Speaker 1
Good Saturday morning, everybody, and welcome to your next chapter of production of The Heights at Avery Heights, a one-of-a-kind senior living community centrally located near the most entertaining and historical spots in Connecticut. Folks, you know, it is never too late to grow and enjoy new realms of the mind and of the heart and your next chapter delves deep into these topics that will improve the way that we think about aging and senior living and the retirement years all together along with Siobhan Mattingly I’m Gary Byron. Siobhan good to see you. Good to see you. How are you this morning? I’m very good.

Speaker 1
What’s new? How was your week? What did you? I had a cold this past weekend.

Speaker 2
It is really hard to have a cold nowadays because I stayed home most of the weekend because you know you don’t want to be out and about even though people aren’t as like covid it rained all weekend

Speaker 1
so i guess if you’re going to have a cold exactly you want it out when the weather’s not the best

Speaker 2
yeah okay that’s so i stayed i hibernated all right because i was coughing and sneezing and

Speaker 1
boy yeah well you look great i mean you could never tell you had a cold yeah i feel much better

Speaker 2
much better i think the rest helped to be honest with you so it’s probably the best way to go the best medicine yes which new at the heights the heights is actually uh today actually at 10 45 We’re going to be having an open house. Nice. Yep.

Speaker 2
We have about almost 20 people coming. So we still have space. You can give me a call at 860-953-1201 and still reserve a spot.

Speaker 2
We’re going to be having a presentation on moving tips. And then we’re going to be having lunch. And then we’re going to have a tour and some good food and good fun.

Speaker 1
Every bit of that.

Speaker 2
Yeah.

Speaker 1
Sounds nice.

Speaker 2
Yeah. It’s going to be nice. People get a chance to kind of check us out and kind of low key.

Speaker 1
What would you say is the number one? This is a loaded question. I realize that. There’s so many questions that have to be added and need to be addressed and asked. What would you say, though, is number one on your list, on the list that people universally, you know, anybody that walks through the door that you know the question is going to be asked?

Speaker 2
It’s generally the cost. Yeah. You know, definitely the cost.

Speaker 2
Yeah. It just depends on where people are coming from. A lot of times when people have, you know, like we’ve been talking about the series we have here on if they have the finances, then that’s not.

Speaker 2
Generally, if they have the finances, the first question is about meals, about socialization, about activities, you know. But if it’s the other way, then it’s either one of those three questions or about payment is kind of the first way people go.

Speaker 1
Financial services.

Speaker 2
Yeah.

Speaker 1
Well, I ask that for a reason. Do you want to introduce our guest this morning?

Speaker 2
So this is the second part of our four-part series that we’re going to be having on paying for senior living care. We think this is very important because this is usually probably about 80% of the time this is the first question that’s asked. And so we want to answer that question, and we want to dive deeper, too, into the various ways that you can pay for senior living.

Speaker 2
And one of the folks we have on today has become one of my good friends, even though she’s in Virginia. Nowadays you can become friends with people virtually, which is great. This is the wonderful Karen Nelson.

Speaker 2
She’s the Executive Vice President of Customer Care at Second Act Financial Services, and she is going to tell us about bridge loans, which is always a tough, tough topic.

Speaker 1
Karen, good morning. Welcome to the show.

Speaker 3
Good morning. Thanks for the invitation. I appreciate it.

Speaker 1
We can’t wait to hear all about you and all about customer care and Second Act. Really, let’s start with your background. Tell us a little bit about yourself.

Speaker 3
So I have been in the senior living field for 30 plus years. If you could see my lovely face, you would think that I started when I was 12.

Speaker 2
This is true.

Speaker 3
I can attest that. I’ve been doing this a long, long time. I have a passion for seniors.

Speaker 3
I have been on the financial services end for probably about the last 10 to 12 years and have partnered with the CEO of Second Act Financial Services, a gentleman named Ilyas Papasavis, twice in my career. I love the man so much I came back a second time when he launched Second Act Financial Services. And we have been rocking and rolling since then, helping communities like Avery Heights be able to help seniors and their families when they’re trying to navigate that road of needing to tap into their home as their primary asset in order to fund being able to move into a community like the one at Avery Heights, which I have not had the pleasure of seeing it in person, but Siobhan and I have spent lots and lots of time talking about the community, and it just looks like one of the best of the best.

Speaker 3
So I’m really honored to be a partner with them and helping them serve the seniors and families that they serve in their community.

Speaker 1
That’s wonderful. Take it from me where I have been on their premises a couple of times and I can actually compare them to, I don’t know, what some would deem as competitors. Although really, they’re not really competitors because there’s really nothing that comes close to what Avery Heights is offering.

Speaker 1
And I mean that both internally and externally. You walk from their grounds, from their dwellings, to the service provided by the caregivers. I mean, they’re firing on all cylinders.

Speaker 1
But let’s go back to Second Act Financial Services. What kind of services does your company provide?

Speaker 3
So when we started the company, we kind of took a holistic view of what is it that seniors and their family members stumble with sometimes when they’re trying to navigate that next path to their retirement community or their assisted living community or independent or any of those senior living options. And we put together an offering that includes helping them if they’re looking at do they qualify for VA aid and attendance benefits. We help with home solutions that can go from helping them to find a realtor to staging to packing to moving to move management.

Speaker 3
We also partner with a provider that looks at long-term care insurance policies for them and tries to help navigate that. So those are kind of what I call our adjunct support services. Our primary support services involve being able to help a senior or family tap into the equity in their home by doing what I will call a hybrid home equity line of credit, a.k.a. a bridge loan, that allows them to tap into that equity, access the funds, put the house up for sale, have it actively listed for sale, and still be able to tap into the asset, the equity of the house, to be able to pay, in this case, for the monthly service and rent fees that they would need to pay to Avery Heights while they’re getting the home staged, while they’re figuring out what they’re going to do with their stuff, while they figure out who the best realtor is so that they can get the best price and not feel stressed and rushed while they’re doing it.

Speaker 1
All right. So you mentioned bridge loan. I’ve heard this term used in the past.

Speaker 1
I’m not quite exactly sure what it is. Are there different types of bridge loans? And if so, what are they?

Speaker 3
Well, so I akin us to what I will call a regular big bank. So if you were moving into a community like Avery Heights and you had a home that was worth, I don’t know, $400,000 and you wanted to tap into that, you could walk down the street to your local bank, Wells Fargo, Bank of America, pick whoever and say, I’d really like to get a home equity line of credit. the banks are like, okay, great, and they’re willing to talk to you about it.

Speaker 3
But when they ask, what are you going to use it for? And you say, I’m going to use it to move into Avery Heights and pay for my monthly fees there. And oh, by the way, I’m going to put my house up for sale and I’m going to sell it.

Speaker 3
And hopefully it will sell quickly. Normal banks don’t like that. And they don’t like it because a typical home equity line of credit has to be open for a certain period of time. And we know we’re part of a division of Liberty Savings Bank. And our bank knows that typically these loans are only open for between three and six months. Why? Because they get moved into the community, they get the home sold, and it closes in that period of time. Sometimes it’s open maybe six months, but that’s generally when, you know, If someone has said to us, well, you know, we need to put a new roof on the house or the kids are like, well, we need to really go in and do some upkeep and upgrading of the house so that we can get the best price for mom or dad.

Speaker 3
So there might be some varying variables, but in a typical home equity line of credit with a typical bank, they have terms and it takes a long time. So we’re really quick in trying to help these seniors and their families because we know how stressful it is. We look at the asset of the house predominantly.

Speaker 3
We can do these loans and decision them in within 24 to 48 hours. Definitely not something that you would see in a typical home equity line of credit that takes 35 to 40 days at a minimum to even try to get closed. We can fund these loans in 7 to 10 business days.

Speaker 3
Wow. So we understand usually there’s a sense of urgency about wanting to move forward with their commitment to the community. And we’re very flexible on helping them get that done as quickly as possible.

Speaker 3
We don’t have any limits either. So, for example, if somebody, and I had a gentleman the other day, he called me and said, Karen, you’re going to be mad at me. And I was like, why?

Speaker 3
And he said, well, because I sold my house and it’s going to close next month. And I said, that’s fantastic. Good for you.

Speaker 3
I’m so happy that you sold your home. He literally had the loan open for 60 days. That was it.

Speaker 3
And we don’t care. We’re okay with it. We know that the home is going to be listed.

Speaker 3
We know it’s going to be sold. And so we work with that senior. The other thing that makes it very different is our loans are interest-only loans.

Speaker 3
So that’s typically different from a home equity line of credit where, you know, in Avery Heights’ place, we would send the money every month to Avery Heights on behalf of the senior for whatever they’ve told us to send. Different from our regular home equity line of credit where you borrow whatever the amount is, $50,000, $100,000, they give it to you all at once, and then you’re obligated for paying back that loan in principal and interest. we only send the money that’s needed on a monthly basis when the house sells.

Speaker 3
Like in the case of this gentleman where his house sold in 60 days, we had set up a line of credit for $50,000. He only used $10,000 of the $50,000. So he only is paying back $10,000 when his house closes, and he’s only paid interest on those two small payments that we actually made on his behalf.

Speaker 3
I know it sounds a little bit complex. I’m trying to make it as clean, as easy as I can. But we’re very, very different than your typical home equity line of credit from a bank.

Speaker 1
No, and I appreciate you explaining how this works. But how do you qualify, though?

Speaker 3
So when I talk to folks first, we talk about what do they know, what the value of their house is. Most of them at least have a ballpark. If they don’t, we can always use, I always say, you know, let me look at it.

Speaker 3
I’ll look at Zillow and see what Zillow says. And then really it’s based on the equity in the house. We can, excuse me a minute, we can work with anybody that has a minimum of a 620 credit score.

Speaker 3
So it’s a minimum of a 620 credit score plus whatever the equity is in the house. And, of course, equity in the house means my house is worth $500,000 and I don’t owe anything, which means I have $500,000 in equity. Or my house is worth $500,000, but I still owe $100,000, which means the equity in my house is $400,000.

Speaker 3
So we can lend up to 75% of the equity in the house. And it’s pretty simplistic. Like our bank, our lending chaperones, a.k.a. our bankers, walk them through every step of the way they work.

Speaker 3
One other difference is they work with the same banker within our lending area from beginning to end. Again, I’m like a typical bank where you end up talking to four or five different people. It’s not always the same person.

Speaker 3
Again, adds to the layer of confusion and complexity. they deal with one person from beginning to end from the time we do the application whether we take it over the phone whether we help them do it online to the point where we’re ready to go to the closing and we send somebody out to their home or to their place of their choice that’s how easy it is like last week we actually met a senior at a starbucks because that’s where he wanted to go close he wanted to go close and have coffee so that’s where we went and met him it’s pretty pretty

Speaker 1
easy for us to help somebody. Why choose, though, a bridge loan? It sounds like there’s many different options. Are there more advantages for the bridge loan than the other options?

Speaker 3
Well, the other, the things that I talked about, about, you know, thinking that, and I talked to a lot of seniors and they’ll say, well, you know, I banked at my local credit union for 25 years, why can’t I go there? And for the reasons that I just cited are generally why they end up coming to us because typically they don’t want the home to be listed for sale. They want the home to be occupied. They want the money to be used for something that, you know, isn’t just a short term loan of a few months. And so I always say to folks, you know, talk to your local bank. If you have a relationship with somebody, absolutely talk to them. And if they can help you, and that’s the best solution, that’s what we want for you. But what we find, and I will tell you a story again that happened last month was, I talked to a daughter that was trying to help mom and dad move into a community. We talked and she was ready to do the application. She came back to me and she said, oh, mom forgot to tell me that she had an open home equity line of credit with blankety bank. And I said, Oh, okay, well, maybe you can just either up the funds or open it back up or do whatever. And that would be easier. And she called me back in a week. And she said, the muckety muck that I’m trying to have to go through now is crazy. They’re not going to be able to close the loan by the end of the month, they’re going to they said that it’s going to take 45 days. I don’t have that much time, you know, mom and dad need to get into the community. And so because we’re solely focused on working in the senior living space, it’s all we do. And we understand the white glove necessity of helping to take care of this most vulnerable population and their support family with the utmost integrity and respect, that coupled with how we do it makes

Speaker 1
us different than everybody else. Karen, is there any type of risk, though, that’s associated with

Speaker 3
this type of loan? Not really. And that’s because we’re basing the loan based on the equity of the house, right? So when this house closes and they go to the settlement table, if you will, on closing date where they transfer title to the new owner, we get paid off just like a normal loan against the property, right? So little to no risk at all for the senior or the family as long as they’ve got the house priced appropriately and it’s going to sell in a certain amount of time.

Speaker 3
One of the questions we always get asked is, well, how long can we have this open? What happens if It goes longer than six months for whatever reason. The loan is a five-year loan.

Speaker 3
And frankly, we’ve never had anybody go five years. We’ve had a couple that have gone a year, but those were kind of mitigating circumstances. One involved a house that was a historic home.

Speaker 3
And so the folks that ultimately ended up buying it was a special kind of person, right, that was willing to go through the hula hoops that the city imposed on what they had to do in order to maintain this historic home. And another one was a piece of property with a home in northern Virginia where it was a 34-acre piece of property and a home on another five acres. And the holdup was there was a developer that wanted to buy it.

Speaker 3
And so it took longer to make all of those things happen. But typically, you know, the loans are only open. It’s on average probably four months.

Speaker 3
I got you.

Speaker 1
Folks, you are listening to your next chapter, Senior Living, along with Siobhan Mattingly. I’m Gary Byron. Our guest this morning, Karen Nelson.

Speaker 1
She’s with Second Act Financial. She’s the Executive Vice President of Customer Care. You can check out their website online at www.secondact.com.

Speaker 1
I’ll give you that website and phone number and all that stuff more towards the end of the show. How much can you borrow, though? Do you have a limit?

Speaker 1
Go ahead.

Speaker 3
Yeah, the limit is 75% of the equity in your house.

Speaker 1
Okay.

Speaker 3
So if you own the house free and clear, we can lend up to 75% of that. So if you have a home equity line of credit that’s open, or sometimes we run into where somebody’s gone and gotten a reverse mortgage, or if they hold a small first on it, we generally roll those into that line, that new bridge loan that we do. That makes sense. But in total, we can lend up to 75% of the value of the home.

Speaker 1
All right. Now, what if a person’s got bad credit? What would occur then?

Speaker 3
Well, bad credit would be somebody that has credit below $620. So I can count on my one hand and still have a couple fingers left the number of times that happens. I mean, the seniors generally all have excellent credit of $720 or above.

Speaker 3
Every once in a while, we run into somebody that might be as low as 650, but we rarely run into anybody because they were frugal people. If you think about the people that grew up and that are the age that are moving into these retirement communities, you know, they were very fastidious about saving and about spending and about not having tons of credit. and they were very fastidious about paying their bills.

Speaker 3
I mean, most of them, sometimes we run into a funny situation where they don’t have a lot of credit because they never used a lot of credit. And we have to figure out, okay, well, how do we get around that? But we generally don’t run into the senior that has a credit score of less than 620.

Speaker 1
All right, let me ask you this then. Someone’s hearing this right now and they want to get started with the process. What’s the first step you take?

Speaker 3
Well, they can reach out to me. They can go to secondact.com, as you said. They can call me directly.

Speaker 3
I’m the executive vice president of customer care. There’s lots of times, and by the way, I will tell you up front, I am not the banker. So I am not going to be the person that takes the application over the phone.

Speaker 3
But I’m the person that can answer all of their what-if questions and how-to questions. And I’m certainly happy to do that. And they can reach me through the 888-999-7372 number.

Speaker 3
That comes directly to me. And I’m happy to answer any and all questions. And then, you know, depending on our conversation, I can help shepherd them towards either our lending chaperones or if they need assistance with one of our other services that we provide, I can help them get to the right people.

Speaker 1
All right. Let’s say someone gets approved for the loan. What’s, you know, so they’re in the process. They’ve already gotten approved for the loan. What would be their next step?

Speaker 3
So the banking, our banking folks have, you know, a typical list of these are the things we’re going to need from you. They collect all of that information, which, by the way, is minimal compared to a normal home equity line of credit. Once they’re approved, then there’s closing documents that go back and forth that they have to sign off on, authorization documents.

Speaker 3
and then we will set up a time and date that is convenient for them and fits within the time frame to want to have the funds wired to the community. And we set up a closing time. We send somebody out from the local market to actually execute those closing documents with them.

Speaker 3
We work with Avery Heights to get the wire. Well, we already have that. We already have Avery Heights wire transfer information.

Speaker 3
And based on what they have instructed us to do, we will wire transfer the money directly to Avery’s Heights. If somebody says, well, what happens if I need, I don’t know, $50,000 for Avery’s Heights, but I need another $25,000 because I need to put a roof on or I need to go fix plumbing or I need to do whatever, We can divide it out and send some of the money, give the senior access to money directly so that they can fix what they need to fix. And then with Avery Heights, on a monthly basis, because it’s rental, we would send money every month to Avery Heights directly.

Speaker 1
I got you. I want to bring Siobhan back into this. I can ask this question for either of you.

Speaker 1
It’s the final question I have for you because I know we’re a little short on time here. Either of you have any tips for folks that are interested in this type of loan to pay for senior living? What would you?

Speaker 2
I think for me, the main thing is apply. Make the phone call. One of the biggest things I see with seniors and their loved ones is they’re like, well, it’s never going to work.

Speaker 2
Oh, it’s not going to. And I understand that skepticism, but make the phone calls because this is an amazing resource. And what I love about what Karen provides is not just for the bridge loan.

Speaker 2
They have other resources. So if they don’t work out, they can send them to other places, you know, in terms of veteran services, in terms of long-term care. So it’s kind of a full-service organization that can help you find a way to pay for your senior living.

Speaker 2
So I would just say make that phone call. Don’t suppose you’re going to get the no. Don’t assume you’re going to get the no. Wait to get the no. I would think that would be my biggest tip. Karen?

Speaker 3
Yeah, you know, I think that, you know, in all of the planning process for making the decision to move into a community and get on to their what we call their next journey or their next step, part of it on the scumbling block side is how do I pay for this and how do I make all of this happen? How do I make all these moving pieces go in the same direction at the same time? And it’s like they know what they want to do.

Speaker 3
They just don’t know the path. And so sometimes they end up delaying. Sometimes they just, you know, they just get overwhelmed. What we’re here to do is to help them not be stressed in that process and, again, answer any of their questions. But if they don’t make contact and we don’t have the conversation, I can’t help them.

Speaker 3
and then they aren’t able to take that next step on their journey to their best retirement living that they could possibly have. So, you know, I echo what Siobhan said is if they make the contact with us, there’s no obligation to have a conversation with me. I had four conversations yesterday, two with families that were trying to help their parents, two with seniors that were doing it themselves.

Speaker 3
Lovely conversations, gave them information to chew on. And, you know, all of them said, let me chew on it, and then we’ll get back to you about it. I tickle.

Speaker 3
I just follow back up and say, is there anything else I can help you with? There’s no obligation to talk to us at all. We’re here to try to help them navigate.

Speaker 1
I’ve got to wrap this up. Let me give you a website once again. It’s www.secondact.com.

Speaker 1
The toll-free number is 888-999-7372. I want to thank our guest, who is the Executive Vice President of Customer Care for Second Act, Karen Nelson. Folks, you have been listening to the latest edition of your next chapter, Senior Living.

Speaker 1
Next week, we’re going to continue in our four-part series on paying for senior living care. Our guest will be Family Solutions for Care, and the topic will be long-term care insurance. You do not want to miss this opportunity to learn more about this amazing benefit and how to use it.

Speaker 1
Now, to learn more about Avery Heights, please contact Siobhan at 860-953-1201 or connect online at averyheights.org. For Siobhan Mattingly, I’m Gary Byron. Thank you so much for listening to your next chapter, Senior Living.

Speaker 1
Until next weekend, have a good one, everybody. So long.