How Much Can I Make With Group Homes? Hint: Try $70 Million

How Much Can You Make With Your Group Home Empire? Here is one that just sold for $70,000,000  

Good Morning! I wanted to add some inspiration to get your TUESDAY started on the right track.

Many of you ask me, “Andy, How Much Is My Business Worth? Other ask, “How Much Can I make With Group Homes?”

The quick and short answer is however much someone is willing to pay. That said, just like we discussed interest rates the other day, I want you to understand that all businesses and real estate are priced based on how much income they will bring in over time. That is why the second part of the above question is so important. “How Much Can I make With Group Homes?” To reiterate…..it is all about the INCOME that the asset will produce over time

CAN I SELL MY GROUP HOME AND SERVICE BUSINESS FOR $70 MILLION?

Absolutely. That is why I included the data from PitchBook above. On the left side, you will see the Company Name – D&S Residential – and you will notice that it was acquired by Comvest for $70,000,000. Yes, This GROUP HOME OPERATING BUSINESS was sold for $70 MILLION.

Look, I am not telling you this is Warren Buffett or Carlos Slim money. Its a drop in the bucket for them. But for the average UBER WEALTHY person, this is a lot of SCRATCH.

D&S Residential started off just like many of you are starting off right now. With 1 home.

In fact, I actually personally know the first banker that financed them. A small little bank about 80 miles North of San Antonio TX and 25 miles southeast of Austin. Yes, the owner started with 1 Home.

WHY AM I TELLING YOU THIS STORY?

1. Group Homes Produce Income. Businesses are sold based on the income they will produce over time. How much can I make with Group Homes truly is the question. And the answer equates to the price

2. 98% of people start small. The owner of D&S started with 1 home!

3. The owner of D&S invested in himself and obtained knowledge. Just like compound interest, he added to his knowledge base each and every day by reading and studying. Whether it was a course like the GOLD COURSE, or going to industry conferences, he INVESTED IN HIMSELF everyday

4. You need to understand the potential and have a vision. As the Old Book says, “without vision, the people will perish”

5. Anything is possible! Look, D&S didn’t turn into a $70,000,000 company overnight. It took effort and focus.

6. HE STARTED! HE TOOK MASSIVE ACTION! The owner of D&S did not waste time. He knew the opportunity was HUGE and he wasted no time. He too asked himself the question, “How much can I make with group homes?” and he obviously found the answer 🙂

I encourage you to WASTE NO TIME……

If you want to get started in the GROUP HOME
 business, assisted living, care home, transitional home ICF MR Home or other…….

Get Started Now

THIS IS MY FREE, 10-PART COURSE.

Whether you do this by signing up for my free, 10-PART COURSE

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or get out today and rent or buy a property you MUST GET STARTED!

 

 

Group Homes Are Not Get Rich Quick. Group Homes Are Get Rich For Sure. But What About The Economy?

This Blog post will discuss the overall economy and the impact on Group Homes. Quick Tip: The Economy Doesn’t Matter when you own and operate Group Homes Like I Teach….However, If you own the real estate where your Group Home operates – interest rates and the economy may impact your overall wealth…..continue reading to learn why CASH FLOW is the name of the game in the Group Home Business

 

Where Are We in this 2018 business cycle? 

Honestly, I don’t know. Quite frankly, if you are running and operating group homes, it really does not matter. The care home, assisted living, sober home, retirement home and other group home type industries literally will not be affected by a downturn in the economy unless the USA turns into Venezuala.

Why?

Because the trend is your friend. Demographics are destiny in today’s assisted living and group home world. Whether you live in Atlanta, Dallas, Los Angeles, Nashville or Miami people are retiring, people are abusing substances and all these people need group homes and care homes where they can live CHEAPLY. Yes, $400 – $800 per month. They will continue paying whether or not the stock market falls. This is what I teach in my free, 10-part course

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how to start a group home
group home business cycle

BUT WHAT IF I OWN MY REAL ESTATE AND MY WEALTH IS STORED IN REAL ESTATE?

Ok, great question. Look, I am not running a hedge fund or a PE Fund. I am a main street guy off wall street that shows individuals LIKE YOU how to do what I have done. That said, here are my thoughts:

In the later part of the business cycle when the demand from businesses and consumers is picking up at a fast clip – basically faster than businesses have the ability to produce the goods and services wanted or needed prices begin to climb.

EXAMPLE: Housing in a supply constrained area like Northern Ca. Consumers (i.e. tech workers) are making lots of money and builders cannot produce more houses due to land scarcity, lack of labor, material shortages and of course Government Bureaucracy. 

During phases like this, the profits become tremendous for builders or others that are producing what the end consumer wants. At that point, the government and the Fed will often get involved to slow down the increase in prices. They do this by increasing interest rates. In fed parlance, this is referred to as Monetary Tightening. This is the opposite of what we say during QE 1, QE2, QE 3 etc. When this happens, the stock values go down as do the value of other assets like real estate and entire businesses.

Remember, ALL ASSETS ARE PRICED AS THE PRESENT VALUE OF THEIR FUTURE CASH FLOWS AND INTEREST RATES ARE USED AS THE DISCOUNT RATE TO COMPUTE THESE CURRENT VALUES. 

In the last few weeks, Mr. Market has been teaching those who listen how this works. The economy (from the stats we are provided from the GOVT.) is apparently pretty darn good. So the fed comes in and says, OK, time to lift rates or TIGHTEN. Notice how the stock market has gone down a bit….. Eventually this will cause a downtrend in prices and eventually demand will fall which leads to the next phase:

DEMAND WILL BE SIGNIFICANTLY BELOW THE ABILITY TO PRODUCE (THE OPPOSITE OF THE EXAMPLE GIVEN ABOVE RE: NORTHERN CA. REAL ESTATE) 

EXAMPLE: How much can you afford per month if interest rates are 3% VS. 6%?

A million dollar home (give or take) would cost you $3,000 per month VS. $6,000 per month.

THIS IS WHY DEMAND FALLS WHEN INTEREST RATES RISE

At this point, the cycle would start all over again and the Fed would begin reducing rates making assets more affordable again.

This is why it is smart to pick up assets when the economy is weak. In essence, there is excess capacity on the end of the asset owners (think businesses, developers etc). Basically, they have employees to feed and not much demand so they lower prices. THAT IS WHEN YOU WANT TO BUY!

WHY 2018 IS AN INTERESTING TIME

The above is a very simple illustration of how things work. The reality is a bit different for a number of reasons. Here are a few:

  1. Lower Taxes. You all just saw what happened with the tax bill. AT&T and other large companies are giving out bonuses. This is HUGE
  2. Monetary repatriation. Trillions of overseas capital could come back to the Unites States
  3. Interest Rates Are Already SUPER DAMN LOW! Central Banks cannot really lower rates at the moment due to how low they currently are

Obviously, if you hold your wealth in real estate, own a large group home business or other means of production now MAYBE a great time to sell. Especially if you are nearing retirement.

But my method for how to operate Group Homes, Care Homes and other Assisted Living type properties focuses on producing CASH FLOW. Each and every month, my goal is to produce MONSTER TIDAL WAVES of recurring income from these group homes. Do I own real estate? Yes, lots of it. But the cash flow that comes in from the group homes is what allows me to live and be free.

THE END SUMMARY:

Don’t worry too much about the overall economy and the value of your assets. Focus TODAY on getting your group home up and going or expanding your group home empire.

I teach people how to do this in my FREE, 10-Part Course. If you haven’t signed up, I urge you to do this today.

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CAP RATES FOR MULTI FAMILY REAL ESTATE AND GROUP HOMES

WHAT ARE REAL ESTATE CAP RATES AND HOW TO EASILY THUMB-NAIL A MULTI FAMILY CAP RATE CALCULATION

One of my students in Los Angeles reached out to me the other day. I have been coaching him since the recession back in 2008 or so. At that time, I pushed him HARD to get into the multi-family real estate game because the CAP RATES WERE (past tense) amazing. Fast FWD to 2018 – the cap rates suck. Will they go down further and may you be able to sell to the “Greater Fool”? YES! It very well may happen. I do not have a crystal ball. But what I DO, is play conservative and invest for YIELD. GROUP HOME CAP RATES are HUGE…..READ ON!

Although it is a bit more work than class A or class B; the yields (CAP RATES) and opportunities were very lucrative in the C and D grade space back then. He had the capital, the time and the energy to build up a strong portfolio – although he opted NOT to get into the Group Home game as he didn’t feel like he had the management experience at the time or the personnel resources available to act as house managers.

At the time, he was buying stuff for $60 – $80 per square foot in downtown LA. Heck, even back then the build-costs were upwards of $200. I figure his buy-in cash yield (cap rate) at the time was 9-11%…To give you an idea, nowadays, people are buying stuff in Inglewood and elsewhere out there in the mid 3%’s (although they are probably marketing them as 5%’s)

Today I want to give you a quick tip on how to easily compute a cap rate (or yield) on your total investment and then also give you an idea of what type of return you can generate if you set up a group home

 

 

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HOW TO EASILY THUMB-NAIL A CAP RATE (CAPITALIZATION RATE OR YIELD)

Step 1: Determine total annual revenues (tip: take monthly gross rents X 12)

Step 2: Divide by 2

Step 3: Take that number and divide by your all-in cost (purchase price + repairs + fees)

EXAMPLE:

Revenues are $100,000 per year. Divide by 2 = $50,000. Your all in costs are $1,000,000.
$50,000 / $1,000,000 = 5%

That is your return or CAP rate

Those types of returns are pretty typical in non-tier 1 markets (assuming tier 1 = San Fran, LA, NYC etc) for C grade properties. As you can imagine, it will take A LONG TIME to get your money back and get rich this way (unless you plan to fix and flip or add value in some capacity)

GROUP HOME RETURNS

I am a strong advocate of locating deals (10 CAP RATE or better) and then turning them into group homes. Once your group home is up and running, you should be able to increase your net yield on that property to 20% – 30% or better. In fact, most of the time, I don’t even bother calculating it.

As Warren Buffet says, “If you need a calculator to determine your return….chances are it is not a good deal!”

                                                                                    SUMMARY

When you operate group homes, you are operating a business. Most small businesses should enjoy 20-35% returns.– REMEMBER, these can be calculated using the cap rate formula I taught you above.  Often times even more. With Group Homes, you should be able to generate 1000% returns (not including the real estate) which should bring your net ROI / CAP RATE / YIELD of your group home and the real estate to anywhere between 20% – 40% depending on your location.

Stay Strong,

Andy

Bitcoin or GROUP HOME, CARE HOME AND SOBER HOME ENTREPRENEURSHIP

how do i sell my bitcoin?
How do i sell my bitcoin?

It is already January, 2018. Can you believe it? The entire population of the United States seems to be in a euphoric state with the stock market continuing to go up (recently over 25,000), the value of their “Cryptocurrency” and bitcoin going up and the value of their Dot.Com 2.0 VC backed companies going up….

But I have a question:

WHERE IS THE MONEY?

Maybe I come from a different school of thought, but seriously, when was the last time you went out to dinner on your home equity? What about making your mortgage payment with the value of your new Bitcoin? Just imagine…

Banker: “Mr. Jones, You are past due on your loan. We are set to foreclose next month”

Bitcoin, Altcoin or Home Equity Millionaire: “Mr. Banker, don’t worry about that, my bitcoin has gone up from $8,000 to $14,000 and the value of my home has gone up from $200,000 to $275,000”

Banker: “I am glad you feel wealthy. Pay your mortgage payment or we will foreclose the first Tuesday of next month.”

Bitcoin, Altcoin or Home Equity Millionaire: “Don’t worry, I will just sell some Ripple, convert it to bitcoin and then convert it to cash to make my mortgage payment”

Obviously I am joking around here (although this story is not that far off from many peoples’ reality) but let’s step back and think about this for a second. People have completely forgotten about the importance of making money and making a profit. It seems like they are only concerned with the price of their home or bitcoin! Remember, when the value of your home goes up, so do taxes! And unless you plan on selling, you need CASH to live.

What about your Bitcoin or other alt-coins? Well, what happens when you attempt to login to Coinbase or Binance and they tell you that “Due to high traffic, we are currently shut down” 

WHY A NICHE PLAY IN THE SOBER HOME, CARE HOME, OR GROUP HOME REAL ESTATE MARKET MAKES SENSE

Two words: CASH FLOW

1 small, 4 bedroom group home with 8 beds  – Whether it is in Detroit, Akron Ohio, Tampa FL or Houston TX will generate a bare minimum $4,000 per month. How much money do you need in the stock market (or in a bank) to make $4,000 per month? I would argue close to $1,000,000.

This is the value of owning your own GROUP HOME business. 1 small home, $4,000 per month in top line income. Each and every month the home spits off rents that are 4-6X what a normal rental would be. And the demand for this type of housing continues increasing EACH AND EVERY DAY as the divergence between the haves and have nots continues increasing.

Do bitcoin, other cryptocurrencies and stock bubbles have a place in people’s retirement? Sure they do. But I woud venture to say that there are more paper-millionaires out there today that are having trouble paying their bills than in anytime in a long while. Why? Because people have forgotten the fundamentals. CASH-FLOW is like oxygen. You need it to live.

I am a huge advocate of GROUP HOMES.  I show people how to set them up then teach the steps to automate the entire business. Is it easy at first? No. But it is after you have your team in place. In fact, I would venture to say it is easier (and far more reliable) than any stock market investment or bitcoin investment.

Here is my thought. If you want to invest in bitcoin or the stock market – first become self-sufficient without having to work 40+ hours per week. If you need $5,000 per month to live, then 2-3 Group Homes will do the trick for you. In fact, just three little group homes can change most peoples lives. And if you want to use the leftover money to buy bitcoin – go for it! I show people how to do this when they sign up for my free, 10-part course. My business model has been tried and tested for nearly 20 years. I have been through the recessions and the expansions. It is a no-nonsense, Warren Buffett method for accumulating wealth and setting yourself free.

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Thoughts? Comments? Disagreements? Let me know how you feel!

2018 – What is your Group Home Game Plan

This Group Home Room = Your Retirement

Group Home Room
Group Home Room

(THIS ONE ROOM in our Group Home = Over $1,500 in NET MONTHLY INCOME)

Hi ,

I’m putting up this Group Home Blog Post this Saturday afternoon with 1 tip and 1 inspirational story.

Group Home TIP #1

Group Home Automation. When you get your first group home up and going, furnished and making money your next step is to AUTOMATE. One of the easiest ways of automating is setting up your website and marketing systems to produce inbound leads for you while you sleep.

  • You can do this by coming up with a group home marketing flyer and 10-15 pre-scripted emails that go out to the nurses, case workers, social workers and doctors in you area one to two times per month.
  • You can set this up on auto-pilot using any old email system. Total cost Free – $99/month depending on how advanced you want it to be.
  • We actually include group home campaigns like this targeted toward disabled vets and other similar areas that you can use to build up your client base. All of this is included in my GOLD COURSE and you can literally just copy, past and change your company name and contact #. The calls will start rolling in in order to get your group home occupancy full and generating income ASAP.

Group Home TIP#2.

I have been absolutely slammed the last 6-9 months working on new projects – all primarily recent real estate acquisitions (in order to add more Group Homes to the portfolio) The past few weeks, my family and I decided to head out of town for a small break (quicker flight than Hawaii)- and so I am here right now writing this from my phone. The trip will cost a small fortune – but let me tell you a great inspirational story. Just last night one of my Group Home Managers told me he had received a call from a case worker needing to house a special needs client. We signed the guy up on a $3,500 three month contract. My margins on just that one client will probably be close to 90% because we will not be paying for food, and the social services agency is covering his gas, water and electric. Not bad! I just paid for half my trip with just one client without doing much if any work at all.

This is the power of the GROUP HOME AND HALFWAY HOME business. There are literally millions of people that need a place to live. I show people, step by step in my GOLD COURSE exactly how to do this and automate it so that you too can travel the world while others pay You!

Thoughts?

Questions?

Dont believe me?? Or dont think you can do it?? Think again! You CAN DO IT!

Send me an email and lets talk!

 

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L(Earn) Today!

Remember the big fight between Mayweather and McGregor? As we all expected Mayweather is the winner. The weird thing was the reaction of the audience. We all know Mayweather’s crazy lifestyle, but why people bother so much?

Yes, Mayweather likes to exaggerate and brag about his money. But he came from nothing and managed to make 300 million for one night. It’s his right how he’s going to spend his millions.

People usually think that millionaires are cocky and insensitive. What they don’t realize is what millionaires have been through to get where are they now. Mayweather had a drug addict mother, drug dealer father who was in prison at some point and lived in the worst neighborhood. He could have taken drugs, get in a gang, but he became undefeated with millions on his account.

He stayed determined and pursued his dreams. That’s where most people fail. So, we all could learn a lesson from Mayweather.

McGregor, on the other hand, was bold enough to switch from MMA to boxing and accept to fight with The Undefeated. This made him 30 million which is more than everything he has earned so far.

If you are bold enough to make decisions that others wouldn’t, you’ll live the life they couldn’t. The same applies to business. The entrepreneurs who react fast and are ready to adapt get the most of the money.

I opened my first group home without anyone’s help and with only basic knowledge. I had to go through trial and error, but nothing could get in my way. I was one of the first in the area to open a group home. I risked, but it was worth it.

You don’t have to risk as much as I did. I have the Gold Course to guide you through the process of opening and running a group home. You just have to make a decision and stay determined.

I went through the hard way and made it happen. You are in a way better position.

Diversify or Die

There is this amazing book “Diversify or Die” by Eric Guthrie that inspired me to write this post.

The dynamics of the nowadays market requires everybody to diversify. Diversification is not only for entrepreneurs or companies but for people who work full-time jobs also.

Continue reading “Diversify or Die”

I’ll Teach You How To Make Money And Have Fun!

I just came back from my 3rd vacation this year. In 5 months I was on 3 ten-day vacations. I know for sure that most of you wish to have more time to do fun things in your life. So, I’ll teach you how to have fun while making money.

I didn’t realize how good life can be until I left corporate America. I can have fun and make money at the same time now!

Continue reading “I’ll Teach You How To Make Money And Have Fun!”

Treat Yourself!

  • Former tech CEO and a passionate car collector Antoine Dominic are one of the three people in the world who drives a Lamborghini Veneno. This is the most expensive car on the road as of 2014. He spent $4 million without even seeing it ahead of time. Don’t forget that this is not the only luxury car in his garage.
  • Socialite Theresa Roemer owns a three-story, 3,000-square foot closet. The luxury closet is designed after the department store Neiman Marcus. Could you imagine how many clothes and accessories she has?
  • The co-founder of Broadcast.com, Marc Cuban has a $40 million private jet and once spent $90 000 on a bottle of champagne.

Continue reading “Treat Yourself!”

Why is Jessica Perkins Starting a Group Home for Troubled Teens?

Some of our previous posts talk about the importance of having a huge “WHY” in your plan. Jessica Perkins, a resident of Anchorage, AK is about to open a group home for troubled teens. So here is what you need to know about Jessica:

Continue reading “Why is Jessica Perkins Starting a Group Home for Troubled Teens?”