Rocket Your Dollar Ep.11: Senior Living Real Estate Investing

When it comes to real estate there are many assets to choose from, our guest today Paul Rogers (as seen on Oprah) is choosing senior living for his latest real estate investment and shares why on this episode. Rogers invests in real estate, has his own fitness business and also mentors real estate agents and investors who want to take it to the next level.

Transcription:

Dan Kryzanowski:Today on the show we have Paul Rogers, owner at The Paul Rogers Real Estate Team, and we're going to discuss achieving financial independence through passive income. Paul, welcome.

Paul Rogers: Thanks, Dan, good to be here today.

Dan Kryzanowski: Awesome. Paul, big question, why are you excited to be in real estate?

Paul Rogers: Well, in my background, I've been in real estate sales and investing for 30 years. I grew up in St. Louis, I was a fireman and EMT there for 17 years. Growing up, my uncle was a pharmacist, he always had real estate deals on his time off from being a pharmacist, and that's how I think I got my bug to be getting into real estate. And so, once I had that secure fireman's job, I started investing in real estate back in 1987. So anybody that's out there listening to this podcast, or getting to see the video, if you've got a full time job, been there, done it, did it. You've got opportunities, just get out, get some education, get your first deal going, surround yourself with like-minded people, and you'll do well.

Dan Kryzanowski: Awesome, that's great. So you mentioned St. Louis 30 years ago, so taking us back, obviously you have great success, a lot of folks know you across the country. Maybe take us back even to the 80s and 90s, your thoughts, how you got into it, how you dipped your toe in that first decade.

Paul Rogers: Yeah, the first two deals I did were VA foreclosures. So somebody served in our military, they got a zero down loan, they didn't make the payments for whatever reason, the government takes that house back. Back in 87, 88, 89, back in the late 80s, as an investor you did not have to be a veteran to buy these homes. And for $100 down you could buy a $100,000 house, 30-year fixed loan, 6% interest rate. To get into buy and hold longterm, most of the time you need 20% down. That's the beauty of people using their IRA moneys, because the funds are there available. But back then, it was $500 down.

I bought three houses like that, and I started talking to the real estate agent that was helping me buy these, and I said, "Well how do you get paid?" And so he told me he was making a 6% commission on these. So I went ahead and got my real estate license at that time, and used my real estate license to buy properties, worked with investors then to.

I've always been a big fan of anybody wanting to get into real estate investing, to get their real estate license, to use it part-part-time, part-time, or even full-time. Because, out of 100 people that I meet that want to be real estate investors, there might be one or two that actually make it and do a deal or two. But 10, 15, 20 of those people would probably be good part-time agents supplementing their income while they're learning the ropes in real estate that gets them into the real estate investing.

It's not that it's a different market now, there are always cycles, there are always things going on, but if you've got money sitting in an IRA or you're looking to start an IRA, that's a great way to go.

Dan Kryzanowski: You mentioned the 100 folks, and I'm sure you've mentored hundreds, thousands of folks over the years, what's the one personality trait or factor that you see in somebody who really does push forward and wholeheartedly embraces the real estate?

Paul Rogers: I think it's going to be the person that embraces education. When I went to my first real estate educational event, Robert Kiyosaki was the keynote speaker, it was down in Dallas, Texas. I didn't know anything about real estate investing workshops, real estate investment coaches, personal growth coaches. But I think it's the person that's going to continue their education, and whether they pay for the coaching, or whether they get in a mastermind, or whether they get in a meetup group and go to their local real estate investment club meetings, it's going to be that person.

It's going to be the person that says to themselves, "I'm in this for the long haul." Give yourself at least three years. I tell everybody, give yourself 36 months to figure out your little game. I've made a lot of mistakes through the years, and at 55 years old I'm proud of my mistakes now. When I was going through them, they were embarrassing, they were tough, they were stressful. But now when I meet anybody, I say, "Ask me my mistakes number one, let me tell you my mistakes so hopefully you don't do those. And number two, let me tell you what I'm personally working on in my life to build wealth."

Because when you talk to people, if you can ask them what are their top two goals, and you write those notes down and you make a database of 1,000 people that you've met and you know their top two goals, and you can be the deal maker, the guy that's in the middle of all this, you can make a lot of money just being that person there.

It's really somebody that's going to keep their education going, because you only know what you know right now. If you want to learn single family house flipping, go find some people that are doing that in your area. Ask them if you can intern for them, see if they'll tell you the mistakes that they've made. See if you can help them network with people that they need to meet with them too, to accomplish their goals.

Dan Kryzanowski: You mentioned Robert Kiyosaki. I think it's funny, when I was doing some research on you and Laurie and your team ... My wife of course is from Mexico, so half of my searches are in Spanish, and it said Padre Rico Padre Pobre, so Rich Dad Poor Dad, and it's on my list for my vacation next week. If I can only bring one thing on the carry-on, that's what I'll bring. But some of the folks might not know about Robert, tell them about your relationship and what transformed when you heard him the first time. And then more so, does this resonate today, as we approach 2020?

Paul Rogers: Yes. So I went down to that event in Dallas. Anybody that hasn't read it, here's a copy of Rich Dad Poor Dad. It's the number one personal finance book in the world, 15 years running. Robert's got a board game out, if you can see this, called CASHFLOW. And so when I had met Robert at the Dallas event back in 1999, he was the keynote speaker, and they were talking about IRAs back then too. I actually set my IRA back up in 1999.

But Robert was talking about building wealth through business, stocks, and real estate. And Rich Dad Poor Dad, it's an easy read, I would suggest anybody to go get it. You know that thing out in two or three days, and you'll be amazed at how your mind starts to change. After I met Robert at that speaking event in Dallas, I bought the CASHFLOW board game that I just showed you, that was a $200 board game back then. The good news is you can buy that for $85 now.

But in the game it teaches about stock investing, business investing, real estate investing, income statements, balance sheets, the stuff that schools don't teach us about.

And so I brought that game back to St. Louis, Missouri, and on Friday nights started inviting people over playing the game. I've actually hosted a CASHFLOW board game night the last Friday night of the month for the last 19 years now. I didn't plan on doing it like that, it just ended up like that. But it's a way for me to give back through financial education, because I've been very fortunate to be around Robert these 19 years, and it's a way for me to network and meet other people.

So really just grabbing two people listening in on the podcast or watching the video, you either have money to invest or you don't. If you've got money, then you start looking at the deals and analyzing deals. If you don't, you're going to have to learn how to raise money or become that deal maker, be the person in the middle and find somebody with a deal, find somebody with money, put the two together, and take a little piece of that pie.

But being in Robert's message in all of his books has been a life changing experience for me, and I've passed that on to everybody. Anybody that I'm looking to coach with, either real estate agents, real estate investors, new, seasoned, old, I always ask them, "Have you read Rich Dad Poor Dad?" And if they haven't, I say, "Go get the book, can you get it today or tomorrow? Great, go get it. Read the first four chapters, give me a call, let me know what you're hearing." And what that does is it's a benchmark. It lets me know if somebody is serious about changing their life. Most people say they are; most people really won't go through the steps, though, too.

Dan Kryzanowski: Yeah, fair point. And first I will change my calendar to be out your way for the last Friday of the month, I think that's exciting, and it gives me a little onus of something-

Paul Rogers: Well, and anybody that's listening once again, or watching, get a hold of you, get a hold of Dan, get a hold of myself, because there are probably meetup groups going in your area. And if there's not, I can show you how to set up a CASHFLOW meetup group. You play the game once or twice, you'll get through it, you'll be fine, you learn every time. And it's really from playing that game that I saw opportunities in the game, they more I played it, I saw more opportunities.

And that started showing up in my life, because I was a guest speaker on The Oprah Show with Robert, and we'll give the link to that too, but it's all about the mindset. It's about what you're thinking, what you're speaking to the world, what you're writing down for your goals, who you're surrounding yourself with, and taking those steps day in and day out. Good day, good day, good day, bump in the road. Good day, good day, good day, bump in the road.

Dan Kryzanowski: You mentioned before that basically you're at the fork, either you have money or you don't. When you were doing your initial deals, were you sitting on a pile of money, or how did you approach it?

Paul Rogers: I'd probably be like 90% of the people that are listening in on this podcast, I was a fireman, and my ex-wife, at the time we were married, she worked for a bank. So we were doing okay, but we didn't have a lot of reserves. I was young, I was 23 years old when I started. I was just fortunate that those VA foreclosures worked out that I could get in with nothing down.

Then we bought a two family, and then we bought another two family, and then we bought a four family, some of you call them four-plexes. And those had such nice cashflow that those allowed me to keep qualifying for more loans. But at some point in time, most of the people listening in here, you're going to run out of money, reserves, to actually go buy the next deal. So you're going to have to learn how to raise capital. And that's something that I work with people all the time on too.

Dan Kryzanowski: And do you feel the spirit, or tactically, raising capital, it's different now than 20 years ago, 20, 30 years ago when you were doing it?

Paul Rogers: Well, I would definitely say this, it's definitely different from that 2003, four, five timeframe, because money was just flying. Once again, I was living in St, Louis at the time. I met my wife about 12 years ago, she lives in Sacramento, California. She didn't want to move to St. Louis, I didn't want to move to California. She won out, so I moved out here about 12 years ago, and it's a different mindset on the coast, there's no doubt about it.

Back in that 2003, four, five, six timeframe, money was just flying. People had equity in houses, pulling that equity, money was just flying, it was very, very easy to raise capital. Nowadays it's not as easy as it was back then, but if you've got a good project ... And we do senior living, that's what our focus has been in the last three years, anything around assisted living, memory care, anything around seniors to me is the future. It's just a safe, secure investment, good return.

There's plenty of money sitting on the sidelines now for the right deals. And when the stock market re-corrects, I don't know if that's six months, 12, 24, 36 months, but that's been on a roll, it's going to re-correct. And the people that are listening now that are planting seeds with people, letting them know they're in real estate investing, or they're getting in and they're looking to joint venture with people, those seeds that they planted, when the stock market takes a hit, it's going to go flush the real estate.

That's something I would be suggesting to people, is be planting those seeds with people that you're in real estate and you're willing to joint venture with them on deals. They put the money, the credit in, you bring the deal to the table.

You hear a lot of speakers say, "Money's the easy piece. Find the deal, and the money will come flowing to you." I'm going to say for the average investor, good luck with that. I would line my capital up first, two, three, five, 10 people with money, know what you could borrow from it for interest rise, 6%, eight, 12%, or joint venture with them. Line that money up first, and then be looking for the deal then too. Because I've seen it too many times with the new people, even seasoned people, they find a deal and the money's not there.

Dan Kryzanowski: Yeah, that was such tremendous advice for our listeners here on the podcast, I'd say rewind and listen to that five minutes again. I have a great page of notes, so thank you for sharing. One thing you mentioned that excites me, you call it senior living, I might be a little cheeky to call it the silver tsunami.

Paul Rogers: Oh, right on, brother.

Dan Kryzanowski: Hopefully this is a softball here, but do you see this going anywhere? I have some pretty strong evidence to say no, but I want to get your take. I'm a former GE real estate guy, I have an old 401(k) probably sitting in some mutual funds somewhere. Why should I feel secure that I'm going to, round numbers here, give you 100,000 to dip my toe in the water in one of your senior projects?

Paul Rogers: That's a great question. Always do your due diligence, we tell everybody, talk to your tax professional, talk to your legal professional. Senior living, though, anybody listening, you know what age you are, whether you're 25 and you've got a 65-year-old grandma, whether you're 55 like myself and you've got an 85-year-old mother, we're all aging. And there is not enough quality, private pay housing out there, beds out there, for people. And if you're on the poor side or the middle-class side and you need a government bed, good luck even finding one that's available now.

As 10,000 people turn 65 every day, when you think about that number, where are they all going to go? Everybody's living longer. And so, to me, a safe investment is being two or three or five years ahead of the curve. That's where we are with senior living. There are not enough quality beds, and we do all of our stuff private pay, we're not involved with the government-funded programs. Nothing wrong with that, but it's just not our business model. We want people that have money, that want to pay for nice things and get great services.

If you're going to invest with us in St. Louis, or if we did a project in California, we've got business partners that we're involved with that have been doing it 16 years. So always take a look at the track record of who you're getting involved with. Our business partners have built three developments in Tucson, Arizona, filled them up, stabilized them, sold them off, took the profits off the table for the investors and themselves, but they stay in on the management side.

That's our business philosophy for the next 20 years: find the ground, build it, fill it, stabilize it, sell it off to a private investor, and then stay in on the operation side. So anybody that's listening to this, if you're in a populated area, 50, 100, 200, 300,000 people, by all means I'd love to talk to you because we're looking to joint venture with other people nationwide then too.

Dan Kryzanowski: Awesome, awesome. Yeah, and I'm with you, I have an older aunt and uncle, and they want to live comfortable, deservedly so after a great career. And I forecast the next generation will be right behind them.

Paul Rogers: We talk about it too in the CASHFLOW game. Once again, in this game here you've got small deals and you've got big deals, and in the game a small deal would be to buy a single family house, hold it as a rental, have $100 a month residual come in. Residual is where you've done something once, and it comes in month after month. On the big deal in that game, maybe you buy a 10-unit apartment complex, and you've got 5,000 a month residual coming in. So in that game you've got small deal, big deal.

In real life, in senior living, small deal would be buy a single family house, make it a six-bed assisted living, not six bedrooms, six beds converted. You need about 2,000, 2,500 square feet. In California, at least where I live in Sacramento, it's 25,000 a month income, 15,000 expenses, 10,000 a month net. Let me repeat that. One house, six elderly people living there, you have a house manager running the place basically for you, 25,000 income, fifteen expenses, ten net.

If that's not something that you want to do yourself, I would definitely look into investing in those. So I would call that a small deal in my world, and most people probably listening to this call here, for 90% of the people that would be a big deal, 10,000 should retire anybody residually.

What we're doing in our St. Louis project, we're building an 80-bed facility. So instead of 10,000 a month coming in, it's 120,000 positive cashflow a month coming in. 120,000 a month positive cashflow. So that, to me, is a big deal. So whether it's a small deal, big deal, we can help you with educating you on what those are, and are there opportunities in your backyard where you actually set it up yourself and run it, or you joint venture with the right people, or you team up with us and we look to joint venture with you then too. So we're open to any and all of those things.

Dan Kryzanowski: Got it. And on this, I usually mention this at the end, but how would folks get in contact with you?

Paul Rogers: I think the best way, I'm old school, I'm a cell phone guy, and my number is (916) 751-9309. It's Paul Rogers, (916) 751-9309 is the best way to get me. My email, I'll say it and then I'll spell it, paulrogersrealestate@gmail.com.

And a lot of people say, "You can take calls all day long?" Yeah, I can take calls all day long. I've been very blessed with my mentors, with my wife, with my family, and I want to give back.

It comes down to this, it comes back to that CASHFLOW game. If you'll sit down or get on the phone with me, a confidential call, and we have 15 minutes, and you tell me where you've been in life, what have you been doing work-wise, career-wise, school-wise, family-wise, where are you at right now in life? This is why it's financial, personal. Where do you want to go over the next three years, five years, 10 years? And we sit there and look at your income statement and balance sheet, so I know your health history, I know your family's history, I know where you've been, I know where you're at, I know where you think you want to go, and I know your finances.

It's all in black and white. I can tell you your future. I am a psychic, I'm a financial psychic. I can tell you where you're going to be in a year, or two or three years. And I'll give you an example. If you're a state worker, or if you're a police officer, or you're a nurse, you know what you make, you know what your bills are, you know you're going to get a 3% raise next year. You can look at that for the next one, two, five, 10 years, and you know where you're going to be.

If you're not happy where you're at, and you want to change something, you've got to do something differently. That's where we can implement bringing the real estate strategy into it somehow in your life, per your background, per where you're at, and per where you want to go. Most of the people that I meet, they want to buy a 100-unit apartment complex tomorrow, but yet they haven't had stability in their life, they don't have the finances for it, they don't have the mentality. So we're going to have to start at very basic stuff right there. So it's all in the income statement, balance sheet, and your story. 15 minutes, I can tell you your future.

Dan Kryzanowski: You sound better than Geico, and I know it. I know folks that have worked with you before, and personally, I just crossed 40, and all of my money has gone with folks that I've talked to one-on-one for these very pay-it-forward sort of discussions. And it has been the phone, not the eye-in-the-sky, it has been the deeply personal sort of level. So thank you for that.

Paul Rogers: Sure.

Dan Kryzanowski: I said we've been blessed, we've been very fortunate to travel the country, a lot of-

Paul Rogers: That's the thing too, most of the people, I'll be straight up with you, everybody listening to this and watching this, I'll be straight up with you, I said it on the Oprah show ... If you get a chance, if you go type a Google search, Paul and Laurie Rogers Oprah, Paul and Laurie, L-A-U-R-I-E, Rogers Oprah, you'll see a 15-minute clip of the hour long show. If you want the hour long show, I can get that to you. But the 15-minute clip, it's Robert and I talking about exactly what we're talking about here.

Most people will listen to this or watch this and they'll go back to their regular life. And more power to them, no problem. But if they want to change something, if they want to add more wealth, if they want to add more friends, mastermind, accountability partners, I don't mind being somebody's accountability partner. Call me, give me a five-minute conversation, shoot me your goals, I'll touch base with you once a quarter to kick you in your butt. You're doing good or you need to kick it back in gear kind of a thing. But most people, it's just a lazy society.

Dan Kryzanowski: Yeah. I think my wife will take you up on that offer here for the accountability side. With that, just for fun, I've seen Jon Hamm and some other great folks in the Midwest. St. Louis, if we're there for a show, conference a few days, outside of the arch, maybe catch a cards game, tell us something fun about St. Louis kind of off the grid that we should do.

Paul Rogers: Yeah, depending on what time of the year that you get there, St. Louis is actually a very beautiful city. It's got four different seasons, I love the fall the best myself right now, because it seems like life just slows down. But in summertime we've got the St. Louis Cardinals, Busch stadium, beautiful place to go if you're a sports fan. We've got the Stanley Cup championship Blues hockey team, so anybody that's a hockey fan, if you're there at that time of year, you've got to catch that.

We've got a world class zoo, world class planetarium, and I haven't been back in a little while, but they've got a new aquarium going in back there too. So the arch is definitely the place that everybody goes to, and don't be afraid, the arch that you see on TV, you can actually go up in there. It's a little elevator thing, you ride in this little egg pod, it is fun.
St. Louis is a beautiful city. Anybody wanting to go there for vacation or a conference, once again, call me, (916) 751-9309. Give me a call and let me know what you're looking to do there, and maybe I can introduce you to people then too, to take you around.

Dan Kryzanowski: Awesome, that's great. And that'll help with some of-

Paul Rogers: Let me say this too, very cost effective. I live in Sacramento, I've been here 10 years, we own a real estate brokerage, residential brokerage company that my wife really runs, and we've helped 250 families in the last 10 years buy or sell a house. How they afford it out here, I still don't get it, and I'm out here doing it daily. A house out in California for 300,000 is maybe 125,000 in St. Louis.

A firemen in California makes 100 grand a year, a fireman in St. Louis maybe 90. A nurse in California about 25 a year, a nurse in St. Louis, maybe 90. So the income is not that big of a difference, and it still amazes me how people afford houses out here in California. St Louis, very cost effective, 3% appreciation each year.

Senior living, it's the place to be. I'm telling you, it's the place to be. If you do one deal on your own in your backyard, and you can make 10,000 a month, if I'm half right and you can make 5,000 a month residual, what a great day. And what somebody can do is do their own research. Pull up the zip code you live in, type in assisted living memory care, see how many houses are in that area, or facilities are in that area. They're all licensed by the state.

Let's just say there's 10. Go visit all 10 of them. Talk to the salesperson, talk to the executive director. You walk through 10 of those, you'll figure out, "Yeah, this is a business I need to look into," or, "No, it's not for me." It'll happen just that fast for you.