E193: Anthony Lawson on Real Estate Entrepreneurship Through Assisted Living and Group Homes - Watch Here
About the Guest(s):
Anthony Lawson is a real estate investor and entrepreneur specializing in buying and operating real estate-related businesses. He started his journey in the real estate world by purchasing his first property and turning it into a veteran housing facility. From there, he expanded into sober living homes and group homes for individuals with disabilities. Anthony is the founder of Global Investment Capital Group and has successfully raised capital for his debt fund, which focuses on acquiring and operating group homes and assisted living facilities.
Episode Summary:
In this episode, Ronald Skelton interviews Anthony Lawson about his experience in buying and operating real estate-related businesses, specifically in the field of assisted living and group homes. Anthony shares how he got started in the industry and the impact he wanted to make by providing housing for veterans and individuals in need. He explains the process of acquiring and transforming properties into assisted living facilities, as well as the various types of group homes and the potential for high cash flow. Anthony also discusses his unique approach to raising capital through a debt fund, which allows investors to receive fixed returns and provides flexibility for scaling the business.
Key Takeaways:
- Anthony Lawson started his real estate journey by purchasing his first property and turning it into a veteran housing facility, which inspired him to create a business model that is impactful and cash-flowing.
- Assisted living facilities and group homes for individuals with disabilities have the potential for high cash flow, with some facilities generating up to $10,000 per month per bed.
- Acquiring existing facilities through mergers and acquisitions is a scalable approach to growing a real estate business in the assisted living and group home industry.
- Anthony's debt fund structure allows investors to receive fixed returns and provides flexibility for scaling the business without the complexities of equity-based funds.
- The key to success in the assisted living and group home industry is understanding the target demographic, building relationships with organizations and caseworkers, and leveraging government contracts for additional revenue.
Notable Quotes:
- "You pay someone in life to go further. So I have a really good mentor. He's very big in the commercial real estate space and he has two funds and has been operating them since the market crash in '07." - Anthony Lawson
- "Assisted living and group homes have the potential for higher cash flow compared to traditional rental properties, making them attractive investments in the real estate industry." - Anthony Lawson
Article:
How to Scale Your Real Estate Business by Acquiring Assisted Living Facilities
Introduction
Scaling a real estate business can be a challenging endeavor, but with the right strategies and knowledge, it is possible to achieve significant growth and success. One unique approach to scaling is by acquiring assisted living facilities, which offer high cash flow and the opportunity to make a positive impact on the community. In this article, we will explore the insights shared by Anthony Lawson, an expert in buying and managing real estate-related businesses, as he discusses his experience in acquiring and operating assisted living facilities.
Key Takeaways
- Assisted living facilities offer a lucrative opportunity for real estate investors, with the potential for high cash flow and significant returns on investment.
- Acquiring existing facilities through mergers and acquisitions can be a more efficient and scalable approach compared to starting from scratch.
- By targeting specific demographics such as seniors, veterans, or individuals with disabilities, investors can tap into government contracts and programs that provide additional financial support.
The Benefits of Acquiring Assisted Living Facilities
Acquiring assisted living facilities offers several advantages for real estate investors. One of the key benefits is the potential for high cash flow. Unlike traditional rental properties, assisted living facilities can generate significantly higher income per bed or room. For example, facilities that cater to individuals with mental illness or developmental disabilities can command monthly rates of $5,000 to $15,000 per resident. This higher income potential allows investors to maximize their returns and build wealth more quickly.
Another advantage of acquiring assisted living facilities is the opportunity to make a positive impact on the community. By providing housing and care for seniors, veterans, or individuals with disabilities, investors can contribute to improving the quality of life for these populations. This combination of financial success and social impact makes the assisted living industry an attractive option for real estate investors.
Navigating the Acquisition Process
When it comes to acquiring assisted living facilities, there are two main approaches: starting from scratch or acquiring existing facilities. Starting from scratch involves converting a property into an assisted living facility, which requires obtaining the necessary licenses and permits. While this approach allows for more control over the design and layout of the facility, it can be time-consuming and complex due to zoning and regulatory requirements.
On the other hand, acquiring existing facilities through mergers and acquisitions offers a more efficient and scalable approach. By purchasing facilities that are already licensed and operational, investors can bypass the lengthy process of obtaining licenses and permits. This allows for faster growth and the ability to scale the business more quickly.
To find potential acquisition targets, investors can utilize various strategies. Cold calling facilities listed on state websites or reaching out to organizations that work with veterans or individuals with disabilities can yield promising leads. Building relationships with caseworkers and other professionals in the industry can also provide valuable referrals.
Funding Options for Scaling Your Business
To fund the acquisition and expansion of assisted living facilities, investors have several options. One approach is to raise capital through a private equity fund. This involves pooling money from multiple investors and using it to acquire and operate facilities. Private equity funds typically have a longer investment horizon, with investors expecting higher returns over a longer period.
Another funding option is to establish a debt fund. In a debt fund, investors provide capital that is used to acquire properties, and the fund manager pays them a fixed return on their investment. This approach offers more stability and shorter investment horizons compared to private equity funds. Additionally, debt funds allow investors to retain full ownership of the assets, providing more control and flexibility.
When setting up a fund, it is essential to work with an experienced SEC attorney who can guide you through the regulatory requirements and ensure compliance. Depending on the type of fund, there may be different exemptions and regulations to consider, such as Regulation D 506(c) or 506(b). Consulting with an attorney will help you determine the best approach for your specific needs.
Conclusion
Acquiring and operating assisted living facilities can be a highly profitable and rewarding venture for real estate investors. By targeting specific demographics and leveraging government contracts, investors can maximize their cash flow and make a positive impact on the community. Whether starting from scratch or acquiring existing facilities, careful planning and strategic funding are key to successfully scaling your real estate business. With the right approach and guidance, you can achieve significant growth and create a lasting legacy in the assisted living industry.
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