Now or Never: Long-Term Care Strategy with Kosta Yepifantsev

Myths and Misconceptions: Selling Your Home to Transition into Long-Term Care with Ben Rao

October 11, 2022 Kosta Yepifantsev Season 1 Episode 5
Myths and Misconceptions: Selling Your Home to Transition into Long-Term Care with Ben Rao
Now or Never: Long-Term Care Strategy with Kosta Yepifantsev
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Now or Never: Long-Term Care Strategy with Kosta Yepifantsev
Myths and Misconceptions: Selling Your Home to Transition into Long-Term Care with Ben Rao
Oct 11, 2022 Season 1 Episode 5
Kosta Yepifantsev

Join Kosta and his guest: Ben Rao, Co-Founder of Mom’s House, Best-Selling Author of Paying for Long-Term Care: The Essential Guide to Understanding and Funding Senior Care and Senior Living Industry Advocate.

Featured everywhere from CBS, NBC and Fox, Ben’s primary mission is to alleviate the emotional and financial struggle that families face when unexpectedly confronted with the reality of transitioning into senior care.

Today we’re talking about the Myths and Misconceptions About Selling Your Home to Transition into Long-Term Care.

In this episode: Mom’s House, how it works, and how it's reinventing the long-term care transition process, how the long-term care industry will evolve in the next decade and how a potential housing recession will impact seniors transitioning into long-term care.

Watch this episode on YouTube:
https://www.youtube.com/watch?v=xN6V3Gg8v8Q

Find out more about Ben Rao and Mom's House:
https://momshouse.com/

Buy Ben's Book on Amazon:
https://www.amazon.com/Paying-Long-Term-Care-Essential-Understanding/dp/1954363001

Find out more about Kosta Yepifantsev:
http://kostayepifantsev.com/

Show Notes Transcript

Join Kosta and his guest: Ben Rao, Co-Founder of Mom’s House, Best-Selling Author of Paying for Long-Term Care: The Essential Guide to Understanding and Funding Senior Care and Senior Living Industry Advocate.

Featured everywhere from CBS, NBC and Fox, Ben’s primary mission is to alleviate the emotional and financial struggle that families face when unexpectedly confronted with the reality of transitioning into senior care.

Today we’re talking about the Myths and Misconceptions About Selling Your Home to Transition into Long-Term Care.

In this episode: Mom’s House, how it works, and how it's reinventing the long-term care transition process, how the long-term care industry will evolve in the next decade and how a potential housing recession will impact seniors transitioning into long-term care.

Watch this episode on YouTube:
https://www.youtube.com/watch?v=xN6V3Gg8v8Q

Find out more about Ben Rao and Mom's House:
https://momshouse.com/

Buy Ben's Book on Amazon:
https://www.amazon.com/Paying-Long-Term-Care-Essential-Understanding/dp/1954363001

Find out more about Kosta Yepifantsev:
http://kostayepifantsev.com/

Ben Rao:

It's all the stuff that says lifetime of memories. It's the salt and pepper shakers that mom collected with dad for 60 years on every one of those trips they took in the RV. And you have shelves of them in the dining room in the kitchen. And in the basement. There's 12 more boxes or totes filled with them, right? And these are the things that we're grappling with as as humans about like these all equal memories.

Caroline Moore:

Welcome to now our never Long Term Care strategy with Kosta yep offensive, a podcast for all those seeking answers and solutions in the long term care space. This podcast is designed to create resources, start conversations and bring awareness to the industry that will inevitably impact all Americans. Here's your host, Kosta Yep, offensive.

Kosta Yepifantsev:

Hey, y'all, this is Kosta. And today I'm here with my guest, Ben Rao, co founder of mom's house, Best Selling Author of paying for long term care, The Essential Guide to Understanding and funding senior care and Senior Living advocate featured everywhere from CBS, NBC and Fox. Ben's primary mission is to alleviate the emotional and financial struggle that families face when unexpectedly confronted with the reality of transitioning into Senior Care. Today, we're discussing the myths and misconceptions about selling your home to transition into long term care. So Ben, I want to set the scene, what does the traditional transition process look like for someone selling their home and moving into long term care?

Ben Rao:

Thank you for having me on your show, I appreciate that. And, you know, it's great to figure out different ways that we can get the message out to help families. As part of the reason why I wrote the book, it just seemed like so many people need so much help. So let's let's look at their traditional path. So today, our families aren't having the conversations they should be having, they don't want to talk about that you know, what level of care or if mom's gonna need care at some point. So a lot of things go unanswered. Until we have this emergency where mom falls for the second time where we noticed that from Fourth of July to Thanksgiving, there's a really big change in mom's health. But whether it's cognitive or whether it's physical, but there's something different, and we're noticing it. And so now it's We're pressed sometimes with with a lot of urgency because of mom fell, and she's being discharged from a hospital to go to skilled nursing, or maybe even assisted living. And the family is trying to figure out all the different moving parts, they don't want to make mistakes. And many times mom doesn't have the money to pay for care. But what she does have is a lot of equity in the house. Sometimes it's the forever home, right? It's the forever home, dad died eight years ago, mom's been doing the best she can living in the house to keep it up. It's not been maintained. There's a lot of things happening. It's filled with a lifetime and memories and stuff from the shed to the garage to the basement. And all these things, you know, still have the kids rooms, all those things are all happening, right. And so now, now the family, the adult children that might be in their 60s or 70s, who are spread all over the United States, on average over 400 miles away are trying to figure out what we're supposed to do what what I don't want to make a mistake, this is a really stressful, important decision. They've got all these different people coming at them from the care community, that's, you know, telling them, oh my gosh, this is going to cost three, four or 510 $1,000. If you're looking at you know, something like memory care, the adult child, there's usually one that's responsible that stayed behind and they're stuck holding the bag, so to say of, of taking care of mom and being that number one, and then you and I are brothers, and we're questioning everything our sister's doing and all the things she's doing about mom's care, because we're not there locally. I dealt with this with my stepfather, Tom, seven, eight years ago now. And I was driving back and forth from Kansas City where I live now to Louisville where I grew up, and you've got all these different dynamics happening. And then the family's like, oh my gosh, it costs so much money. And so now they're trying to figure it out in the house is a huge component of somebody's wealth. And today and traditionally it's been this this is amazing Senior Living is pushing their customers away. I liken it to think of a car dealership. And when you go to buy a new car many times you have a car and the dealer wants to buy your used car so they can sell you a new car. This is the same thing that's happening in senior living someone is trading their forever home for a new a new house a new place to live and so but the Senior Living industry doesn't buy the used car, they push their they push their families away and say go find a real estate agents. And when you get it sold back when you have your money so you can move in. Here's where the stressor really is. Is that that traditional route of real estate agent. There's plenty of times that's a great fit, but many times it's not the best fit the family in this city. situation, no matter what the condition of the house for a lot of reasons. So the the agent says, clean the house out. Step number one. So now you and I and sis have to figure out what we're going to do with all this stuff, mom's downsizing from 2500 square feet, and all the stuff that she's had for 85 years to, you know, 150 square feet. That's the first step. So that adds time, effort stress, then it's if you'll do these three things, and fix the house up with these three things, you'll get top dollar, suppose consumers were like, Oh, my gosh, I want to get the most money I can that makes sense. So now I've got to get some bids for the roof, and I've got to get the hot water replaced. And, and they said I should, I should replace this shower. And all of this is going to make my house sell faster. And I'm going to get the most money I can, what most. So the next step is, after all that happens, which could take months, the house gets listed and it gets sold. And then the family has to pay a 6% commission to an agent, which can be a really big amount of money. I mean, if you're looking at a three or $400,000 house, I mean that can be 20 $25,000 plus 1000s of dollars in closing costs. And this has been the route that senior living has had and families have known nothing, that there weren't any other options. And we said there's got to be a better way to do this, there's got to be a way to take the stress from the family. And that's why we built mom's house. And that's, that's part of those misconceptions, we're gonna we're gonna go through some of those. So I don't want to get too detailed each of those steps but that's what's happening today. And it's crazy because the family can end up with about the same amount of money in three or four weeks then going the route with all that stress effort putting money out of pocket borrowing money doing repairs, paying commissions and do that three to four, maybe five months later. And we've been in a really hot real estate market you know, as you know, you live in Nashville, which was smokin hot, everybody's leaving California go to, to go to Nashville and are selling, you know, $2 million homes and overpaying for that 750 $1,000 home in Nashville. And it's it's crazy market but it is slowing down and slowing down. Some of the hottest markets started to stall a little bit. And some of the markets where they're not impacted with such high and low demands are starting to slow down with days on market. And the concern is, is if you've been around senior living at all, for the last 12 years or consumer, you've know nothing but an amazingly hot real estate market, right? The hottest on fire, we're put a sign in the yard and people are going to overpay and they don't care about what the condition of the house is. That's going to be a thing of the past as we start to trickle into I don't want to say recession, but a decline days on market. Interest rates are going up inflation impacting the cost of goods to be able to do rehabs. All those things put a lot of pressure on the family that they don't realize and Senior Living doesn't know. This is a big wave of people coming out that if it slows down to sell a house, it slows down getting mom moved into care, whether that's moving into assisted living or memory care or into in home health care, right? We got to keep mom safe. If mom has a fall, we can keep mom safe, then that's that we know what those statistics look like as far as from those falls or things that mom's you know, life life span is going to drop off.

Kosta Yepifantsev:

Could you start at like step one of how mom's house works, and kind of take us through from start to finish what the process looks like. And I want you to really focus on telling our audience how you're reinventing the long term care transition process. Because, as I know, and I'm sure a lot of people that have been through the process, understand it is filled with pitfalls and confusion. A lot of a lot of heartache. And it's also early. It really is and you know and like you were saying the house being kind of the highest, the most valuable asset that most people have. Why don't more people consider the equity in a home for long term care expenses?

Ben Rao:

I think I think they do that the challenge is just that they don't know anything else besides what a traditional route is of what I just described earlier. You know, that transition for a family member. There's a lot of emotional resistance, in addition to that financial resistance. And what we found out was very quickly that the the house is a hurdle and the stuff, it's all the stuff. It's this lifetime of memories. It's the salt and pepper shakers that mom collected with dad for 60 years on every one of those trips they took in the RV, and you have shelves of them in the dining room in the kitchen. And in the basement. There's 12 more boxes or totes filled with them, right. And these are the things that we're grappling with as as humans about like these all equal memories and so you If you have something really, really amazing and valuable and really special, sometimes this little hack here, sometimes taking a photo of that, and having it framed nicely to put it in mom's room, if she's transitioning into into senior living is one way to still be able to have that memory, you know, and still be able to connect to those things when you don't have all the room. But so at mom's house, what we did, we wanted to try to eliminate all these different hurdles or objections or stressors that the senior has. Because we know that when senior gets to a healthier care, and once they after they get over that hurdle of resistance of moving into it, let's just say assisted living. Now there's medication management, and nutrition and socialization. And they realize, oh, my gosh, I wish I'd done this six months ago, I didn't know what I was missing. But in their mind, they're getting over this emotional hurdle of like, this is the fourth quarter, right? This is the final step for me. And you're not going to put me in a home. Right, that's the, you're not going to put me in that home and that they're being left behind and thrown aside and not valued. And so I mean, that's all really scary stuff. Now, I have seen some amazing assisted living places that I will, I'm ready to go to now they're so cool. Right? I saw one that was on Long Island, recently that was on the end of Long Island and very expensive, by the way. But they had a beach on one side that like in a cliff that sat with chairs to look out over. And they did independent living and assisted and memory care and skilled nursing. But I mean, there are people that are in the senior living industry doing an amazing job to to provide like a really great service product experience for seniors transitioning into care

Kosta Yepifantsev:

not to get off topic, but like, how much does an assisted living facility like that cost a month?

Ben Rao:

You know what it could be all over all over the place. If you talk about, you know, you could have something that could be 10 or $12,000 or more a month. And then you also can have something that's 3000. I mean, you're talking about Medicaid at that point, right? That's a Medicaid community. So step one, when the family started to look at this, there's figuring out how they're going to pay for it. They don't know about a lot of things. They, you know, that was part of the reason, again, why I wrote the book was that families don't understand all the different options there are to pay for care. A lot of people that are veterans don't realize there's something called VA and attendance. And if you're, if you served in an active war, it didn't have to go to that war, you could actually you could be in Oklahoma, working at the base. And if it's an active war, you still count that we were there. And there's I'm really cutting through a lot of the details here. But that VA in attendance may give you a few$1,000 a month of a benefit to thank you for serving our country. And it's also what's really sad is that it doesn't get a lot of times it doesn't get announced to or the spouses don't know about it. And this extends to the spouses as long as they didn't get remarried. And again, you need to talk to a VA benefits company. We've got lots of relationships with great companies that help people to do those kinds of that kind of paperwork to help them to, to qualify. So but that's, that's a great example of something that gets overlooked. You know, if dad died eight years ago, spouse has no idea not even to know to ask about anything related to VA when dad served in Korea, right. And so you know, that they're not asking these questions. And so just trying to get your bearings, if I could give any advice to families, it would be have the conversation sooner versus later about the finances, put it on a spreadsheet, put a list of what they have, understanding what they have, if you have a house, getting that house into a trust, five years earlier, as exempt from the Medicaid stuff, again, not giving any advice here, you need to talk to a Medicaid expert. But then again, that's there's a look back period of five years, if they look back five years, and that house was in the Trust for seven years, they're not going to count that as an asset. You know, so there's things like this, that families just don't know, people can convert life insurance policies, you know, obviously, the house is a huge piece of that. And that's what that's what we work with, you know, our goal is to go in, and how do we just eliminate any distress or hurdles for families and give them the right information, to understand that this is a really good option. And it's nothing more than option, there's no obligation, but we will come out and and meet with you, one of our Transition Specialists meet with you face to face in your home and come out and give you an option to be able to buy the house as is you don't have to fix it up. It doesn't matter. The basements flooded three times. It doesn't matter if there's a foundation issue. It doesn't matter if it's a $1.5 million home. And somebody's just values time over money and they don't want to deal with any of it. Because the other thing you can do is help with the stuff. So now when we get into stuff conversation, families think it's going to be easy to get through the stuff. That's one of the misconceptions, right? You and I say we're going to show up on a weekend and you and I insist We're going to clean it out, we're gonna get all taken care of. And we open up a photo album. And what happens, we lose three hours. And now it's Saturday at noon, and now we ordered a pizza. And now it's 130. And we've made very little progress on what we're doing. And you know, and so families think this is this is that misconception, we can do this in a weekend, we can do it quick. We can paint in a weekend, we can do all these things. And then they realize, it takes a lot longer. I don't know if you've ever had any honey dues, or anything that you want to do around your house, you say, I'm gonna get it done this weekend, and then ends up stretching over two or three weekends, because you run out of time get busy, distracted, you know, real life stuff.

Kosta Yepifantsev:

Yeah. And so Ben, what systems are you putting in place to ensure the best outcomes for clients? And also, how does that differ from the traditional methods.

Ben Rao:

So the difference is, we are focused specifically in the senior living industry, we are a tool or service for families, and the senior living industry. We have a training center, that we do a certification and training where people have to come in for three full days they go through that they exit out of that as a senior Transition Specialists, we have an ethics agreement that they sign and agree to, we have ongoing continuing education, where we have eight to nine zoom calls a month, that are training and education, we talk and teach a lot about empathy. And what's happening at that flash point with a family, not necessarily the real estate piece of that, because this is really about the sensitivity needed to help the family and help and understand where they're really going through and where they're coming from.

Kosta Yepifantsev:

Right. Right. So there's an important statistic that I think we need to address. And it kind of ties in with how many families you see kind of day in and day out that are going through the struggles. So 70% of Americans over the age of 65 will access the long term care market. Yeah, what's the best way to prepare for the nearly inevitable event of requiring care?

Ben Rao:

I would say the number one thing is communication. Okay, it's communication with the other with your children, with your siblings, with your parents, with your loved ones, to have those conversations. In the paying for long term care book, I put together a roadmap or a guy just to say follow these steps, right? They're not they're not complicated, but it's like, you've got to have these conversations. And there's a lot of downloads and cheat sheets that are on that on the paying for Long Term Care website, but to download, say, how do I figure out what my assets are, you have to know what assets you have to know what you can pay for, right? So if you go look at these beautiful if you go look at these beautiful communities, and it's $10,000 a month, and you can afford $4,000 That's a terrible feeling or a takeaway. That's another reason why we built mom's house, you see a lot of the eye buyer stuff with open door and open house and, and Zillow and all these companies these I buyers that go out and say we'll buy your house and give you a quote right now, the problem and the challenge were that we're kind of the anti buyer, because we're in the hugs and kisses business, right? They're in a transactional business to say, here's your offer. And then when they start getting into a due diligence period, they're offered many times as being dropped down, there was a huge lawsuit recently, you know, about some predatorial practices, when we're in to buy a house, we're going to buy it, we're going to give you here's, here's what we're buying it for, it's going to be as is, there's not going to be changes to that. That's what we're buying it for. And we can close in three weeks. So then you can get mom moved into care, we've many times had to do letters to say, hey, we're in the process of buying this house, we've closed the house in as little as nine days because it was an emergency and mom needed to get the care quickly. So that's the difference. Because because there's no agents involved. There's no time in none of those things. There's no clean out, there's no fix up, none of that, we now get mom moved into care much faster. And while that other stuffs going on, you know, we talked about that families, you know, the misconception is they can go out and find a good contractor. Good luck. And a lot of contractors going to 50% down and then you never hear from them again. And maybe the families borrow money that you know, they think that a bridge loan is maybe the only option out there to be able to get in it's not necessarily the case, you don't necessarily need a bridge loan bridge loan fits well, in a lot of cases from a standpoint of we need to get money in and we can get mom moved in right away while we're having to deal with some other things, you know, with the family. So I don't want to knock a bridge loan by any means. I just it's families think that may be the only option and it's not.

Kosta Yepifantsev:

How in the world did we get to a place and we're going to talk about how the industry is going to evolve in the next 10 years. But I want to focus on first how we got here. How did we as an industry or as a society or as a country however you want to friend get to a place to where there are no resources but The most elaborate and interesting and I mean, honestly valuable assets and programs to pay for something that is essentially an inevitability. Because this problem, obviously, it's much more extreme now in terms of people aging, and the baby boomer population aging, but in the past people have always been aging. So how is it now that we don't have any of the resources unless people like yourself can develop a product and an accompany and have sort of the touchstone to be able to execute it effectively. Because if it's not for you, most of the times, people are completely on their own.

Ben Rao:

They are. And that's, there's a lot to unpack there. I mean, I think some of it is, we've got this huge baby boomers coming at us. And I think next year, or the year after, we're kind of like, all those baby boomers are hitting that age of 80. I think that is, and so it's, you know, that's a huge wave. And that's, that's, that's part of the pressure, people are living longer, we're having healthier lifestyles, we're not smoking or exercising or eating better, you know. So that's we have, that life expectancy is growing. I think culturally, there's a big difference, too. I mean, I think that if you, if you look in another countries, you look, they look at a senior as an elder or something that's like, I don't want to say that's a positive piece. And many times that seniors is living in with the family, you know, go to Asia or India, they're not putting mom into assisted living, they're not putting, you know, mom are living there. And in those cultures, a lot of times we're living older, you know, and I've no idea if this is true, I just this is anecdotally like, that those cultures are, are have a higher life expectancy, they're eating healthier, they're, they're living healthier, it's just different have different lifestyle. Now, you know, we're spoiled as Americans, to have all our all our great resources and things and the life that we live. And, you know, I think assisted living, and, you know, independent living and memory care, and these are all things that we need, and have to have, and we don't really have a choice, but we don't have enough beds, you know, that there's not going to be enough beds, the demand, I just sat through the net Conference, which is an economist was speaking about, about the, all these different pressures we're gonna have right? Now at least amount of people working, birth rates are dropping way down, we've got you know, now we're getting the baby boomers up to this point of 80 years old. And it's just not going to be enough, because this was about like, should people build more senior living, and in the economy and, and mortgage rates, and all these things are all putting this weird pressure, where the real weird time for big money to come in and to invest in, in senior living. And so, you know, I think all that's going to impact, you start seeing things like residential assisted living, I'm leaving this afternoon, I'm flying out to Phoenix, I'm out for two days at a conference is the it's the national residential assisted living conference. These are people that are actually buying houses and creating assisted living. But it may be it's only six bedrooms. And so it's more down to, you know, grassroots and much more. You know, you said it earlier group home, or, you know, depending on which state you're in, they call them different things, right. And so there's just like seven or 800 people at this conference. And many of these people either own them or considering it, a lot of people look at it and think that's a real estate play when they're really getting into the care business. And so there's sort of things around that. But I think it's things like that, I'm seeing a lot of stuff about tiny homes, people dropping tiny homes, on their property, and that mom can live in and not necessarily live in under the same roof. And understand that, that's far extreme, I'll take as my mother, who's 75. And she worked a non for profit and senior space for, you know, 40 years or 50 years. So she has a long term care policy that's like she way over pays for which I'm like, Yay, go mom. But she also lives in a building that has an elevator, and that there's other people there. And it's these are their condos. And, you know, she thinks, Okay, I think at some point, I'll probably just get a reverse mortgage and just burn through all my equity, not because of the urgency, because that's just a way for her to do that. I'm like, that's great, Mom, it's your equity. I'm not expecting anything, you go use it to go take trips to England, or wherever you want to go or do whatever you want to do, or, you know, put new get new furniture or a new sliding glass door, whatever you want to do that makes your life better. What do

Kosta Yepifantsev:

you say to people that, you know, since the 20th century, we've kind of had this this topic of inheritance. And obviously, there is no inheritance for people that need to access long term care because they typically spend all that money. You know, paying for care. And so, you know, talk a little bit about that. And also I want to hear your thoughts and you touched on it briefly. Really, about what care looks like in the next 10 years, and how we're going to be able to meet that supply and demand imbalance that you were describing?

Ben Rao:

Well, I think I think is, you know, you know, in home health care in different services for people to be able to age in place and stay in their home is a huge strategy on how we, how we, how we help to solve this problem, right, you know, for relying on the government, or for, you know, Medicaid and Medicare programs to help us with our health, you know, what does that mean, when we don't have a lot of people working, and that, you know, 20% of population is over 65 20% of the population is under a team. And we need 20% of the population to take care of those people. And now we've only got 40%. Left. That's, that's creating all the money in taxes and all the things that we need. I mean, it's a it's a big problem. And there's a lot of really smart people trying to fix that. And I'm encouraged by technology, and even the feels like COVID even forced some technology and some innovation. In the senior space. As far as there's a lot of really interesting sensor type programs, meaning you could put something in the home, and it's in it's watching patterns, and there's AI behind it. And it's trying to figure out this is mom's pattern. Normally, she's up every day between 705 and 720. Why is mom not out of bed as much? Or what's happening or moisture sensors in the bed for UI and and those kinds of things? And there's the fridge sensors, did it open? Did it close? Mom, are you eating? Yes, yeah, I had milk and cereal this morning. Well, the fridge didn't know. But you know, there's medication, sensors on medication. And so it's like, I think there's a lot of technology in home, that's going to help us to figure this out alongside with, you know, we physical places for people to live.

Kosta Yepifantsev:

But do you think that technology is the answer these app because you're in the industry, you're around it, you understand the challenges, and you see some of the solutions that you talked about the residential homes? That's essentially what I do in Tennessee? can people afford it? No. Is it funded primarily by Medicaid? Yes, the majority of the people, I think, can't afford to access the long term care space and pay out of pocket for it at the same time without having something like mom's house, to be able to sort of peel back that equity. Yeah,

Ben Rao:

it's I mean, if you look at it, really, we're just we're moving from point A to point B, right? We're, we're living our forever home, and we're moving into another home. And so it's just again, it's we're just transferring that equity over to help pay for the house and the care. The nice thing about, you know, things like assisted living, or the residential assisted living is that, you know, you're still you've got your rent component, which you have in your home, but you don't have any maintenance, you don't have any of those things to worry about, you've got the care to keep mom safe, you've got that socialization, where a lot of them is, you know, I have, you know, a game room and some activities and other things and, and a chef that maybe can tailor a little bit better to the tastes and the people that are that are there. And so those are really appealing, in my mind. But that's that's for me, versus you know, the big box and the big box have more amenities, they have more things a more activity. So it kind of depends on a oh, they have the they have a beauty salon,

Kosta Yepifantsev:

can you can you speak on. And we talked about it briefly before the episode started about how you can use your services and also age in place without having to go to any assisted living or nursing home or anything. But please talk on that, because I think that that's such an interesting component.

Ben Rao:

Yeah Kosta, thank you for bringing that back up, because I did overlook that. So as we know, you know, strategy is possibly aging in place, and that's using your home health, home health care resources in house. And so if that's a consideration, which it is for a lot of people because they're not ready to move or don't want to move, right, it could be they're looking, they're planning, they're thinking, they could be in denial. And so when they're when they're looking through these things, we have the ability to come out and buy the house, just like you described earlier, enclose in a number of weeks, but then let mom stay in the house. So we call that our sell and stay. You know, from a really simplistic perspective, we're buying the house and then Mom is now renting or she's a resident to live in the house. But she doesn't have to move all our stuffs there. But then we unlocked that equity. And it can be structured a lot of different ways. Mom may pay rent, she may not pay rent, it may be reflected. It's included for some amount of time. So I don't want to get into get into the weeds as far as the structure. But the idea is that we can get Mom money to help pay for care. And mom can stay in our house for some period of time.

Kosta Yepifantsev:

Can we touch on the recession just briefly, because I know you brought it up a little bit when we were talking and you did say how expensive care is. And obviously everybody has to pay for care unless they're living with family members or our loved ones, or I guess somebody that's a friend that's, you know, willing to provide the care for free. You recently spoke on the 700 Club podcast about the current housing recession, and how this impacts older Americans and their families. What is this recession mean, for those entering the transition process today?

Ben Rao:

Well, I think and I'd like to reword it, and not necessarily call a recession, I don't want to be, like, Ben Rayo said, we're in a recession. But I mean, I'm just looking at what economists are saying and what they're doing. And we are in a slowdown, there's no denying that there's no denying the housing market slowing down in that house, as we've talked about is the biggest component to help people pay for care. So this is in when the market slows, we still provide a tremendous amount of value. And back in 2008, if you remember, when we had that housing crash, the houses that weren't selling, were the houses that needed updating. And most of the time mom's house needs updating it is grandma clean, right? She's got avocado stove, avocado fresh, it's all perfect. You know, all the Chrome is in the kick plates. Now, it looks brand new, she made it she didn't didn't peel the plastic off of it right. And so like it's in perfect shape, it's just not, I'm not going to move into a house as a consumer and want to keep that right. That cycled like eight years ago. And now it's back out again, right, it's so these are the things that we can provide value to. So when we buy the house, we know that we can do things I talked to one of the misconceptions is that families think that if they go and replace and do all this work, that they're going to get 100% plus of their money back. So what I mean by that is, if you spend $10,000, to do some of the things to fix up the house to make it more valuable. On average, you're only going to get about $6,000 of value back. So the family is putting $10,000 in going through the stress fixing it up. And then they're only getting $6,000 of value out of it, meaning they lost $4,000. And this is not this is not something that I made up. cost versus value.com is a 20 years of gathering data on remodeling by city by zip code and city. So it's a fun exercise to go put your own zip code in or your own city and go by that and go see it with inflation. And some of the changes just in the last two years, we've seen it go from mid 60s In some markets down to 52%. So now, mom's only getting half of her money back. And so and that's only $10,000, if you're putting if you go and put a roof and you go do these other things. The they may be getting you over the hurdle of getting the house sold, but you're not getting all your money back and you're adding time and effort. And if you had to go borrow that money credit card, you know, loan from a from a friend or whatever that is, now you're paying interest on losing money, and that's compounding, and then time and now you're paying a 6% commission on the higher sale price. And you start to put all that together. And that's why it makes so much sense to just at least consider to say, Hey, what are my options to have somebody just take hit the easy button and take care of all this in three weeks for me, and they're going to help with

Kosta Yepifantsev:

the stuff. So Ben, you don't think that a recession is going to severely impact people's ability to have money to pay for long term care,

Ben Rao:

I actually do think it's going to impact them in a couple of different ways. And I'll circle back on why though that we're we're talking about why we fix that. One is we've had this we've had this crazy real estate market, right and everybody's houses are are appreciating appreciating appreciating that more equity, more equity, more equity, which is great, which means they have more money to pay for care. But now we're seeing that kind of drop off or flatten out. And it's becoming harder to sell the house. And now families may have read finance at some point because of they have more equity and they can go pull some money out for other things. Or that the family for some reason thinks they have a lot more money. And so they're making decisions to move into certain levels of care or certain places based on Well, the house is worth 400. And really now the market it's only worth 365 Doesn't sound like a lot. But$25,000 There'll be another four or five months. We you know, I'm trying to find some more. I just posted this on weird LinkedIn this morning. I'm asking some of the other colleagues in the senior living industry about Hey, who's got any updated white papers or information about that lifespan? Because usually it's about two and a half years. Right? It's about two and a half years is the average band for a senior when they move into a level of care and that changes depending on whether we're talking assisted living or memory care or skilled nursing. So I don't want to get into those details but on average, so you know we start doing that the family is doing the morbid math say So how much money are we going to need for mom for these next 28 months, right? And they're starting to do the math, and it's like, oh, my gosh, this is a lot of money. My mother has$45,000 in pension may only have$80,000 equity in our house. Now, after she goes through that, and the first year, year and a half, how does mom pay for care? And we know, you know, that's the whole purpose of having Medicaid there to help people that, that don't have the resources to make sure that we're taking care of our seniors. But it's, yeah, it's scary. And so that that decline in value means there's less money for them to have for care. But what I will say is that, as mom's house, there's still value for us to buy the house, kind of no matter where it is in the market. And so getting them unlocked, and making sure they're not overspending on things, like commissions, and those upgrades that they're not going to get all their money back is, is really we're trying to educate and $87 billion industry about like, Hey, guys, I know it's been done like this for last 40 to 50 years, stop pushing your customers away. And let's put some resources in the hands of families that can reduce their stress and help them through this transition.

Kosta Yepifantsev:

I want to ask, before we wrap, what's the biggest lesson that you've learned from helping hundreds of families across the United States during such a vulnerable stage of life.

Ben Rao:

I think the biggest lesson in really what we tried to teach and make sure our transition starts to understand, I think, is having patience. We're all we all live in this world that we want everything instantly we want it now. And that these families aren't in the same timelines as that we are a care community, a transition specialist, you know, even you know, the traditional real estate agent, our transition, especially these families have a lot of decisions. And this is like we weren't even we weren't even talking about this six months ago. And now COSTA You and I are trying to figure out where we're going to put mom for the last part of her life. You know, so it's like just having some some empathy to really understand where the family is coming from, and the level of stress because we all still have all the other regular stuff going on our life, right? The family soccer practices, my job, you know, fortunately, I've been self employed for a long time, I was able to get in the car, and take calls and drive to Louisville, eight hours on a Friday and be there Friday night. And so that was easy for me to do that. But a lot of people, most people don't have that don't have that luxury to be able to do that. And so all this stress, and then trying to get a house ready to sell it and try to do all these things. And not even knowing free to make a mistake that can be paralyzing for families, and just having some patience with families, I think is probably the biggest lesson, you got to get out of like, hey, what's in it for them? And where are they at? Not? What am I tryingto accomplish?

Kosta Yepifantsev:

And Ben, I will tell you, we speak to a lot of people on this show in the long term care space. And it's always refreshing to see somebody that's taken another unique approach to solving this problem. Because I feel like it's necessary for all of us to be kind of rowing and pulling in the same direction, because it's a gargantuan problem. And if we're if we're not, if we're not working together, we'll never solve it. And that's one

Ben Rao:

of the things I love about the Senior Living industry. Everybody's so collaborative. You know, we're all working together to help families and surround what we call we call the adult child daughter, Judy, you know, affectionately. You know, what do we do to help daughter Judy, what are we doing to help with the, with the, with the senior? And what do we do those resources. So we've just compiling compiling nationally, resources that, that we don't necessarily provide the service. But if somebody needs legal help, we can connect them to elder law attorney. We have national agreements with most of the placement agents all over the country. And so if somebody, you know, says I need help to figure out what's the best care community, for me, that's not our lane. But we're going to we're gonna introduce them to one to a placement agent that does it for a living that we know we can trust, they're going to take care of the family, they're going to help them find that best place for their next home.

Kosta Yepifantsev:

So Ben, we always like to end the show with a call to action. What's your best advice for someone entering the long term care industry as a patient, a caregiver, or industry professional or

Ben Rao:

this could back up really make this self serving and say that they need to get a copy of they need to get a copy of this right, there you go. And I say that, and I say it genuinely because I meet people in senior living that don't understand this process, and they don't understand anything out of their small section of where they are right. You know, that's That's why care communities are referring people to mom's house because that's not their lane. They understand this piece of it. In this guide is a great guide for somebody that's new to senior living that's coming in as a professional. That is a family that has somebody over the age of 65 Live. This is a great planning and conversation and a tool. People said yet, Ben said I had to ask those are on the bad guy, right. That's why the adult child was asking about having these conversations, you know, for adult children, and understanding this is where they're going next. And if we can really have these conversations and get people talking, so that book helps adult child that looks helps the senior to understand what's going on. And it's great for the senior living industry professionals. And a lot of people look at this and give me input and help to put that together. It took me almost nine months to get it kind of from start to finish and get it published. But you can find that on Amazon.

Kosta Yepifantsev:

And tell me the name of the book one more time before we wrap up paying for long term care by Ben Rao. Fantastic. So Ben, listen, I really appreciate you coming on. This has been a refreshing such a rewarding conversation. Thank you very much. And I wish you the best of luck and maybe we can connect next time you're in Nashville

Ben Rao:

For sure. Thanks a lot.

Caroline Moore:

Thank you for joining us on this episode of now our never Long-Term Care Strategy with Kosta Yepifantsev if you enjoyed listening and you want to hear more, make sure you subscribe on Apple podcast, Spotify or wherever you find your podcasts. Leave us a review or better yet, share this episode with a friend. Now we're never Long-Term Care strategy with Kosta Yepifantsev is a Kosta Yepifantsev production. Today's episode was written and produced by Morgan Franklin production assistants by Mike Franklin. Want to find out more about Kosta visit us at kostayepifantsev.com.

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