Pilar Carvajal, CEO and Founder of Innovation Senior Living, discusses the need for a different model outside of the high cost models typically associated with private pay Assisted Living communities. How can the industry bring quality and community to the middle market, by far the largest population of seniors not being served? She has some insightful answers!
Pilar Carvajal, CEO and Founder of Innovation Senior Living, discusses the need for a different model outside of the high cost models typically associated with private pay Assisted Living communities. How can the industry bring quality and community to the middle market, by far the largest population of seniors not being served? She has some insightful answers!
Welcome to the senior housing investors 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. Hi, Pam.
Pam Pyms:Hi, john. Thanks very much. It's great to be here. today. I'm with Pilar Carvajal, who is the CEO and founder of innovation senior living. Hi, peeler. Hi, Pam, how are you? I'm good. How are you? I'm Fantastic. Thank you so much. Well, I'm delighted to have you on the show today and can't wait to talk to you about all kinds of things. I'll start off with the usual so the listeners know who you are. And that question will be just to tell me about yourself and your company.
Pilar Carvajal:Sure. So I am a Cuban American. My parents left Cuba when Fidel Castro took over power, and they came to this country. And, and we were raised here for a short period of time. And then, I guess, fortunately, we moved to Sydney, Australia, and Sydney, Australia was a really wonderful place to be a child. And it gave me a beautiful perspective on life. Because in Australia, there's a very high quality of life. There's great programs for education, and health care, and work life balance is very important there. And so those types of things that I learned in Australia, I think, have been very pivotal in my life, in terms of how I approach life, and the things that I do, and don't do so, at the end of day, it's a country that cares deeply for its citizens. And I think that that really became a big part of who I am today. Now, we moved to Miami from Sydney, Australia. Because my parents are Cuban, they wanted to come back to the town where a lot of Cubans live and, and it was quite a provincial town at that point. And I was here for a little bit. And then I decided to apply to Smith College up in Northampton, Massachusetts, and went to college, there was also another very pivotal point in my life going to a school that was there just to teach women and empower them. And I grew up with a very strong role model in my mother, and going kind of from that to a college that that really focused on women and educating women and empowering them to go out into the world to do great things. It really helps me kind of project me into what I do today. Oh, it's a great college. Yep, it is. It absolutely is. Now, not to say it wasn't a big change for me. I mean, New England and Miami are quite different. And I was extremely cold out there. You know, living in Australia, in Sydney. It's very temperate weather, just like Miami, and going to North Hampton, Massachusetts for those four years was, was brutal, I bet but I learned by the last year I was wearing my wool sweaters versus my cotton sweaters. And I was wearing socks and and I learned how to deal with a gold. And, and from there, I moved back to Miami and I became a pharmaceutical rep and I did extremely well. And I decided that I really wanted to go and educate myself in London. And so I went to the London School of Economics. And from there I got a master's in economics and I went to New York City and I was a management consultant doing mergers and acquisitions up through September 11. And September 11 really rocked me to my core and I decided I wanted to move out of New York and come back to Miami. And I joined forces with my mother in a family business and and we were doing something very innovative and novel at the time. We didn't know it but we were licensing very large public housing and subsidized housing buildings across the country, into assisted living facilities. And so we were trailblazers in the sense that we were really doing true aging in place by bringing a license to where people lived and allowing them to age where they lived and had made their home. Wonderful. And so I I ended up doing I was in the family business for about 15 years. My last projects with the family business were Affordable Housing licensed as assisted living. So they were extremely complex projects that incorporated not just regulations on the assisted living side, but also Medicaid regulations. And then something new to me was tax regulation. Because these projects are low income housing tax credits, are credit projects. And so they utilize taxes and the IRS and then all the regulations that come with that. It's a good thing.
Pam Pyms:You had a background in economics, that's all I gotta say.
Pilar Carvajal:Yes, and they were wonderful projects, they were highly successful. We leased them up very, very quickly. But I realized at that point that I wanted to do something, something different I, I had learned a lot in the family business. And what I didn't know at that point was that I was serving a population that my industry didn't really serve in large part. And it wasn't until I decided to leave the family business as a result of being accepted into a Goldman Sachs 10,000 Small Business program that helped me kind of pivot out of the family business into my own business. It was at that point, when I visited the the 2016 nit conference that I was like, wow, I am quite an anomaly in this industry, I have done. I've done projects that that are not the norm, but very much needed. And what was really interesting about my experience was, I saw in every one of the projects that we put together, a middle income senior coming to our doors, they really liked what we had to offer, the bells and whistles weren't necessarily important to them, but they love the services, they love the fact that we created a home for them. And and it kind of got my brain ticking here that this was a population that was going to be the next one that I really wanted to tackle. And so shortly after, I guess separating myself from the family business and going out on my own. The Nick did a study on the Forgotten middle. And I said, you know what I could have told you about this because I saw it in real life out in the field. Sure, you could have written it, I could have written it exactly. And, and so that, that was kind of my direction. And, and that's what we're doing right now. And the reason why I called innovation, senior living, innovation, Senior Living is that I really wanted to continue to think innovatively, I had been taught that way in the family business, I didn't realize that at the time. But I was constantly having to be creative about how we served people or where we serve them. I remember we converted a trailer park into an assisted living. For me, we just jumped in and did it. I didn't think wow, this is innovative. And I have to think differently. And we've got to try this and that and see what works and what doesn't work. And that has has been kind of at the at the core of everything that I do, it's to think out of the box to see how you can serve people more, you know, not to see it as a barrier, but rather as an opportunity. And so that's really the reason for for the company being called innovation, senior living, and specifically innovation, the fact that we're going to be serving a population that the industry in large part has neglected to serve.
Pam Pyms:This is so true. And it does my heart good to hear this because when you think of the you know, the lower or, or even the middle income, and you think of a Medicare building, only or Medicaid, you know, you get these visions in your mind of something that's scary. And talking to you, I really get the feeling that when you walk into one of your senior living communities, you're going to see something that's not frightening, so, so tell me what what do you see that we don't see in the other communities?
Pilar Carvajal:I think every single project that we did in the family business was a conversion of home. So it was a place where people already lived. So they were apartments there were, you know, areas where where people would come together just had always come together and we just made them better places to come together. We created programming that would bring them the sorts of things that they wanted to do that they couldn't necessarily coordinate alone, but with a program in place could you know put that together for them. What
Pam Pyms:excuse me for interrupting you What's the whole building converted or just the people who wanted to be a part of assisted living in their building?
Pilar Carvajal:So what we typically did is that we would licensed the whole building, but we would only bring those people that wanted to or needed the services into the license. And then we will report to the regulatory agent, agency, okay. 101 is now an assisted living unit. And then our staff would be deployed, and go serve those individuals when they needed it. Mm hmm. We were really all about when you need us, we're going to be here for you. And it's just, I think, a different type of perspective on on what you were talking about before, when you walked into to our, and when you walk into our senior living communities, they're vibrant places, they are not places where people go to die. There are places where people go to socialize, be together. I mean, I have a funny story about my aunt. She's actually my great, my she was my great aunt, and I had a property in Tampa. And she lived with my aunt for many, many years. And one day I said, You know what, why don't why don't we try putting a we will call her at the at the back? Why don't we put the data in in one of my properties and see how she, she, you know how she does. And amazingly, she moved in with us when she was 99 years old. Oh, she passed away at 107. And I had never seen her more happy in her life. Oh, she had a reason to get up every day, she would do her makeup, her hair, she come down to the community area, she made friends, she had a boyfriend, I mean, she created a life there that she did not have when she was cared for by my aunt. And it's not to say that my aunt was doing anything wrong. But there wasn't the socialization that is necessary for any human being to have. And to be able to socialize with people that are of interest to you. So we saw, you know, just using this as a as a case study, I mean, an amazing turning around an individual and a complete, she just thrived in these prop in this property that we had. And so we've seen over and over and over again, this type of turnaround for people and the properties that we that we manage that we own that we bring to market, we're here to serve you in your home, it's your home.
Pam Pyms:So I'm trying to wrap my arms around how this works. Sure, there's an apartment buildings owned by someone else. And you approach the owner of that building and say, let me bring in innovation senior living to your apartment building. Sure. Do the residents pay you? Or does the owner of the building pay you to manage? I mean, how does it work.
Pilar Carvajal:So if we take over a building that that is converted into assisted living, it's it's what typically a property management company does, we will come in, take over what you normally do the maintenance and so forth, we will then look to convert areas to allow us to bring in our programming. So typically, we need more office space, we need an area to for dining. Now, this is part of our business, what we're actually focused on today is acquiring properties that are assisted living facilities today and improving them. So we're out there looking for products that are maybe just not doing great. Or maybe it's a mom and pop operation that's been operated for a long time and they need some fresh, a fresh perspective. You know, we we want to take advantage of properties that are maybe 20 or 30 years old, renovate them, and bring them back out and add them to our portfolio that caters specifically to a middle income senior. Okay, so just like you would see a courtyard Marriott and know that that is very different to a Ritz Carlton. This is the idea we would be the courtyard Marriott on out there for this working class, middle class American.
Pam Pyms:Hmm, it's just a great idea to thank you, do you have a certain number of units? Or can it be any size,
Pilar Carvajal:we know we've tried all kinds of sizes, we own from 24 bed property all the way up through 125. So you can do these these types of projects in all sizes. Obviously, you get better economies of scale with larger properties and and I'm accustomed to the larger properties from my experience on the affordable side. So whenever you're doing anything affordable, it has you have to deal in large numbers because your revenues are not going to be you know as much as say Somebody else's property, so but your expenses could be very similar. So my properties I've done in the past have always been much larger, but these smaller properties are. They're more niche properties. So they cater to a specific clientele perhaps, or they have a specific specialization. So we've had some success, actually, as a result of COVID. Our smaller properties have done extremely well, because families are looking for a safer environment and the they think that the smaller properties are safer. So we've had, you know, full, a full 24 bed property, for example, and then had, you know, some depressed occupancies and our larger properties. And it's just, I guess, a perspective out there. And, and what I think we have learned from, you know, owning and operating all different sizes of properties is there's all kinds of clients out there. And residents want a small property or a large property or you know it. So I think with having different sizes in your portfolio, you're able to cater to a different type of resident population, right? And obviously, right now, we're we're trying on lots of different things. Or at least the last couple years, we've been trying on lots of different things. And what we really come to realize is, in terms of affordability, it's really going to have to be more i l al. And the memory care is going to be something that we we probably can't do in large scale, right, because those operations are just so much more costly to operate.
Pam Pyms:Right. Right. Very interesting. And your background just lends itself to knowing these things, which is great. And as you say, to diversify your portfolio, especially something like COVID hits, yes, you know, then you're, you're protected. And tell me, where do you see yourself in five years from now.
Pilar Carvajal:So in five years, we want to have a portfolio of 10 properties at least. And these would be rebranded properties that, that serve this population that we were just discussing before, you know, this working class, middle class resident. And this would be through acquisitions. So we'd be looking to potentially take advantage of some of the distress is going to be seen very soon now with COVID. Taking on these mom and pop operations, and putting them together and pivoting them to serve this population. So we are already looking at quite a bit of pipeline right now. We're actively looking for equity, and debt partners, to help us put this together. But it's very exciting. It's as an entrepreneur, it's always exciting to build things and to put things together. And so we're right in the middle of, you know, rolling up the sleeves and, and making the capture.
Pam Pyms:Do you want to stay primarily the state of Florida? I'm not sure if I mentioned you're based in Miami Beach?
Pilar Carvajal:Sure, yes. I always say Don't cry for me, I live in Miami Beach. But Miami, Miami Beach has been my home since we moved to Miami. So I've been here for a long time and seeing the city transform into something that's absolutely spectacular. I think that for now, we want to concentrate on Florida. And I think some of that decision has to do with the fact of my experience in the family business where wherever there was a need, we jumped in a plane and we took off, it was very mission oriented. So if Washington State had a property that needed to be converted, we jump in a plane and run over there, right? What I'm trying to do now is just build a portfolio and the building of the portfolio performs best when you're clustering and putting things together in a certain region. True. So right now we're going to focus on Florida, although Florida is is a tough state to operate in. But I'm not afraid of tough, you know, I've dealt with very, very complex projects, the more complex the more able I am to handle them. So we're gonna we're gonna focus on Florida and then absolutely move regionally once it makes sense. So be it, you know, a portfolio that we can acquire in a in a in a state nearby where we can build a team around it. What we're absolutely open to that. Well, I wish you all the luck in the world on that spam.
Pam Pyms:Tell me what you see as important future trends in the industry?
Pilar Carvajal:Well, I think our biggest competition right now is the home. And I think that what we need to do as an industry is really focus on what we've learned from COVID, which is we provide socialization, we provide an opportunity for people to come and be together. I can't imagine the suffering that has happened with residents that have been here. Home Alone during COVID. I mean, it's been absolutely catastrophic for them. And of course, in our properties, yes, we are congregate settings and COVID. If it takes hold, it's it's been, you know, it's been devastating. But we've learned a lot, we've learned how to deal with COVID. And now we're turning this corner with vaccinations, and all of that is going to change for us. But I think we have to focus on what we offer a resident, which is that socialist socialization piece, but also, that we, and my properties have always been more healthcare oriented than hospitality oriented, some more clinical than then that hospitality, as I was saying before, so within our settings, we're able to create healthcare partnerships. And this is something I've been very accustomed to doing on the affordable side, because what I'm always focused on is how do I control my costs. So on the affordable end, you're always looking to do your business as efficiently as possible at the lowest cost that you can. So in partnering with others, which has been the focus of that business, how do I get the most services in here without it necessarily being something that I'm paying for on my payroll? So we have regularly partnered with health care systems, with physicians with home health companies with therapy, it's been part of what we do, always. So I think that that's going to be something that's going to be a requisite for, for our industry, if you're not doing that now, is really becoming more healthcare oriented than hospitality oriented. So I think those are going to be some of the big trends. And some of the other big trends are going to be, you know, adopting technology. I mean, we've talked about telehealth, you know, that's now, you know, it's not even a, you know, a nice to have, it's, it's, you've got to have it, you know, you've got to provide these types of benefits that someone is going to find valuable in order to move you in, and even what we're doing and catering to the middle income, many, in my industry are always scratching their head saying, why is our penetration rates so low? Why do we get so few people to move into senior living? Think it's like 10%? And I say, Well, I know the answer to that question. We're only a 10%. Because we're not serving the largest population out there, the largest demographic, that demographic is actually I wouldn't say turned off by the industry, but maybe so they come, they see what we are offering right now. And it's completely out of reach for them. So they just turn back around, they go home. And they, they try to make it on their own at home. And so I think there's a lot of a lot of talk out there about people wanting to age at home. But I think some of that has been our fault as an industry that we really haven't created the right types of places where people want to move into an age with us versus age at home. So I think there has to be some Yeah, a real good look at that.
Pam Pyms:Right, right. So will you be able to accept Medicaid? Or will it be a private pay what what is the model look like?
Pilar Carvajal:So I am very accustomed with dealing with Medicaid and actually, some might shun Medicaid for whatever reason, but it is secure money. A private pay individual will eventually if they live long enough run out of their money. Medicaid, at least for right now doesn't run out. It is secure government money that gets paid to serve that individual. So it should be looked at as a beneficial revenue stream, then I think the industry has seen it be at least on the assisted living side. The nursing home side definitely sees Medicaid as a positive. And actually Medicaid is an entitlement program in nursing homes, which means that if you are low income and you end up in a nursing home, Medicaid will pay for you because it is an entitlement program in the nursing home setting. assisted living facilities, we actually have to fight to get that money for our resident population, those residents have to apply, and they have to d be deemed appropriate. And so it's a bit more of a struggle. But that is that's probably going to change in the future. I mean, this whole idea of community based you know, home based servicing, Medicaid can be positioned position to, to pay for services at home, assisted living is home. So that whole dynamic of it being mainly a program for nursing home I see there going to be a big shift, at least this administration is talking about that, that Medicaid be used more in the home setting in assisted livings at home, etc, etc. PLR I see a number of speaking engagements in your future. To educate, level of education that I see when when, when I listen to people, I'm like, they don't see the benefits of the program. And there are many,
Pam Pyms:yes, and we, and it's a definite need. Tell me about the biggest obstacle you faced and how you overcame it.
Pilar Carvajal:I think my biggest obstacle, I mean, I think there were there were two one was to leave a very comfortable family business, and strike out on my own. I think that there's a lot of people dealing with that same dilemma. And I think COVID might have provided an opportunity for someone to maybe start a business. And it's, it's scary, but I think fear or being scared really has to do more with losing comfort, than it is really a true fear. And so I think once you make that decision to, to jump into something, or like my case, leave a family business and do something that's scary. And I often say it's like jumping into a swamp, and you get in that swamp and you're swimming, and you're swimming, you don't see the end of the swamp. And then one day, you hit the end of the swamp and you pull yourself out and you look back and you go wow, that wasn't that hard. So I want what you know, it was one of my obstacles was definitely leaving the family business. But I would say on a business perspective, the biggest obstacle for me is being this little fish in that big Senior Living pond, you know, being this anomaly that knows the opportunity out there. But yet, I don't necessarily have you know, the, the parting of the sea to be able to go and do it.
Pam Pyms:Only for now Pilar, only for now. Oh, yeah, no, I have the feeling this will come into fruition for you. Well, especially, you know, you talk about jumping into something and in another conversation I had with you earlier, you did tell me that you've just acquired your business, right, your first one, your first 24 unit where you will be owning it.
Pilar Carvajal:Yeah, we did that in 2018. So we we did that in 2018. That's where we made a shift from being a third party management company into being an owner operator. And that whole experience really changed my my brain in a sense, and I saw the value of owning the property versus just operating it. And so this year, actually 2020, we decided as a company to really pivot and start focusing more on acquisitions than management opportunities. And then obviously, COVID hit and it kind of like we went sideways a little bit. But now we're back in the driving seat. And we've secured some, some, some very interested equity investors, some debt that wants to come and play with us in the sandbox, and develop this idea. So it's it's definitely the the direction that we're going to take now. We're going to obviously grow into having larger and larger parts of ownership right now. Yeah, sure. We own 100%, the 24 bed, assisted living, as we go and look to acquisitions will be a minority partner in these deals with the idea that one day, we'll be able to be the majority owner and flip that, flip that switch.
Pam Pyms:Oh, that's great. So you'll be able to prove it based on management and revenue and that sort of thing.
Pilar Carvajal:Yes. And eventually, I think we want to probably, you know, own it manage to own if we do get our any management contracts out there. But even with these investors, having a clear understanding that we would like to purchase these properties, and potentially we're looking at purchasing through a nonprofit. And that nonprofit will be the entity that owns these properties. Long term. Very,
Pam Pyms:very good idea. I mean, there's a whole podcast on that. So is there Well, I need to listen to that podcast. I know I'm talking about with you. How does that work? But you will save that one. Tell me how would you want to improve your own self in the next year?
Pilar Carvajal:Well, I think that a big part of my success has been to try things to take the risk To learn from things that I that I do, and I mean I, I'm very, I'm a very lucky girl, I've got a very supportive husband and I jump into things. And he goes, go ahead, and he jumps in that swamp, and I'll see you on the other end. And sure enough, he's at the end of the other end of that swamp. But I think it's, it's, I definitely want to continue, and to be a lifelong learner. So I just just took some leadership courses with Kellogg. So that's one of the things that I definitely want to improve on.
Pam Pyms:I know you've won a ton of awards, I don't have them in front of me, but I know you have and feel free to brag, here's your opportunity.
Pilar Carvajal:Yeah, I want a lot of awards. I mean, some of the awards are, I'm so thankful for them, but they they give me exposure, which is really at the heart of why they're good for me, I have to make some noise out there and get some attention, right, so that I can get done when I need to get done. And I you know, we all have a certain amount of time here, and I have a certain amount of time to get done what I want to get done. So I'm gonna make a lot of noise and gets attention so that we can we can get this this portfolio put together and, and do something different. A legacy, I guess, for for, for me and for my, for my kids to see and and hopefully be an inspiration for them when when they want to start their own businesses, perhaps in the future.
Pam Pyms:Well, there'll be no doubt about that. And I'm going to look forward to following along because I know you're going to be wildly successful. And other than marrying this wonderful husband of yours, what's one thing in your life that you're so happy you did?
Pilar Carvajal:I think I would go back to what I said before, I think it was the departure from the family business doing something that was extremely uncomfortable, and starting my own business. And I think that that's that has been such an incredible experience for me. So empowering, really has brought me full circle in terms of what I learned as a child from my from my role model mother and what I learned in college, and what my immigrant family taught me hard work would ultimately lead to so I think it's all come full circle for me. And now as I look to develop this portfolio, I'm very focused, I have taken everything that I've learned. And now I know exactly what I want to do. And I think that that is very, very powerful, and that I can make into something
Pam Pyms:well, from one woman entrepreneur to another, I'm very excited for you. And I understand exactly what you're talking about with, you know, the challenges of starting one's own business, and how difficult it is. And you know, my hat's off to you for all that you've already accomplished. And therefore, I have one more question for you. Sure. This may be the most important question of this podcast. So I want you to think about it. Okay. All right, this is it.
Pilar Carvajal:I'm ready. Cats or dogs? Oh, my goodness, that is such an easy question. Dogs, dogs, dogs, dogs, of course, I have two beautiful little rescue Chihuahuas at home. And the and I'm sure any dog lover will will definitely understand what I'm talking about it there was a very interesting documentary that I saw about how dogs are the only animals on this planet that will look at you in the eye and like connect with you. And there's a special connection that you have with dogs that I think that you don't have with any other animal. And, and the the love that they give you the unconditional love. It's a very, very special thing to have a dog in your life. So dogs 100%
Pam Pyms:you answered the question correctly. From my perspective and you're giving me You're giving me ideas of like puppies for residents, we could start a program.
Pilar Carvajal:I love that you know and pets are such an important part of people's lives. And I think in senior living we've done a great job of of taking pets away from people. Yeah, and we have to find a way to stop doing that and let pets be part of the equation just like I think you know mixing generations needs to be a part of the equation now we've separated populations for too long you know demographics for too long, you know the old are over there and the younger overhear, it's weird. It's very, very weird. It should we should all be together because we can all learn from one another. And I guess you know, one of one of the last things I want to say You know, I think important for me, too, is, as you were saying, being a woman entrepreneur out there, it's, it's important for, and I, especially for my daughter, you know, seeing mommy out there and, and finding a way and getting things done, I think it's really important that we as women support each other, and I'm involved with a lot of women's organizations to help us be successful. And I'm, I'm actually considering developing, I guess, a woman initiative, maybe getting a group of women together that are equity, investors that are debt investors that are interested in a different type of model of senior living that is going to serve an enormous population out there. Because we as women, were the ones finding places for our parents, for the most part, and this has nothing to I mean, sons, thank you, you're wonderful, and you're out there. But for the most part, it's, it's women that are looking for women. And I say this, I'm a woman's business and a woman in a woman's business. I'm a woman myself, I serve women for the most part, and I hire women for the most part. And so to come together with a group of all women to, to put something really special together would be would be truly amazing.
Pam Pyms:It's very exciting. It's ended. And it's been proven to what you say that it's the eldest daughter in the family that chooses where mom will go, or dad. That's right. We are the ones that take this on, and especially, you know, in this part of our lives, but I I've had a wonderful time having this podcast with you. And I look forward to talking with you more. And I'll keep an eye out for your success. Now, if people want to reach you, what is the best way?
Pilar Carvajal:So the best way I love email, so my email is my first initial P. And my last name, Carvajal. At islcommunities.com. And then my phone number is 305-428-2480. And if you didn't get the email, you can certainly contact me through my website, which is www dot ISlcommunities.com. And my email is under my profile.
Pam Pyms:Oh, well, and you have a great profile. I recommend that everyone go on and read. Thank you, Pam. Yeah, thank you, Pilar. Look, I look forward to talking to you again soon. Absolutely. Thank you. All right. Bye. 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 havenseniorinvestments.com