JF2553: Scaling Assisted Living with Wade Micoley #SkillsetSunday

When a hometown friend asked Wade Micoley to invest in a multimillion-dollar nursing home, he agreed without hesitation. On today’s #SkillsetSunday, we’re talking with Wade about how he got his start in the assisted living sector. We dive into the research and planning he did to make his first venture a huge success, and how he did it again three more times in different locations. 

 

Wade Micoley Real Estate Background: 

  • 30+ years of experience as a broker and top agent
  • Owns several nursing homes, a residential construction company, and helped start a very large regional bank
  • Based in Green Bay, WI
  • Say hi to him at: www.realtyhive.com

 

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TRANSCRIPTION

Ash Patel: Hello, Best Ever listeners, welcome to the Best Real Estate Investing Advice Ever Show. I’m Ash Patel and I’m with today’s guest, Wade Micoley. Wade is joining us from Green Bay, Wisconsin. He has over 30 years of experience as a broker and a top agent. Wade also owns several nursing homes, a residential construction company, and he helped start a regional bank.

Wade, thank you for joining us, and how are you today?

Wade Micoley: Great. Thank you so much for having me.

Ash Patel: It’s our pleasure. Before we get started, can you tell us a little bit more about your background and what you’re focused on now?

Wade Micoley: Yeah, real estate has been very good for me; long-time not only agent/broker, but investor in many projects, and still do that to this day. So it’s always been interesting to me, because real estate is one of those things where someone without any professional background, in a sense, can learn those skills, and real estate is a place where there is no ceiling. Your ceiling is what you determine it is. There’s no one that can stop you from buying a bunch of properties, creating millions and millions of dollars of not only revenue, but net worth as you go along the way, and then that opens up other opportunities. So opportunities to start developments, opportunities to start assisted living nursing homes, like you said, and even banks.

Ash Patel: Incredible. So tell me about nursing homes, you own several of them. How did that happen?

Wade Micoley: Again, that goes back to the more you’re out there, the more exposure you get, the more opportunities you get.  As long as you always keep your eyes and ears open. So I had a friend that was running a facility from high school, and she had called me up and said, “I want to buy this place,” and I said, “Okay, great, we can help you, show you how to do that, help you with lining up the financing etc.” And basically, it got to the point where they just decided they didn’t want to take that risk or didn’t feel comfortable with the millions of dollars it was going to take. So I said, “Well, I’ll tell you what – why don’t I do it, and I’ll make you a minority partner and you can make money when we sell the project and you get paid to run it.” So that is how it started, which means you have to learn an entirely new business, an entirely new strategy… How do people become tenants? Just lots and lots of details with that… And it was a huge success for us, just a massive success. So we decided we were going to build another one in another city.

I remember putting up this multimillion-dollar building, looking at it going, “Boy, I sure hope we’re right.” Because we had no tenants; no tenants for this massive building. And we were right. Our projections were right, our analyses were very conservative, and they were correct. And that led to a third campus, and now a fourth one that we’re just under construction right now.

Ash Patel: Wade, I’m going to see if I heard this correctly… You invested in multimillion-dollar nursing home because a friend of yours who was in high school wanted to run it.

Wade Micoley: Yeah, that’s exactly right. But there was a lot of research behind that. We didn’t just walk into it and get lucky. We really did the research on how the demographics were done for a facility like this. And one thing – I cannot tell you how powerful this advice would be if I was doing it again today… Don’t be afraid to reach out to people that know a lot more than you do. And that’s exactly what we did. We drove over and met some gentlemen and said, “Look, we’re never going to compete with you. We’re small fish in a big pond. Would you mind sharing with us, how do you pick a location?” And they pretty much laid out their plan to us. And we quickly took their numbers and made them more conservative to double, to be correct on their advice, which they were spot on. And we use that method today still in picking locations and building facilities.

Ash Patel: That is great advice. It says here you’ve also started a regional bank.

Wade Micoley: Yes.

Ash Patel: And I’m going to take a wild guess on this. Is this because you want it to get finance easier, and dealing with traditional banks was a bit difficult?

Wade Micoley: Well, yes and no, except once you become a board member, there are no favors at all, as it’s a highly regulated institution. But again, that was another one of those opportunities, where I had a banker that I used quite a bit – and I’ll never forget, he called me up one day and said, “Wade, you need to come and meet me for lunch tomorrow.” And I’m thinking, “Oh, my God, what went wrong?” We sat down and he said, “I’m going to leave the bank, I’m going to start a bank. Here’s what it’s going to take, this is how we’re going to do it. This is what we’re going to do with it.” And I said, “Yeah, I’m in, let’s do it.” [unintelligible [00:05:40].04] told me who the other players were; they were all very prominent real estate and business people in the community.

But even the assisted living nursing homes and the banking industry – it’s all about the people. You can have the best idea in the world but if you don’t have really good, talented, dedicated people behind that idea, it’s going to be maybe successful, but probably not. Most likely not. So everything has always been about the people that are associated with that. I was on the board for about 12 years, and that bank today has just—I don’t even know how many locations. Location’s in multiple states; it’s about a $7 billion publicly traded bank now.

Ash Patel: That’s incredible. And then a residential construction company.

Wade Micoley: Yeah, I did that in the — it’s probably about 12-14 years ago, and just was dealing with a lot of builders that I felt, “Well, they don’t really care about the clients.” And of course, some of them did, but not the way we thought they should.

So we started a company, started really small and built it up; now we’re doing about $18 million a year in revenue. And we have created hundreds and hundreds of lots that we build on. Right now it’s like the golden time, because the market is so unbelievably hot, you can’t even build fast enough. So yeah, it’s been very good.

But again, I couldn’t do all of that without really great people. I have such good people that help build these businesses. And then of course, along the way, what you do is you make them part of that. So they get part of that opportunity. They go to work every day, work really hard and handle all kinds of hard problems, and they should be rewarded for that in the end.

Break: [07:24] to [09:25]

Ash Patel: Out of all the things that you’ve done, what one industry would you recommend people start out in?

Wade Micoley: Well, I’ve started in real estate. And what I like about real estate so much is that anybody can really do it. Rich Dad Poor Dad was written for everyone. Anyone can take the advice from that book and buy real estate. When money is easy, you have to be the most cautious, because those financing banks or whatever, they will turn on people in a second when times are hard. And it’s not even necessarily because they want to, it’s because they’re being regulated; the regulators are putting a lot of pressure on the bank to make your portfolio perform, as an example. Don’t get overleveraged—key, key, key. I saw that happen to so many people in the downturn, that they just got way overleveraged.

And I think the reason why I say real estate also is because you’re using other people’s money to be able to make profits. Now, a lot of things have to go right, and in my estimation, you have to do it really big to make serious money. If you really want this to be your mainstay of your income, you’re not going to do that with a fourplex, you’re not going to do that with a duplex or a couple of houses. You have to get into bigger projects, and sometimes it takes a while to work into bigger projects, so that you’re comfortable to do that. But the quicker you can get to the bigger stuff, the better it’s going to be from a profit standpoint.

Ash Patel: Wade, my gut tells me you’re working on a couple crazy things now. What are you working on now that you didn’t write down?

Wade Micoley: Well, I have a company called Realty Hive, and Realty Hive is two product lines. One is to help sellers get more activity on their properties. So if you had an investor – let’s say, they had a big office building and they wanted to sell it; they would maybe hire a local agent, that agent would do their normal marketing stuff. But what we do is we take those properties and put them on a platform at a global level. And we are working literally with sellers from all over the globe right now, marketing those properties; Belize, Africa, Canada, all over the United States. And we have banks that come to us and put their properties on our platform. So if you have people looking for deal sources, it can be a good site to look for deal sources. We’ve just put a property on from a bank in Chicago, and it’s a commercial office complex. Those are the best deals you can find, because they’re not going to give it away like people think. But it is absolutely the best deal in town when you’re buying it from that lending institution. Because they’re in a position where they have to sell it, and they need to sell it because of the pressure that’s being put on them by the regulators. So if you find those deals, they are good deals.

Ash Patel: Wade, how’s that different than Crexi, LoopNet, all the other competitors?

Wade Micoley: Yeah, they basically are companies—it’s a good source to look for properties from a seller’s standpoint. From a buyer’s standpoint it’s good, because you want to look at all the sites and look at all the information. But from a seller’s standpoint, those sites don’t advertise properties. They basically are like a warehouse that anybody can put their property on. And then you have to pay to upgrade and all that kind of stuff, to be able to see the best deals, which is kind of a smoke and mirrors thing. But it’s really a site that warehouses inventory. The difference is what we’re doing is — in fact, if you go to our site, and you look at what the first thing it says, it says, “Connecting the world’s motivated buyers and sellers,” because for a property to come on to our site, it has to be somebody that really wants to sell> They’re not testing the market, they’re not saying, “Well, if I could get $2 million, I’ll think about it.” This is a format that we’re using to promote the saying, “If you’re looking for the best deals, this site has some of the best deals out there.”

So we actually go out and market that, and market those properties. And the one in Chicago, I forget the numbers, but as an example, it would be something like this – we have a property that’s appraised at a million dollars, it’s listed on the site for 800, and we have a suggested opening offer of 600. So that tells the buyer between 600 and 800, this property is going to sell in the next 60 days. Now, it’s a matter of who’s going to give them the most in the next 60 days. It may be 601, it may be 799, but that property is going to sell in that period of time.

Ash Patel: And is that all auction format?

Wade Micoley: It is. I will tell you a little quick story about that. I did auctions for banks in 38 states in the downturn, and then got awarded a contract with the FDIC to sell out properties that [unintelligible [00:14:19].22] properties for them on our platform. That was the old school way of doing it. And the problem with the old school way of doing it is there’s lots of smoke and mirrors and little tricks that are being used, like companies bidding up their own properties and all kinds of crap that we don’t want to get involved with.

The difference of what we’re doing is we’re saying, “If a date is 60 days away, if a buyer makes an offer on day one and the bank likes it, it’s over.” They’ll end it right there. So you don’t have to go to a certain date, and you don’t have to sign up. You don’t have to put all these huge amounts of money in escrow that you have struggled to get back if you don’t get the property. You can make an offer on our site, the date hits our site, and if they will not take the number you give them, they will come back and tell you the number in which they’ll [unintelligible [00:15:07].02]. So it’s almost like an accelerated process. And from a seller’s standpoint, nobody pays us anything unless the property sells.

Ash Patel: Is this commercial and residential, or just commercial?

Wade Micoley: Yes, commercial land and residential. But there’s a lot of commercial on there.

Break: [15:24] to [18:27]

Ash Patel: Incredible. Wade, what is your best real estate investing advice ever?

Wade Micoley: Oh boy! Be patient, I’ve made more money being patient than I can ever even imagine. We’re excited sometimes to do deals and get into that deal, and once you get a little of that going, the very first next step to me is start to learn how to be patient. And the best way to be patient is to have lots of deal flow. It’s hard to be patient if you’re only looking at one property a month. But if you’re analyzing and you’re really good at analyzing properties, and you’re really good at understanding tenant improvements and credits of tenants, and you’re really good at all those fundamentals, and you get a lot of deal flow going, you get to be more patient. And patience always makes more money. And [unintelligible [00:19:16].26] of that.

Ash Patel: That’s a great advice. Yeah. Give us one example.

Wade Micoley: I’ve done a lot of developments for our construction company. And when you start to see land price, especially in these times, they’re just going higher and higher and higher. That’s going to end. And about six months ago – because I’m still in the middle of this deal right now – I had someone come to me with a really nice piece of land that wanted to sell it and I said, “You have to give me a number,” and they didn’t want to, and “Make us an offer.” And I just dragged my heels and played it really slow, because I knew all the players in that marketplace. Because it was a big, big project, they probably weren’t going to pull the trigger on the whole thing. And I said, “Go out and talk to all these people. In fact, here’s all their names. These are all players, go talk to all of them… Because I know they wouldn’t take the whole thing down. And then come back to me and I’ll tell you my number on the whole thing. But I don’t want to be first, because I’d rather be last. And you go learn the market value of your property, so to speak.” And they did that and they came back to me and I made an offer on the whole thing significantly less than I thought I could probably flip it for today. And that one project will generate, I’m sure, $10 million, between land and construction and all that.

Ash Patel: That’s an incredible example. Wade, are you ready for the Lightning Round?

Wade Micoley: I am. Yes, go ahead.

Ash Patel: Let’s do it. Wade, what’s the best ever book you’ve recently read?

Wade Micoley: Oh, I read so many books. Boy, I don’t know if I’ve got a best one. I read a lot about self-improvement, and in a sense, it’s a very selfish reasons why I do it… Because I want to be a top performer in what I do. And that takes mental, that takes — learning patience is a good example. So I’m trying to think of a name the one I just read a month ago that I really, really liked, and it’s not coming to me.

Ash Patel: That’s okay.

Wade Micoley: I will email it to you. I will email it to you.

Ash Patel: Okay, perfect. We’ll put it in the show notes.

Wade Micoley: Yeah.

Ash Patel: Wade, what’s the best ever way you like to give back?

Wade Micoley: Because we have the assisted living facilities, and within those [unintelligible [00:21:23].16] the memory care. So my wife started a thing called Forget Me Not, which raises money for Alzheimer’s awareness. And there are so many things — as a family, if you have to go through that, there’s a lot that you can learn about what that person is going through, because it’s a very confusing and scary time for that person. And it can be a frustrating time for the people around them, because “Why aren’t you remembering that now?” and that stuff. So we started this whole thing called Forget Me Not, which is all about awareness and education of Alzheimer’s.

Ash Patel: And Wade, how can the Best Ever listeners reach out to you?

Wade Micoley: Well, I’ll give you my email, it’s wtm@realtyhive.com; that is typically the best way. Of course, on LinkedIn, all that stuff in social media… But I’m still an email guy, and I’m responding to all the emails that come in to me; that’s probably the best way. Otherwise on our site, realtyhive.com, too.

Ash Patel: Wade, thank you for being on our show and sharing a lot of great advice. You’ve got some varied experiences that you’ve helped share some of your lessons from. So again, we thank you. Best Ever listeners, thanks for joining us, have a best ever day.

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