Senior Living Investing Explained: Per-Bed Revenue, 2X Returns & Operations

Victor Collazo (00:00)

the

property itself, can be what’s called a general partner. can actually be an owner of that. So that light bulb went off, right? I’m like, all right, my neighbor across here from me had 30 houses and it’s like, I can own 30 single, single family homes, which means 30 roofs, 30 titles, 30 different ACs, 30, 30 closings, 30 cells, right? Or I come on one property that’s 30 units, for example, one closing, one roof, one property manager, multiple tenants. so that kind of, that light bulb went off there and that kind of

That started my journey from there.

Dylan Silver (02:01)

Hey folks, welcome back to the show. Today’s guest is a syndicator in the commercial residential space, also in senior living facilities. Please welcome Victor Colazzo. Victor, welcome to the show.

Victor Collazo (02:14)

Thank you, I appreciate it. Appreciate the time today.

Dylan Silver (02:16)

I always like to start off at the top, Victor, by asking guests how they got into the real estate space.

Victor Collazo (02:22)

Sure, so we started on a single family side in Orlando area.

And after being managing all the properties ourselves, after some time we realized it wasn’t really sustainable. when I went to first, first time I learned about commercial multifamily, I actually went to Grant Cardinals, one of his real estate events, and learned that you can actually be an investor in a property. After that, did, but before, after that I went to another boot camp, by a gentleman, my mentor now, name is Rod Cleaf. And I learned that you can actually own

the

property itself, can be what’s called a general partner. can actually be an owner of that. So that light bulb went off, right? I’m like, all right, my neighbor across here from me had 30 houses and it’s like, I can own 30 single, single family homes, which means 30 roofs, 30 titles, 30 different ACs, 30, 30 closings, 30 cells, right? Or I come on one property that’s 30 units, for example, one closing, one roof, one property manager, multiple tenants. so that kind of, that light bulb went off there and that kind of

That started my journey from there.

Dylan Silver (03:22)

Walk me through that first deal, which I imagine you remember pretty well.

Victor Collazo (03:27)

Yeah, first deal was with

My first deal from a GP perspective was a property in Wichita, Kansas. So that property is 92 units, not too far from the airport. And most people here in Wichita, Kansas, and they don’t think, you know, there’s not too much sexiness about Wichita, right? But, you know, it’s not the Manhattan, right? Not the New York, the Miami beach or whatnot, right? But, so this deal was brought to me by another business partner I have and,

Dylan Silver (03:45)

Yeah, right.

Victor Collazo (03:57)

And on that deal, basically, he already had the deal. He already found the deal. And so they were looking for general partners to partner up on the deal. And this is somebody to have a pre-existing relationship with. So we connected and we talked about the numbers. I flew out there to the location and it just made sense. Again, to this date, it’s a great deal. We’ve been in there over two years now. know, like my shirt says, it’s cash flowing, positive cash flowing or paying out our investors.

So but yeah, pretty much it was just through networking. That’s how I got the other deal. So I got my first deal I should say

Dylan Silver (04:29)

Walk me through that on a maybe a little bit of a granular level here, Victor. Give away some of the gold, but not all of the whole bar. So you go to the Grant Cardone event and you start seeing that I could buy 30 single family properties or I could buy smaller to mid-size or larger commercial property. And you find this deal in Wichita.

How did you find the deal? Was it through connections? You mentioned connections. What were the steps? Did you download lists? Was it cold calling? How did you find this deal?

Victor Collazo (05:45)

No, so I’m part of another mentorship group called the Warrior Group and as part of that group, one of the warriors that I know from that group, that’s how it brought the deal to me. He actually found the deal and we connected and I actually jumped on his team as part of that deal. So that’s how I find most of my deals. I work with lot of brokers on and off market as well.

And but I do a lot of networking. I do a ton of networking every week. I’m at events as much as I can be. And so by being at these events, being at these large networking events specifically for for real estate, that’s how I’m able to connect with, you know, with folks that are that are looking to potentially offload deals. And this was an off market deal. So it wasn’t through a broker either. This was a deal that

Dylan Silver (06:15)

Yeah.

Victor Collazo (06:24)

that they found ⁓ from an older gentleman. He was in his 80s, I believe it was, and he just wanted to just cash out and move on with life, you know? So it worked out for everybody.

Dylan Silver (06:33)

I

want to ask you about the different markets that you’ve explored that first deals in Kansas, right? But you’re based in South Florida or in Florida.

Victor Collazo (06:41)

Correct, I’m out of West Palm Beach, Florida.

Dylan Silver (06:43)

Okay, and so I imagine you’re looking at deals in your backyard, but you’re also looking at deals across the country. Do you have a preference working, for instance, closer to where you’re at, or are you going to wherever the deal makes sense and maybe you’ve got boots on the ground?

Victor Collazo (06:59)

So I’m still looking at deals locally, but not super active here locally just because the numbers are not making sense. So I’m looking heavily in Charlotte, North Carolina. I’m looking again in Atlanta area, not necessarily in Atlanta itself, the suburbs of Atlanta. I’m still looking in the Wichita, Kansas. So we are a little bit specific for the markets, but we’re not necessarily looking in South Florida just because it’s just too expensive.

Dylan Silver (07:08)

Yeah.

Victor Collazo (07:25)

right now. ⁓ But we have a senior living portfolio that we’re getting ready to close on here pretty soon in the Orlando and Tampa area so those are still good markets.

Dylan Silver (07:26)

Yeah.

When you

talk about the senior living space, that’s another asset class that I think a lot of people are potentially looking at, interested in. seeing, we have this aging population. How are we going to handle this? Two questions that come up when I think about this. are there enough senior living facilities, especially in a place like Florida, where you do have a lot of people moving down to Florida and an aging population as well?

And then on the flip side of that, is there lots of interest, frothy interest you could say, in the senior living community space from investors, from private equity? Are folks looking at this and seeing opportunity there?

Victor Collazo (08:12)

Yeah, so I’ll answer the first question in terms of is there like a need? Yes, there’s a shortage, actually a shortage of senior living facilities. know, again, a lot of people here are senior living, retirement, they think specifically Florida because most people do, you know, majority of retirees that retire either come to Florida or typically Arizona, usually the warm states. Not always, but most of the time. I was talking to a business partner a couple weeks ago and they were out of Utah and they were looking to find

put a family member or senior living and they had no senior living facilities within over 60 miles. So they were looking at building because there’s nothing there and they’re in a major area. They were in Salt Lake City as well. So interesting enough in a such a major market where this person was at. So yeah, so it’s interesting how there’s such a shortage. It’s huge shortage. Definitely for, you know, there’s over 80,000 elderly folks, you know, every single day over getting over the age of 65 every single day. So that’s just increasing by the day.

Dylan Silver (08:49)

Yeah. Big market.

Yeah, my second question was, right.

Victor Collazo (09:43)

So in terms of investors,

yeah. So in terms of investors, yeah, mean, the returns, I love multifamily. It will always be our bread and butter because everybody always needs a place to live at end of the day. And in terms of the returns for the senior living facilities,

there are almost two times the returns we’re getting for our multifamily property. They are larger returns because you are renting typically by the bed and not by the room or apartment. So for example, here in Florida, for a regular, for a senior living facility, you’re typically anywhere between $4,500 to $6,000, or I’m sorry, about $4,500 per bed. Yeah.

Dylan Silver (10:22)

Wow. So.

Victor Collazo (10:23)

If

you have two people in a room, per bed, 8,000. So again, it depends on the market and the area. and again, you have senior living, assisted living, memory care. So you have different facets of that as well.

Dylan Silver (10:27)

Ryan.

Now,

when we’re talking about the management of these, it’s of course more intensive. There’s a lot more going on in a senior living facility, medical and all this. Really, it’s a space that I’m a little bit of a fish out of water in. When you got into this space, were you looking at this and seeing all the moving pieces that go into it and realizing you needed to have people in place or was there already partners that…

you had that were adept in this and had experience in the senior living facility space.

Victor Collazo (11:03)

No, so when I, for this specific portfolio, my partners, they already have other senior living facilities as well. So we have an operator that’s already very well experienced and they are experienced not just in senior living but specifically in our Florida market where we’re purchasing the property as well, which is very important. But yeah, the biggest challenge is employees, right? And turnover, that’s always a hard thing in the operation. So the key to being successful is not

Dylan Silver (11:25)

Ryan.

Victor Collazo (11:31)

having the tenants or the residents going in there, it’s the operations overall, right? Making sure that the residents have a place that’s clean, a place that’s safe, making sure they’re well taken care of.

You know, making sure that they’re fed well, making sure that the nutrition is right for them as well. So there’s a lot of moving parts. And remember, this is a 24-7-365, so you always have to have somebody there on staff, making sure that these residents are taken care of. But the biggest thing is making sure you have an operator that’s experienced specifically, again, not just in senior living, but in that market as well. Because a market in California is going to be different than a market in Ohio versus

versus Orlando area. The overall process is similar, but the operations are slightly different from that perspective. ⁓

Dylan Silver (12:20)

I’m thinking about

the ways for value add in that space and I’m thinking about, you you mentioned making sure that it’s staffed, clean, and then also the physical property itself. So there’s all these layers to peel back that are in this asset class that are not in others. Are there certain deal types, whether it’s senior living, whether it’s multi-family in some other markets, you mentioned Wichita.

that specifically have your focus and attention, these days are you looking at a variety of different deals.

Victor Collazo (12:50)

So we’re still, we’re focused mainly right now, specifically on the senior living facilities.

I’ll give you a great business plan example. Depending on the market, again, very market specific, ⁓ what you can do is potentially is you can take a senior living facility. That’s what we’re doing. We’re planning on taking senior living facility and taking part of that and transitioning it to memory care. By doing that, we’re to be able to increase our rents there as well, per bet as well. That’s definitely our focus right now. Investors are loving it. The returns are amazing.

You know, again, we’ve actually over subscribed. We had to stop taking investors, believe it or not, which is a good problem to have. Not our first time, know, this pretty much every time we raise capital that happens. So it’s a good problem to have. But just because of returns, it’s just an amazing thing, right? It’s just what we’re doing here, it’s helpful for the community. It’s helpful for our elderly, helpful for the investors. It’s a win-win for everybody.

Dylan Silver (13:44)

Yeah.

I mean, you’re creating jobs, you’re providing a living space, safe living space for the elderly, great ROI for investors. I’m curious, you did mention some other markets where there is a need there. Florida, of course, you’ve got an older population in large parts, so I’m sure it’s a lot of interest in Florida. And some of these other metros, you mentioned, like think Utah, Salt Lake City, are.

We seeing investing interest in senior living facilities out there or is it difficult because it’s a colder climate, it’s not necessarily very well established out there, is it difficult to start that kind of asset class in a place where it might not be ultra popular yet?

Victor Collazo (15:09)

Yeah, you would think that again, there’s that old, there’s an old vision of people that are retiring in the first place. I’m going to retire and go to Florida, right? Where it’s warm all the time. Well, that doesn’t always happen. You know, again, my partners have, they have a, ⁓

Senior living facilities in Georgia and they also have it in which is a great location believe it or not Milwaukee, Wisconsin The reason they have it they kept it there is because there’s in this in the Midwest a lot of folks are very family oriented my family, you know, I have family that are from Wisconsin as well, so

they go there they don’t want to leave you know they and they want to be around their kids or the kids want to be around the parents or whatnot or whoever’s in that assisted living facility, I’m sorry, senior living facility so they want to keep it local they don’t want to put them all the way a thousand miles away where they can’t visit their parents or their grandparents or whatnot so I mean yeah Florida is a great market but that doesn’t mean other markets are not doing well again. Wisconsin’s doing great you know.

someone that just closed on a deal in Philadelphia as well. ⁓ I’m not too familiar with the myself, but yeah, so mean the markets can be great even though maybe some of the colder weather as well.

Dylan Silver (16:05)

Yeah.

We

are coming up on time here, Victor. Where can folks go if maybe they’re interested in reaching out to you, learning some more about the deals that you’re exploring or having the pipeline? Or maybe they’ve got a deal themselves and would like your feedback on it.

Victor Collazo (16:25)

Yeah, so you can go to my website, ExtraordinaryAssets.com. I’m also on Facebook and Instagram, so feel free to connect with me there. I love to connect with others as well.

Dylan Silver (16:36)

Victor,

thank you so much for coming on the show here today.

Victor Collazo (16:38)

Thanks Dylan, I appreciate it.