be to acquire going down the line.
David Lewis:Yes, absolutely. Just like with any business, you tend to figure out what works and what doesn't, and you kind of narrow down your, your pipeline and your process. And you're like, no, that's not gonna work. And it's got to be this size land, and it's got to have this type of neighborhood and still take into account competitors nearby and market supply and market demand and staffing, being able to access the location, all those things.
Pam Pyms:Is it hard to finance? How do you finance them.
David Lewis:So we currently finance it with local banks, we either put in our own money or we raise money, typically, the banks want to see, you know, 25% of the total cost and cash equity. So either us investors are on money, depending on the deal. And the banks will give us, you know, 10 year 20 year type money, fixed rate. So we've been fortunate to develop those relationships over time as well.
Pam Pyms:Wonderful. Well, how many homes do you have now? And what are your total number of units.
David Lewis:So we currently have 10 locations, I'm sorry, we have 11 locations. And we have 14 buildings, we have a few locations where we have two buildings on a site. And that is where we really see our path going forward, is we really like doing the 32 beds and the 24 beds where we'll have 116 bed next door to another 16 bed or a 12 and a 12. And one will be assisted living and one will be memory care. I really liked that model for staffing efficiency. And we feel that the families who are touring us really love the idea of knowing that if they needed more care or memory care, it was right next door. Mm hmm. And so that's been that's been a hit for us, actually.
Pam Pyms:I'll bet. Do you plan to build more?
David Lewis:Yeah, so currently, we just are wrapping up our latest project in Lakewood. It's a 24. bed. We'll be opening up the first building here next week.
Pam Pyms:Congratulations.
David Lewis:We're excited about that. Yeah, thank you. And then we, and that was something that we bought pre pandemic. And we're kind of unsure if this was gonna how this is gonna shake out. But we're, we're locked in now. So there's no turning back. So we're, we think it'll do well and may take a longer lease up. But we're prepared for that. We have one more deal that we are working on that will break ground on in the summer. It's a 32 bed. It's more Northwest, Mr. Jordan area. And we have a couple different floor plans we've done with 32 beds. So we're most excited about this, because we feel like we have really polished this floor plan and we think it will be the best of all of our projects.
Pam Pyms:Well, I know you're only getting better and better. Do you? Do you have sort of a long term strategy? Do you plan to hold them or sell them? Or do you want to even talk about that right now?
David Lewis:Yeah, so we we definitely are always talking my partner I about where the markets going and what we want to do. And we always tend to come back to we want to keep these and run these as long as we can imagine there will be an exit at some point, but currently, with demographics and how things are going and how we feel our model is evolving. This is something we want to stay in for a while. I don't know the answer to your question.
Pam Pyms:Yeah, no, it does, because you're a wonderful management company, as well as an owner. And and we need you Dave. So talk about talk about your management style and, and what makes for a well run community.
David Lewis:So that is something also that has been bumpy, obviously with COVID. But we're just we're trying to keep it So as we've grown, it has so many properties. We still wanted Keep that small feel, and truly that home like feel, and that is what we've been selling day one. So we're really focusing on our customer service trying to help our families feel comfortable with us, our staff, we recognize they're making a huge leap of faith placing their level and during COVID. But even before COVID to, and so earning that trust, and being available for them, and to answer their questions and their fears and their concerns, and just being very transparent. So as far as management goes, I really feel that we just keep focused on the resident residents first, and our staff as well. Just getting them aligned in the same in the same goal, our staff have to be happy for residents to be happy. And as far as real estate and management, sometimes I know with senior living companies, those are can get fractured relationships. But for us being owner operators, we're all in the same boat. And if the operating company makes money, the real estate company makes money. And it's not one or the other.
Pam Pyms:So what do you look for in staff?
David Lewis:For our staff, we feel like this is where I probably spend most of my time is developing my staff, we're trying to find the right staff. And they've you know, they've had to deal with the challenging last year with all the new things that had to do with COVID. But so many of them are just caregivers at heart, they care for a family member at home, or they grew up caring for a family member. And they're just true and true. That in the world, they are caregivers. And so that's what I'm looking for people that are just really want to do what's right at the end of the day for these residents, and they create a connection with them a bond, I was told about this one story last week where one of our staff really connected with one of the residents, that they have this little thing they do at night where she kind of does this tapping routine on her door. And that indicates that she's ready to be put to bed. And the staff really looks forward to that just little thing they have between us. You know, it's those kind of little moments that are what we're all about
Pam Pyms:salutely Sure, yeah. Oh, that's, that's great to hear. We're your community's hard hit by COVID.
David Lewis:We had three communities have outbreaks. And one of them I think was like false testing because nothing happened. But two of them, we have people get sick. And it was challenging. But we have since recovered. In Colorado, there was like three waves early on, and then summer and then in the late fall like November, because that's winter. And we didn't have any outbreaks until right around Thanksgiving. So we felt lucky that we didn't have to deal with any of that until late in the game and that we were more prepared. But then experienced it for the first time was brutal. And to be totally honest, and you can't really prepare for that.
Pam Pyms:I was going to say Where's your Where's your staff hit as well as the residents in terms of who got sick?
David Lewis:in those locations? Yes, yeah. So we we try to keep our staff and just those locations, in case there is an outbreak. I feel like we've been very lucky with our staff not getting it from home or wherever they were. And that's why we did get it in the communities. So that was huge. My team has been amazing and just educating and being available and just going the extra mile, like so many people have in this last year, dealing with all the extras that have come up because of this. So our staff, yeah, they've done they've done well, and we haven't had a lot of staff get sick, thankfully, they've been careful. And we have we just feel grateful that we're only a couple of our homes have hit we've know other communities have not fared as well and my heart goes out to them.
Pam Pyms:Yeah, especially in the beginning. I know. And and I know that in the larger communities in particular, some of the caregivers bounced around, you know, from home to home or nursing home to assisted living. And I guess one of the perks of being in a smaller home such as yours is you probably have staff stay within the home. They're in is that correct? And what's the ratio of staff to your residents?
David Lewis:Yes, so we we definitely have like our full time staff, they're just at the one location. It's harder with the part time staff they're going to sometimes work in other spots. So at the beginning of COVID, we made a list of everyone that has second jobs, right, and just wanted to know what's our true exposure level? And just and then really spend some time with those staff educating them. We couldn't make them not have second jobs, but we tried to either get them more hours with us, or maybe if they got more hours with their other company, you know, just kind of be smart and work together, you know, do what's best for the residents. And so we, we had success with that.
Pam Pyms:Good, good. So how did you find your niche and figure out your message then to the consumers?
David Lewis:That's a great question, Pam. That's something that I think in the beginning, a lot of a lot of people struggle with, right. And you can have some bad days where maybe you have an upset customer, and you're like, wow, maybe I'm not doing this, right. But there's definitely more good than bad. And so I feel that we found our niche. When we, for me, it always comes back to I really loved homecare, whereas like one on one care. And that individuals able to anticipate that seniors needs like how they like their coffee, and you know what what their favorite clothes are and where they like to do you know how they like the paper setup, or just all these little things. And so, but homecare is very expensive, and people need the opportunity to go to a place where they can still have that individualized attention, but also be able to afford it long term. And also the benefits of a social setting. So with these smaller care homes, I feel like this is the best option for them. And so that is really our message is you will not get lost in the cracks, you will not get lost in the long hallway, because it doesn't exist here. So we'll have a 16 bed home, we'll have three staff on during the day, and in memory care will have four. So there's just a lot of staff available to get to know the residents. And that's what we're telling the staff to try to sell them on why a smaller setting working for us is better than a larger setting is you got into senior care now for the grade PE you got to think because you love these older adults. And so come work for us, we get to spend more time with them. build those relationships.
Pam Pyms:So the sweet spot then is really somewhere between 16 and 32 units. Yeah, it is. Okay. All right. Yeah, that sounds good. Is are your Are you know, are your rates say comparable to rates of the larger homes?
David Lewis:So that's good question, I think our rates are going to be a little lower, we have adopted the flat pricing rate system that is common, I think in larger Memory Care buildings. But I know most larger als will have like a low rent and then all the card services. And a lot of families and noodles like that. For us we feel that we don't do you know rate increases for kit levels of care. And so I think that's easier to determine. And they'll get those surprise phone calls when mom needs a little more attention and help getting from a room to the dining room. So I feel that we are maybe not taking as heavy of acuity residents as others. And so therefore our pricing, I think it's just a little bit lower, which families appreciate
Pam Pyms:it, especially compared to home health. Can you give me sort of a ballpark say, what home health would cost compared to what you provide and what that cost is?
David Lewis:Sure. So home health in Denver is right around, I'd say $30 an hour. So if you needed, you know, eight hours a day of care, you know,$250 or $40? You know, multiply that out by five to seven days a week. you're approaching skilled nursing pricing. Yeah. or above. So you know, assisted living four to 5000 a month it's gonna be you know, 150 to $180 a day.
Pam Pyms:Yeah, much, much bigger break there, I guess. Yeah. What would you say? When you say you sometimes have outside investors do you look for individual investors? Or do you go to more than one bank? How How do you structure the financing say someone wanted to invest with you?
David Lewis:So if someone wanted to invest with us, we would meet with them and explain what the expected you know, rate of returns would be most of our investors are all individuals, a lot of them are retired and they're looking for a consistent you know, income stream. The banks, as you know, are not paying very much on your savings account. Nor treasury bills. The stock market is has been you know, really good for a while but I think are older individuals that might be a little scary. So we're trying to get them anywhere from 10 to 15% cash on cash on their money. And I think what they love about it is they get a check every month. So I don't know other companies do it, but that's what we do. And so for them to know that some investors will put in an order from 50,000, all the way up to 500,000, depending on the deal, and they really like just knowing they get that check every month, pretty much.
Pam Pyms:Do you have a minimum amount for an investor to be able to participate with you? Typically 50,000 Yes, that's where they can buy chunks. Okay, that's cool. Thanks. Since we're doing a podcast for investors, perhaps you'll be getting some calls? Sure. Absolutely. Yeah. Tell me, you know, I, what have I not asked you that you might like to talk about or, or tell me a story, tell me the story of your biggest challenge and how you overcame it. And I know this is coming at you from left field. So
David Lewis:you know, just this past year has just been the biggest challenge of my career in my life. And I just wanted more than anything, Pam, that we didn't have COVID come in our homes. And it seemed talking to the health department and other operators like it was an inevitable Sure. And I just there was moments where I just struggled, as the leader of my team, I'm like, you know, am I going to just give in and say, Oh, you know, it's gonna happen, just brace for it, or am I going to take the path of look, we're gonna keep this out, we can do this, we have these smaller homes, we can keep it out, we have less people to worry about that are coming in out of our buildings, let's be smart. Let's make that our goal. And that's what we did. And we feel that we succeeded. Overall, considering what the odds were. We've had, there were days where we'd have four or five staff call in today and say I was exposed to COVID, I suppose code. schedule, you know, it was just really, really challenging and really had to make some tough decisions. But knowing it was way better than allowing people to come into work, that potentially could bring in the virus. just sticking with our guns, like we're not running in like a lot of our managers had to work before. I had to work a lot of weekends, myself, supporting them, you know, buying PBE and groceries, and we couldn't find groceries in the beginning is very, very stressful times.
Pam Pyms:That toilet paper was something else, wasn't it?
David Lewis:That was something else. And yeah, so it was, I'd say that was and then just be able to, like, still have moments of just gratitude for when you have these special moments with your residents and your staff. And I just saw just so much humanity with my team so much love and everyone's stepped up. It's just been. It's just sort of that like yin yang of like, it was really hard. But we saw just so many amazing things happen.
Pam Pyms:Yeah, that's that's wonderful to hear. Where were your communities able to let your residents see their loved ones? Or did you have to stop that too?
David Lewis:Yeah, so we followed to the best we could cdph she's there Colorado departments guidance on visitation. And we were doing outdoor visits. We purchased a lot of tablets, for FaceTime, chats, window visits, we did as much as we possibly could to give them contact to give them peace of mind. The patio is is worth the best. The tablets are challenging. Our niche and resident population is a little older in the spectrum and not so communicating through a tablet because of either hearing issues or eyesight issues can be challenging for them.
Pam Pyms:Sure. Are you? Are the vaccinations available for your residents yet?
David Lewis:Yes. So we have already finished our first round and we're starting our second round. We'll be doing their second round shots here in the next week. So it's going really well.
Pam Pyms:Good and everyone's not had any sort of terrible reaction or anything like that. No. Is it going well,
David Lewis:it's going well, I got my second shot on Friday and I was a little sluggish on Saturday, but I feel like I did find some staff have gotten sick. But the residents have all been done really well.
Pam Pyms:Great, great advantage to being older. I heard that it hits the older population. And not as hard in terms of reactions. Yeah, I don't know if that's true, I'd like to think so. So Dave, what was one of the biggest struggles you've encountered?
David Lewis:So in the past year, one of the biggest challenges we have seen is well, let me just give you a little background of our 10 locations, I'd say six of them offer memory care, and the rest are assisted livings were a little more assisted living and memory care currently. And during COVID, we noticed that we were getting just a lot more inquiries for memory care. And a lot of them started out as an assisted living inquiry. But once we got into the information and how the loved one was really doing, we realized they needed memory care. And part of that was because family members are like, like, I can't, I can't handle this anymore with this dementia level of dementia at home, and homecare is just not going to cut it. And other people were just in denial as well. So the demand for memory care was really high, also triggered by people trying to keep their parents at home and no one wants, they placed them in a care setting, be harder to visit them, because of COVID and the restrictions. So it's sort of a perfect storm. So one of our locations, that only did really well. Really good visibility, beautiful building. Like it just struggled all of 2020. And it wasn't for lack of inquiries, it was for the right kind of inquiries, because everyone calling was memory cares, we debated actually flipping it from assisted living memory care, which we ended up not doing. Because we were banking on this thing sort of, you know, slowing down and sort of winding down COVID. But that was a huge challenge where everyone that was the majority of the calls that were getting needed a secured setting, and we just didn't have all the memory cares, we had were full with weightless. Wow. So that that was sort of an interesting, you know, dynamic to COVID is, but you know, it makes sense on many ways, right? Sure, if just, they can't handle that level of care at home, and a lot of them waited too long. So then when they decided to move them and like you kind of missed your window, because if you move them in at the right time, you can keep them in assisted living for a little while before they need memory care. And then another thing that I think really helped us was because some of our buildings thrived during last year and other ones did not, was just grateful on the balance sheet perspective that we had buildings and all these different little sub markets of Denver, we weren't just concentrated in this one area, because we've had thoughts of, hey, let's build a 60 bed or 100 bed. And I'm grateful we haven't, and that the biggest we have, and one little location is 32. So that we just have a little more diversity. And if one locations, maybe not doing so well, the other ones are. And that really helps us from a financial perspective.
Pam Pyms:Yeah, like rental properties, you know, just offsetting that, which you know, and everything has an up and down. So that's, that's really good. You're able to do that. And thank you for sharing that with me. Absolutely. All right. Well, we have time for maybe one more question. And I'm going to ask you, if you if you can flip through your memory to say, a highlight of your career. Can you think of one offhand? Um, there's been a lot. I bet.
David Lewis:I think, I think the highlight is when you have a moment, and you're able to stop and look back and say, Wow, I can't believe it's been 10 years or 12 years. And we've built, you know, all these beds, we have 100 176 beds and the plus the 24 coming online look 200 beds. And we've we've built all these communities and implemented all these new policies and hired all these people. I mean, to look back at that and say, well, we we did that together as a team, and overcame a lot of challenges and a lot of failures. I would say those, that would be the highlight is to look back and see what we've done. And I'm always reminded of those moments when we have a family member that lets us know, they're so grateful they found us. And we were able to take care of their mom or their dad until they passed away and they stay with us till the end. And to me that is like the ultimate gift is to be like yeah, you can move in and we'll be here with you as your last show. Last stop. Yeah, and we're gonna make it a good one.
Pam Pyms:Well, I'm glad that's what you chose, because it does bring me back to the very first time I met you. And I know that was over 10 years ago, 1214 years ago, and we met in a Starbucks and I remember you I was out Already in the business and you were in home health, and you said, you know, I've got this idea about building these smaller homes. What do you think? And I thought, wow, that's an interesting idea. Yeah, I hope I told you do it if I had a clue but but I'm really glad you did Dave and and that you have done as well as you've done. And I thank you so much for your time today. And I hope we get to know to do another podcast again soon. And I'm also just want to congratulate you on how you've handled COVID and, and the closeness that your staff has because of it and your leadership. No doubt.
David Lewis:You're very kind. Thank you. Thanks for having on the show. It's been a pleasure and I hope that we can talk again soon.
Pam Pyms:Okay, me to talk soon. Bye. Thanks for joining us today at the senior housing investors podcast. Brought to you by haven senior investments. Please find them on the web at haven senior investments.com