QUESTIONS?

CALL US: 703-319-2198


The Aging Revolution

Published on Jun 04, 2013 | Reverse Mortgage Retirement Planning Annuity Home Care

With 10,000 people retiring every day since 2004 that would hardly seem like a revolution. However, when you see Private Equity creating companies and catapulting into the Senior Assisted Living arena it’s a different dynamic. 

Private Equity often has first mover advantage when there is a large new undiscovered business opportunity. It’s a perfect example of the free market at its best. As an example, several recently formed Private Equity companies have cascaded into the residential real estate market and have aggregated thousands of residential properties into rental management companies.  

These companies have invested several billions dollars and have taken significant housing supply out of the market. An average investment of 15K is made with each property and then the properties are rented   The companies are then launched into the public stock market to drive further liquidity. A perfect example is Invitation Homes. This company will be coming public Spring 2014 with $4.5 billion in homes purchased.

The presence of Private Equity investment has gone a long way in solving the supply and demand imbalance in real estate markets nationwide and it has also taken thousands of undesirable homes off the market in some of the hardest hit market. These companies have succeeded in resurrecting balance in the market in less than two years where the government and other private sources have failed.

This same opportunity may hold true for Assisted Living. It is well known that the cost of Assisted Living is expensive. In home assisted living is estimated to cost around $4,000 per month depending on the level of care but more realistically it could easily escalate to $6,500 per month in our area. We know that, based on the number of aging people, the need is prevalent and the choice is to stay in their homes. The supply of affordable care versus the eventual demand could impair the system. Private Equity is now playing a role in the Southern United States investing and creating companies to address this need. We need supply to address demand so care can be delivered at affordable rates.

The final question is how people are going to pay for levels of required care as they age. In my opinion, the plan will be to preserve your principle savings and pay as much as you can with income first. To this point, we touched on annuities last month. Annuities return non-taxable investment and taxable earnings as income. Reverse Mortgages converted to annuity-like payments return tax-free income. Preserving home equity and annuitizing for life with a Reverse Mortgage may be a tool to help pay for various levels of Assisted Living for those that cannot otherwise afford it. 

It’s about a plan for money and quality of life through the process. If you have this, I am a strong believer that the free markets will ensure that the supply of affordable care will be available.  

 

Blogging from the front line.
George H. Omilan
President-CEO
NMLS#873983
 
If you like this blog please comment.

Recent Posts

Blog Tags

Reverse Mortgage HECM Reverse Mortgage Retirement Planning supplemental retirement income Seniors Retirement security Financial Planning Short Sales Age in Place Government insured mortgage lifetime income with a Reverse Traditional Mortgage Home Care Retirement income insecurity HECM for Purchase Long Term Care Jumbo Reverse Mortgage solutions for underwater properties home equity access reverse credit line Social Security Annuity Financial Assessments forgiven mortgage debt mortgage Inflation Specialized Forward Mortgages Mortgage Loan Process Eligibility for Reverse Mortgage Debt Mitigation FHA 55+ mortgage debt forgiveness act foreclosure cashflow VA LOAN Non QM HUD private label reverse mortgage Reverse to Purchase Mortgage Loan modification Investor Loans Real Estate Investment Loans self-employed borrower Jefferson Mortgage Group bank statement loan Housing Market investor financing No Doc Investor Loans VA Low Score Real Estate Market QM HECM Changes Interest Rates High-Value Homes LESA Medicare Mortgage Rates Sandwich Generation Reverse Mortgage Eligibility Low Credit Score manual underwrite Construction Loan Fed Real Estate Economy 2023 changes growth factor downsizing HELOC Hard Money Loan Lending Limit increase DSCR 2025 changes Non-recourse loan modify your loan with your lender mortgage debt relief act Mortgage Deliquency Fiscal Cliff Business Cash-flow HECM to Purchase Senior Advocate mortgage debt Diversification Estate Plan Senior Care Gray Divorce Jumbo Mortgage Loan Rentership Credit Score down to 500 Second Trust bankruptcy MIP Unrestricted Approval Principal Limit Factor success story Trump Commercial Real Estate 2021 Changes Debt Treasury Asset Qualifer FINRA Housing Prices Property-based loan occupancy requirements Asset Based Mortgage ATR Rule assisted living LLC Blanket Loan Seller Contribution Jumbo Reverse Second Trust Second Trust Prequalification Non-Qualifying Loan