Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Mr. Loe Hornbuckle. He is the CEO and founder of Sage Oak Assisted Living and Memory Care founded in 2015 and he focuses on or at least Sage Oak focuses on boutique assisted living with five location in a total of 40 beds and he also has a couple of ground-up developments in the works. He is 37 years old and lives in Dallas Texas. Loe, welcome to Wealth Formula Podcast.
Loe: Thank you for having me Buck. How are you today?
Buck: I’m good man. I mean you and I I mean you are on Facebook a lot you know and so I find your feeds pretty entertaining. So you know I have sort of unfollowed probably about 90% of people on there but frequently I get caught up in the Loe Hornbuckle stream.
Loe: I mean I kind of like I think there’s a lot of people that just enjoy the fact that I try to be authentic online and there’s a lot of fake people online or not and the same person offline and online so actually I’m probably more reserved online if you can believe it.
Buck: Yeah well that’s that’s interesting. I agree with that yeah I don’t really have a social media body double either and find myself saying things that are sometimes controversial or whatever or coming across very abruptly.
Loe: Not you, no way.
Buck: So anyway yeah we’ve been going back and forth on social media and I kind of got curious about what your story was and it looks like you know I mean you’re involved with an area that we don’t talk much about on the show for these days we have in the past but you got interested in assisted living. So what’s a guy who’s you know back in 2015 you have been went 33 years old so what’s a young buck like you interested in assisted living for? What’s the idea? What got you into it?
Loe: Yeah so first thing when he says young buck I assume he means deer reference and not not that I’m the spitting image of him as a young man, but no I think the reality is that a couple of things I mean I kind of consider myself a social capitalist so I try to I try to do things that I have a personal connection to and I feel good about but also have a profit motive behind it and I think sometimes it’s easy to get caught up in one or the other and it’s always nice when you can find a deal that has both. So I got into assisted living because I thought it was a great business opportunity however had a father that went through a bad experience on hospice and that was when I got into the business all those emotions and feelings kind of started flooding back and I kind of realized that this is kind of my opportunity to do something positive in the face of something that was negative for me and my family. And so that’s really kind of what I think kind of kept me in the business and I kind of have a very different background for most people in the space so it kind of allowed me to kind of bring an outsider’s approach and that’s what I think it’s kind of allowed me to grow relatively quickly is that I look at the I look at the problems in the business from a different set of eyes and that’s been kind of helpful so I’ve got to be careful that I don’t relinquish my outsider status by being too much of an insider.
Buck: Yeah like every presidential election right?
Loe: Yeah that’s one one angle. Hopefully I’m more qualified than any of them so.
Buck: You know this is an area actually assisted living that I personally look back a few years ago and you know for me on the surface it was very attractive. But I found you know some bumps along the way and I want to I want to talk to you about those because obviously you know you got four or five locations here and you’re doing pretty well. One of the issues that kind of spooked me a little bit was in talking to some of the banks involved on the lending side particularly Chase which I do a lot of work with they simply were not interested in lending money at the time because despite the demographic crunch that we’re hearing about coming they were finding lots of failures in this area in part because this well maybe there’s a demographic crunch coming but currently we these places there’s there’s just not the need to continue to and create more facilities. I’m not saying it’s true or not I want you to respond to that.
Loe: Actually Chase is as a lender on all at one point all five of the facilities we refinanced a couple of them. So assisted living is probably one of the more unique sort of real estate plays and that’s very very underwritten on the operator and so if you presented a package with an operator that they believed in they might have had a different answer I know and I know enough about your business model to know that a lot of times you’re picking a jockey is a partner you’re picking an operator as a partner you know you’re Jay ving with an operator. So if you pitch them the concept without an operator for them it’s too abstract because the lender oftentimes says we don’t want to take this over right banks don’t want to take over assisted living facilities so they’re betting on the operator more than anything else. So I found pretty good success and getting stuff under written but a lot of that’s just because I’ve spent the time to speak to talk to to be able to speak. One of things I really try to get good at is being able to talk to the average person who doesn’t understand assisted living like say a banker and be able to talk to them in a way where they can understand what it is that we’re doing how its unique kind of where the industry is headed. I think you’re spot on with the demographics. I always make a joke if I can make it to an entire podcast without saying the phrase baby boomer that I should win a prize I usually do except in this segment here where I reference that I’m not going to say it, because it doesn’t really matter right because the average baby boomer I mean the average person in assisted living is 87 the oldest baby boomer 74 so on average they’re not going to interact with a product for 10 or 13 years so for from my perspective they’re just now starting to get into independent living my business models focused on dementia care and assisted living meaning that people maybe aren’t choosing us because they want to they’re choosing us because they have to get care somewhere and so because of that you know we’re focused on serving the current needs and one of the best ways you can do that is be unique. I would agree with chase that it’s very easy to make yourself into a commodity in this space and so it’s all about the operator the story they’re telling and kind of what what they’re going to be doing in the space it’s going to set them apart and that’s that’s been true for us as well any time we’ve tried to you know work inside of a commodity it’s not a commodity business right it’s a personal business.
Buck: One of the things you mentioned there they think is also really important because when I was doing this and at the end of the day I didn’t stop, this thing for me I had you know essentially one of these homes I thought I’d give it a try. Bought a house and it didn’t fail because the financing part at the end you know the SBA was very interested in it but the reason it ended up failing was a situation quite simply that we had a bunch of not in my backyard people and we were zoned properly, everything was done right. But they made life a living hell. And these are sort of the unknown factors where I think to your point like I think the thing that one of the things that concerns me is there’s within this sort of podcasts ecosystem there’s this idea that it’s something that hey anybody could do and I think there’s a lot of danger in that because i was as for me they weren’t significant but if somebody’s putting a lot of money into this for themselves just to do it on their own this is not this is not like you know buying a single-family home is it?
Loe: Well no I mean it’s a service business with a real estate component so it’s working 90% operations 10% real estate now obviously your location matters that is on your building that all matters but I mean it’s all about you know who’s your manager who’s the care team you know what what value does the owner add if they’re gonna be active in the business or passive those things all matter. That the not in my backyard sort of crowd the NIMBY crowd I think they’re really important thing to understand and I’ll tell you kind of a funny story I got into a discussion with a bunch of not in my backyard folks on next door which is like a media like a neighborhood based social media platform and I was very respectful I’ve gone down the rabbit hole of getting into arguments online and said hey here’s what we’re doing you know please come check it out here’s my phone number that kind of thing engaged when I could and actually had a person call me based on that discussion where I was persona non grata very clearly move into our facility because she witnessed me had this conversation and she’s like hey I didn’t know who you were in our neighborhood and she moved her mom in. So for every person that’s aggravated that you’re there there’s probably four or five that are happier there they just don’t vocalize their opinion. And so for me that was really eye-opening to realize that there’s an element of that to it besides probably your first question.
Buck: I think my point on that was that they never let it happen, right? I bought the house. And they they did everything in every possible way to obstruct my ability to move forward and turn it into an assisted.
Loe: You said you were zoned for it. So if you were zoned for how are they able to do that?
Buck: Because the reality is that they can make your life miserable they can make you do traffic tests they can make all sorts of stuff before you know it.
Loe: Was this in California?
Buck: No this was in Illinois.
Buck: Not even Cook County.
Loe: Got it.
Buck: Again so that that was a lesson for me and believe me I’m not saying that this is you know your model whatever your who does this you know for a living now and my point is that my concern is this idea that anybody can go out and do this and it’s not that hard I found this to be extremely challenging and time-consuming ultimately not a good deployment of capital for me personally as an operator but okay so let’s talk about that boutique part two because that’s something that you and I you know listen I think it’s a wonderful model in fact my mother in law I moved her in my wife and I moved her into an Alzheimer’s facility here in Santa Barbara which is a small is probably maybe twelve maybe ten maybe ten and it’s fantastic okay it’s absolutely fantastic and the owners there all the time. And that’s one of the reasons that makes so damn fantastic because this cares so much but that’s the exact same thing that I turn around and say how is it scalable how is that model scalable?
Loe: So I think there’s a few things. So I think I’ll maybe go back to your original question and tied all together so I do think the idea that anyone can do this is potentially potentially incorrect. You know I work for an organization that helps train people on to do this and part of the reason why they hired me is I have a very different story from the gentleman that runs the organization and he’s progressive enough to say hey you know let’s assemble four or five people that have different stories I’ll tell mine you tell yours and people are gonna resonate with who they resonate with so I never tell anybody this is easy in fact what I like about it is you think about yourself you’re an accomplished guy you couldn’t get it done or didn’t want to get it done. So what that means for me is that’s that means there’s more opportunity for me because I’ve got a barrier for entry between you and me so that can be a very positive thing right so that’s that’s the one positive from that. The second component is is that you know imagine that you had to get that place open to survive or imagine got to get that place open to be successful if that was if your identity of success or your identity of financial success was wrapped up in that event you might have figured out a way to get it open ultimately you said for you that it wasn’t a substantial loss it was a loss that you didn’t want to take but you’ve got all these other streams so there might be a case be made that in your case your why about getting that one facility open may not have been strong enough because there are speed bumps you’re gonna run into I’ve dealt with neighborhoods that didn’t want me there as well and ultimately I’ve got to sit down with 50 neighbors and have a conversation with them we were able to effectively do that the other thing that I would kind of say is I always always start with the legal framework of where the facilities located is my first thing and some cities have very clearly design rules where your neighbors can’t stop this. So basically if you’re allowed to do it by right versus hey you got to send a letter to three everybody within 300 feet they get to weigh in it’s a much different process. I’ve gone through commercial approval processes before I’ve seen them sail through with no opposition on five-o and I’ve seen them being very very contentious. So a lot of it just depends on the neighborhood population in my five different houses I actually occasionally we’ll put up legal signs that have the name of the facility and the phone number one neighborhood let it stay for one year before someone complained and another neighborhood it lasted one day so just think about how different those two neighbors are so that’s just a different there’s a lot of that that kind of goes into that process but in terms of the scalability question I think that that’s awesome that the owners are there if I were selling against that owner one of the things I would say to the family is that’s great what happens if the owner gets sick what happens if this happens and so I’ve always consciously tried to realize that if I make myself the center of the business while it may be good for quality control and it may be good for certain things I’m just one person it’s gonna limit the number of people that I can help and it’s also gonna limit my ability to scale as you described. So I hire people that have big hearts that have backgrounds so my corporate staff is I’m very corporate staff heavy so most care homes would have one or two positions whereas I might have three or four positions you know I’ll hire a nurse even though it’s not required you know one of the guys that works where he has his master’s in gerontology so I try to hire really qualified people that also care a lot and so you know I try to hire people that are gonna do things without me having to ask so I went to the facility today and I there was a sign on the door and it said hey we’re changing the code if you have the code please be aware we’re changing the code please let us know if you have any questions and the family asked me why we were doing that I said I don’t know but I’m sure they have a good reason. So the point is is that I think it can absolutely be scaled one of the things we try to tell people is if you’re gonna do this one care home is a lot of work two care homes is twice the work three four or five care homes you can really hire a good team. So it’s kind of the difference between you know doing a multi-family complex that has 20 units or doing one that has 200 units the scaling is gonna be better the more revenue you have and that’s that’s really what I’ve tried to do and that’s why I’ve tried to grow so fast.
Buck: Right. Let’s go back to sort of this boutique model. Can you describe it for people who don’t know exactly what we’re talking about there?
Loe: Yeah sure. So you know for me Boutique is always gonna be small it’s gonna be an intimate it’s gonna be kind of a limited number of people and then also too I think it carries you could have some in small and intimate that’s also kind of sort of Loer end that caters to maybe like the Loer middle or below and so we really kind of go after kind of the upper middle or the Loer high end so our facilities are probably twenty to twenty to forty percent more expensive than national average and we do that because we really want to make sure we provide a really high service. I do think there’s a huge need to solve the affordability problem in senior housing I don’t know that I’m the guy to do that because I notice every time I’m doing stuff I gravitate toward how to create revenue and I’m not the guy that wants to look at how do I cut expenses and I think the answer in solving the affordability crisis of senior housing is an expense driven one. So kind of what I think is gonna happen on the affordability side is I think you’re gonna see a house like what you described with your with your your mother-in-law maybe there’ll be one person and a couple of robots because that may solve some problems you’re always gonna have to have a human element but labor is a real challenge in our business and so I there’s going to have to be and maybe you have in each room there’s a startup company I don’t think they’re doing a very good job I almost did some business with them but I think the ideas sound they’re putting medical-grade radar in resonance rooms and they can track breathing rates they can track all kinds of things and so you literally can can feed this into an algorithm and predict ok you’re on track today urinary tract infection or you haven’t eaten as much or haven’t had enough to drink today. And so I think you can do some things with technology to solve the affordability piece and I think that’s fascinating but from my perspective I just want to be a guy that provides really high level service. And so I focus on you know six thousand dollars a bed sixty-five hundred dollars a bed as opposed to the $3500 a bed I would love to potentially have a separate brand that works on the affordability issue but me personally I’m wage driven by how do I add value to these people and how do I charge more versus how do I save the dollar a day on food that’s just not that’s not who I am as a person.
Buck: Right okay so let’s kind of go back to this again in terms of an individual. Because again I’m trying to do two things here and trying to address the idea because people have asked me whether you know what do you think about you know starting one of these things or whatever and then there’s the other part of it which is you know having somebody like you who you know you partner with or whatever. Let’s talk about the pitfalls of the you know single family homes conversion.
Loe: So yeah to your to your question in terms of you know I guess there’s two pieces to it basically whether to start one of these I don’t think I would start with the goal of starting one I think that’s the first thing you may do one with the so my approach and what I’ve always told everybody is I actually when I went to the class to learn how to do this there was a couple that was in the same class as me and philosophically they were probably pretty aligned with you and they said we’re gonna be hands-off we don’t wanna give ourselves a job and I said that’s cool I’m gonna be hands-on and I said it’d be kind of funny like we place a bet on how that goes and we didn’t place a bet we had a discussion about it and the idea was I said listen I wanna if you’re a boxer you spend your entire career trying not to get hit but you also need to learn how to get punched. That’s a very important part of being a boxer but all the things you train and do is about avoiding getting punch and delivering punishment but the bottom line is you can be great at that and the first time you get punched you just fall to the ground you’re not gonna be very good boxer. And so an assisted-living what I can promise you is you’re gonna get punched it’s just gonna happen there’s pitfalls or challenges fitness though that’s not just assisted-living well to do you is that the idea that this is just some asset they use you know buy or you acquire and you set and forget it is bullshit it is it’s a business and agreed I think it can get to that place I do think that I do think that the the gap between A to Z or A to C or wherever you want to set the endgame I think it’s definitely achievable and there are people that have pretty close systems I mean I spend probably if I’m not trying to hire a key corporate person I’m probably spending about five to ten hours a week in my business so it’s not it’s not a super you know has probably spent about as much time as the average podcaster does doing their show and editing it but I had to get to that point it took a couple of years so I think that that’s the point where people have to realize that there is going to be a process to get there now the solution to that potentially is maybe instead of doing one house you go buy a portfolio so you go buy five or ten houses that are already operating we’ve had some people do that you know I bought three in the span of three months so that’s understandable as a way to do it and then the second part is I think there is merit in in finding someone maybe not me but someone like me that that’s figured this out and done it for a couple of years you know the average person that’s run a successful assisted living business a lot of times are either nurses or social workers they come and kind of come from a health care background they don’t understand construction and finance and all those things so there’s a real opportunity to take our two communities right the real estate syndication you know community and then the health care Canadian kind of marry them together you’re obviously an example of that and I think there’s some opportunity there so I talked about all the time that if you know had been running two three care homes for ten years and they want to grow and they don’t know how and so there may be an opportunity to marry those two things.
Buck: Let’s talk about exits because this is one of the things that I I kind of had a particular with with regard to the boutique side that I ultimately just stopped because it was an issue that I could not kind of get it. So I personally and again this is just me I don’t I don’t really like to specifically get involved with business activity unless I feel like there’s a way for me to exit with a significant multiple. Too much work in general and I’ve unfortunately been involved with way too much brick and mortar and have the scar tissue to prove it. But say you start something from scratch you might be better off buying something as you said because at least you have a track record but if you start something from scratch you take a single-family home and you convert it and it doesn’t work out the thing doesn’t work very well what do you have left? You’ve got a single-family home converted into a facility which we at that point you can’t really I mean you could but at the expense to turn it back into a single-family home would be very high. Again I’m just trying to go through some of the thought processes that somebody probably ought to be thinking about if they start to do this kind of thing. So what what about that I mean do you see the exits of very concerted the aspects of concern is failure and the lack of the or inability to dispose of that asset as something that is a lot more liquid which is a single-family home to address that.
Loe: So a couple things I mean I may not be the expert on how to convert assisted living facility back to a single-family home because I haven’t had to do that yet but I know I’ve thought about that for sure I mean when I did my first one I said okay if we do this deal and it goes bad and here’s all we’re gonna have to do maybe I don’t have to convert it maybe I just find a really large family that doesn’t want a garage maybe you know like family of ten it’s great house for you.
Buck: One of those showers where you know you could fit like three people in.
Loe: You know what we call that in real estate we call that future proofing its future proof now you can age in place. So I’ve thought about that but ultimately yeah I mean I think the goal is not to fail I mean I think if you do the deal right there’s enough margin here where even if you’re mean when I when I use the word margin what I tell people is that think about margin for error is what that means and you know if you have a 25 or 30% margin if you take some lumps along the way you can still have a profitable business so maybe the house instead of making $150,000 a year maybe it makes 70 that’s a pretty good investment on a million dollars for example. So I think that if you do it correctly and you and you underwrite the deal in the right way and you’re honest with yourself about what your strengths are as an entrepreneur then I think you can you can be very successful. As far as the exit multiple I think the business itself is gonna be worth between two and four X. I don’t think it’s as an individual house I think that the house is making a hundred thousand dollars a year you’re gonna be able to sell it for the real estate and then anywhere from two to four times what that business is making the exception to that might be if you’re selling ten or twelve houses or 15 houses and the total income is you know say 1.5 million 1.2 million then you may be able to sell it for a multiple because you have enough beds to have scaling and things like that there’s some software things that can be brought to the table there’s some efficiencies with those numbers. So I think that I think that the exit I think you’re right in the sense of the exit is it’s not a rosy exit and you’re never gonna get like an apartment deal where you’re gonna sell it for you know 20 times or 18 times net operating income you know that’s not that’s not what’s gonna happen but what you can have is you can have a thing that you can hold for ten or twelve or fifteen years it just produces ridiculous cash flow and there’s an element of investors that are less concerned about velocity than they are about simplicity. So if I do a deal if I do an apartment deal and you think about all the apartment deals that are retraded in five years right then I’m traded two or three times those investors have to then underwrite a new deal find a new opportunity put the money in do a 1031 do attendance in common. It’s a lot of crap and some people really want to set their investments and go and so for some people it’s like hey if I can get a 10 to 15 percent cash on cash return and I don’t think about it I just get my check every month there’s an element of that that’s attractive to them. And so I think this this investment really has to be geared toward a certain type of investor and again it all really kind of comes down to the operator I mean I had no experience in the business when I started and I think we’ve managed to manage to produce a really good operation I think I had some unique skills that I brought to the table and I look for that and people that want to be successful you know obviously I look for people that have certain skills that are gonna be successful the number one skill is can you sell can you market because ultimately you’re gonna be able to find someone that’s gonna take good care of your residents but you’ve got to be able to articulate how you’re unique and you got to be able to go out into a marketplace and convince people to trust you and move into your home and that’s that’s probably sometimes the biggest challenge people face.
Buck: Yeah so um yeah good you know I think that’s fair I mean I think two to four is kind of what I was thinking too. I also think well who do you sell it to he gotta find somebody you know who’s gonna want to pay that who’s gonna want to take that over now if you’re talking about portfolio who’s buying a portfolio are you seeing a lot of examples of people buying 15 20 these things in a portfolio?
Loe: Well so a couple things to think about. So assisted living started in 1983 most will don’t realize it’s a very new industry right it’s not that old of an industry and care homes have been around for a long long time right like several hundred years ago if you got sick you might go live with someone and they would take care of you right but in terms of professional care homes they’re only about twenty years old you know 20–25 years old so it’s kind of a new industry in that regard. What I will tell you is the medical community has very much made it clear they think outcomes are better in smaller environments that’s A. B I think clients have told us because you’ll go into a marketplace and you might see a place like Dallas it’s like eighty-eight percent occupied and I might be a hundred percent occupied here why am i twelve points over the number it’s because we have a unique selling proposition that people want. So that’s kind of an element of it too. So here’s what I think’s gonna happen. You can look at other asset classes that happen in single-family homes no we’ve had this discussion you know for a long time big money never came into single-family homes they couldn’t figure how to manage it you know Warren Buffett famously said I’d buy a hundred thousand houses like figure how to manage and in like two years later you know Blackrock or whatever went and bought a hundred thousand homes. So I think that there’s that part of it but the second piece is is that you mentioned the beginning of the show that that Chase said hey we know these big demographic changes are coming but they’re not here now I think in ten years I think people are gonna try to figure how to play in this space and so all my projections are holding things for about ten years because what’s gonna happen is about two or three years before the chickens come home to roost a lot of people with a lot of money are gonna say you know what this is the business for us and they’re gonna dump whatever asset they’re in and they’re gonna find ways to interact with that product some people are gonna go out and they’re gonna buy brookdale and something we’re gonna go out they’re gonna buy you know mid-level players something we’re gonna say you know what I want to get assets in Dallas and I think if I go buy these ten care homes in these amazing neighborhoods I can create a return on capital that’s attractive to me and I have access to capital that is very cheap I can put systems in place I can put software and I can add some efficiencies this operation so I can overpay for it. And I’ve seen that other businesses I’ll just one.
Buck: One thing I’ll just say is the Blackrock comparison I don’t know that I think that that’s a reasonable comparison given the fact that basically what they were doing is buying assets they were buying businesses and I think that’s an enormous difference.
Loe: Well remember if you go back and look at the history of them that they thought that and then they figured out like a whole crap we can’t manage these. So they had to go through that learning curve and so I agree that was the mistake they made they weren’t buying assets they were actually buying a business.
Buck: They thought it was assets from the get-go they were buying businesses they wouldn’t have done it.
Loe: So I mean you see consolidation and a lot of stuff in the funeral home business has been as consolidated the pharmacy business has consolidated so I you know there’s been a lot of consolidation in these any sort of demographic businesses obviously pharmacies you’ve seen it a lot where CVS has acquired a lot of stuff you’ve seen you know they’re almost there’s almost no no such thing as an independently owned funeral home anymore because a lot of the big national players have gone in and kept the name up but purchased them so I think there’s been a lot of consolidation and these sort of demographic based businesses that we’ve seen a lot of that.
Buck: So curious now in terms of the I was just reading your bio. You got some big projects coming up now right I mean are so are you shifting are you shifting to the larger projects or how is that working?
Loe: So yes kind of I don’t like you know 80 bed 90 bed facilities all under one roof so what I’m doing is I’m doing planned care home communities. So I believe in the model of care having small small houses with people in them but I also love the scaling of a big building and we talked about multiples earlier. So whereas a care home might trade it two or four times business you know an assisted living facility might trade it an eight percent cap rate which is considerably higher than that. And so what I’m doing is I’m actually buying raw land and developing a neighborhood and that neighborhood instead of having families in it have care homes each care home is independently license independently address and so what that allows you to do is allows you to have a luxury home a basic home dementia home if you want to get really cute you can have a parkinson’s home or a home for people with diabetes you can have sub demographics like you could maybe have a house that’s kosher you know it doesn’t matter what the whole point is you can have you can cater to what the community tells you it needs. And so we really like those projects because it’s kind of the marrying of large projects which have instant scale but also the outcomes that are better in care homes so similar to your you know if you think about your experience with your mother-in-law in Santa Barbara what if the house next door instead of being a dementia care facility was an assisted living facility? She could start there and then graduate to the memory care facility so that’s that’s the angle that we’re coming from so I agree with you for me the care home business never was the endgame it was the education to get to the endgame. I don’t know that I’ll ever be interested in buying a hundred or 200 bed facility that is just like everybody else. One of the ways that I might consider doing that would be just if we had better ratios so if we basically underwrote the deal to have the same types of ratios of caregivers for residents that I have in my existing business then maybe I would consider it but I think there’s some real challenges for people to walk down 100-yard hallways and eat with 40 or 50 people and there’s just a lot of you know there’s some people don’t want to be around a hundred people it’s just the fact you know there’s a lot of people that just don’t want to spend their day with forty other people and so these smaller environments offer something that’s very powerful in the marketplace the outcomes are better and so we’ve kind of married the two concepts together to allow us to solve your concerns and at the same time not sacrifice quality and outcomes.
Buck: Yeah it definitely sounds I think probably more what I would consider you know something that you know probably has a greater future in terms of evaluation etc. now they’re doing something that by the way in there’s a model in somewhere in Scandinavia isn’t there?
Loe: Yeah something like I mean Holland is really kind of on the cutting edge of dementia care so there’s a lot of stuff that comes there. Yeah they do a lot of interesting stuff over there this is an element of that but what it really is is it’s there’s a ton of companies that are doing this now. What I would suggest to you is is that I don’t think they started at the organic level of the business that I did because they they don’t understand what makes their business work. You ever see someone try to replicate something they don’t really understand and they just kind of mess up some core pieces you know so a few things we do that are kind of different. Number one our houses your architecturally designed to not have long hallways the cheapest thing you can do is build a rectangle right run a hallway down and have a door door door door door door door but at a certain point doesn’t matter if it’s small it’s when you’re in it it still feels like you’re in an institution still feels like you’re in a big building just kind of shrunk so we avoid that. The second thing is is that most of site plans that I’ve seen other people do is they put the parking in the center and the houses face each other so you kind of like you’re in an office park it doesn’t feel like a neighborhood. So what we do is we have the houses back up to each other like a traditional neighborhood would the houses face out and we run the road in a circle around them so when you drive up it looks like a regular neighborhood. The other thing we kind of do that’s a little bit different is we have an independent Sales and Leasing Center. So when you pull up the first thing you see is you see an opportunity to pull in go have a conversation so you’re not in an assisted living facility or a dementia care facility talking about mom or dad you’re in a professional setting to have a conversation get questions answered and then after we answer questions get a feel for what you need then we take you to the appropriate house. And if you ever tried to tour an assisted living facility it can be kind of chaotic and especially on these campuses where people might be all over campus it can be real challenging like yeah I go down to building five ask for Karen the tour process is kind of difficult. And so we’ve really tried to hone in the fact that people want to get their questions answered they want to be heard and they don’t necessary want to run all over campus to try to find the tour person and so we’ve kind of created us you know and it’s a heavy expense you know you’re gonna spend you know a few hundred thousand dollars to build that building but at the end of the day it makes your tour process so much better it makes the make sure success ratio and tour so much better it makes your ability to connect with the clients so much higher that we think it’s a no-brainer. So that’s that’s the kind of stuff that we’re doing that’s a little differently than that’s out there in the marketplace.
Buck: Sounds good man well good luck with that it sounds like sort of a better you know sort of a best of both worlds approach to that.
Loe: I had to I had to do the thing the first thing originally to be able to do this. I would if I try to do this as my first project the odds are I would make some of the same mistakes and so yeah no I totally understand where you’re coming from I don’t think that you’re incorrect with your assessment I just think at a certain point I might assign a different value to the education I might assign a different value to the process but the pain that I’ve undergone learning these lessons is is the reason why I’ll be successful in the bigger projects.
Buck: Right well you know I hear you’re a big fan of Rose so you know when you open up make sure I know and I’ll come in and bring you a bottle of nice Rose.
Buck: So how can we get a hold of you? What’s the website what’s the information?
Loe: Yeah so our website is the company’s called Sage Oak Assisted Living and Memory Care. So the website is thesageoak.com and my email address is [email protected]. And just a prom to pump a little bit you know people can reach out for anything so if you’re in Kansas and you’re looking for a place for your mom and you need advice feel free to call me I’ll try to connect you with a provider I have there and you know if you’re interested in more in the investment Avenue please let me know and and if you want to learn more about how to do this then I can connect you up some resources there too so I try to make myself available in a lot of different capacities if I can.
Buck: Sounds good Loe. Thanks for being on Wealth Formula Podcast.
Loe: Thanks doc.
Buck: We’ll be right back.