She Researched Car Washes, Laundromats and Self-Storage. Then She Discovered California Residential Care.
Share
RCCS | A founder's perspective on residential care investment
She Researched Car Washes, Laundromats and Self-Storage. Then She Discovered California Residential Care.
What happens when an investor compares familiar industries with a business she has never operated? A conversation I recently had raised that question and opened the door to something worth discussing: California's Adult Residential Facilities, Residential Care Facilities for the Elderly, and the operational partnerships that can support their owners.
By Marky Ramone Richmond Pascua (Marky Pascua)
Founder & CEO, The Rosenthal Care Group | Rosenthal Community Care Services
The conversation that inspired this article
She Had Done Her Homework. Residential Care Wasn't Where Her Research Started.
I recently met with an investor who had done the kind of research I appreciate. She wasn't simply asking which business was popular. She had been looking into entirely different industries, comparing the opportunities available to someone willing to put capital to work.
She had researched car washes. She looked into laundromats. She studied self-storage and other traditional business models. These are recognizable investments: you can visit the location, observe customer demand, estimate operating costs, and imagine what a professional manager might do on your behalf.
Then we discussed something very different: California residential care.
More specifically, our conversation explored Adult Residential Facilities (ARFs), Residential Care Facilities for the Elderly (RCFEs), and what higher-support programs could look like from an investor's perspective. We talked about a four-resident Level 6 ARF and a small RCFE participating in California's Assisted Living Waiver (ALW).
She had approached the conversation as an investor, not a caregiver. Her research into other businesses made our discussion interesting because she was naturally thinking about revenue, costs, management, and the relationship between an owner's money and an operator's responsibilities.
And that's where the topic became bigger than one investor meeting.
What if the business you've been researching for months isn't in the industry you expected?
I'm not suggesting residential care automatically outperforms car washes, laundromats, or self-storage. The costs, financing, risks, real estate exposure, and operational demands differ. I am suggesting that prospective investors can broaden their research by understanding an industry they may have overlooked.
My name is Marky Pascua. My professional background includes mortgage lending, business analysis, workforce planning, operational oversight, and customer experience. Today, through The Rosenthal Care Group and Rosenthal Community Care Services (RCCS), my husband and business partner, Kelvin Justo Garcia, and I work in the California residential care industry.
One thing I've learned is that strong financial projections deserve strong operational scrutiny. In this article, I want to explain the opportunity, the responsibilities, and a management structure that investors may not realize is available.
01 / Looking beyond traditional investments
Why Residential Care Belongs in a Serious Investment Conversation
Investors researching a laundromat typically investigate machine acquisition, utilities, maintenance, local competition, and customer volume. A car wash introduces equipment, chemicals, water, staffing, and real estate. Self-storage demands attention to occupancy, pricing, security, and debt service.
Residential care belongs in its own category. Here, the product isn't a machine cycle or a storage unit. The licensed business provides care and supervision to people whose needs must be appropriately assessed and met, sometimes 24 hours a day.
Who needs the service?
Research the population, location, eligibility requirements, referral pathways, and competition. A published reimbursement rate is not proof that residents will be placed in your particular home.
Who delivers the care?
Qualified administrators, trained direct-care staff, staffing coverage, resident assessments, supplies, and responsive supervision determine whether the business can operate as planned.
What happens before revenue?
Property readiness, licensing, hiring, program approval, insurance, startup reserves, and the occupancy ramp all affect the time between investment and sustainable operations.
Unlike some businesses where the physical asset is the principal operating system, residential care is heavily dependent on people, policies, and compliance. That doesn't make it uninvestable. It means investors need to model it differently.
02 / The two care models
First, Understand What You're Actually Considering
ARF: A Residential Care Business
An Adult Residential Facility provides nonmedical care and supervision for eligible adults. A regional-center-vendorized Level 6 home is a specialized operating model with substantial staffing and program responsibilities. The facility needs applicable CDSS licensing, and the provider must meet the Regional Center's vendorization requirements.
RCFE: Assisted Living in a Residential Setting
An RCFE primarily serves older adults who need nonmedical care and supervision. An eligible RCFE may separately apply to participate in California's Medi-Cal Assisted Living Waiver. Tier 5 is a waiver reimbursement tier associated with an eligible participant's assessed care needs, not a general CDSS RCFE license classification.
In the Inland Empire, a prospective ARF operator may investigate Inland Regional Center's residential service model. An RCFE owner may evaluate a private-pay strategy, ALW participation where eligible, or a carefully designed combination. Each path involves its own criteria, timing, and financial assumptions.
There is no automatic approval sequence that turns a purchased house into a fully occupied Level 6 ARF or ALW-participating RCFE. In particular, DDS explains that vendorization does not guarantee referrals or placements. Likewise, DHCS requires separate enrollment for facilities seeking to participate in ALW. [1] [2]
03 / An investor's favorite question
Now Let's Talk About the Numbers That Started the Conversation
Investors often want the top-line number first. That's reasonable. The mistake is stopping there.
California publishes reimbursement information that provides useful starting points for financial modeling. Below are two illustrative full-occupancy examples. They are deliberately constructed using specific published references and clearly stated assumptions. Neither represents an investor's projected profit, approved individual rate, or a promise of collections.
| Illustrative assumption | Four-resident Level 6 ARF | Six-resident RCFE with Tier 5 ALW participants |
|---|---|---|
| Reference used | DDS January 2026 Inland rate model for a staff-operated, four-or-fewer-bed Level 6 adult residential facility. | DHCS 2026 maximum payable Tier 5 assisted-living services rate, $270.80 per eligible resident per day. |
| Illustrative service amount | $11,842.41 per resident per month in the cited Inland model. | $270.80 × 30 days = $8,124 per eligible resident in a 30-day month. |
| Room-and-board illustration | $1,444.07 per resident per month shown as the January 2026 SSI/SSP allowance in the DDS model. | $1,400 per resident per month assumed only for this illustration. ALW does not pay room and board; actual resident payments and applicable limits must be verified. |
| Full-occupancy gross illustration |
$53,145.92/month 4 × ($11,842.41 + $1,444.07) |
$57,144/month 6 × ($8,124 + $1,400) |
| What has NOT been subtracted | Caregiver payroll, administrator costs, benefits, food, property, transportation, insurance, professional services, FMS fees, debt, and other costs. | The same expense categories, with a different staffing plan, acuity mix, care requirements, and enrollment conditions. |
Read before relying on these figures: The ARF amount is a January 2026 published rate-model illustration, not a verified September 2026 contract rate for a specific facility. DDS's September 2026 rates-only files distinguish base rates from QIP components, which may have conditions. An actual ARF budget must use the applicable current regional-center rate and identify which components are collectible. The ALW example assumes six people assessed and authorized at Tier 5 for all 30 days, an enrolled eligible facility, billable services, and separate actual room-and-board payments. Those conditions cannot be assumed. See official rate references [3], [4] and [5].
A $50,000-plus gross revenue illustration can be interesting. A credible operating budget determines what it actually means.
It is particularly important for higher-support services to account for staffing coverage. The cited January 2026 Inland Level 6 model includes 279 weekly staff hours excluding the administrator. That is a rate-model assumption, not a universal legal staffing requirement that applies identically to every facility. Your approved program design, resident needs, and applicable regulations must drive the actual plan. [4]
Consider one vacancy. In the illustrative ARF model, moving from four to three residents removes roughly one-fourth of the modeled gross monthly revenue, even though many staffing and property expenses may remain. The six-resident ALW example has the same vulnerability: an unfilled bed, a different authorized tier, or interrupted billable service changes receipts.
This is precisely why I do not want investors to confuse revenue potential with an actual return on investment. To evaluate a project, we need a detailed model for payroll burden, administrator coverage, property debt or rent, utilities, insurance, food, supplies, maintenance, training, management fees, collections timing, and reserves. Then we need to stress-test that model for vacancies and delayed opening.
04 / The question behind the investment
What If You Want to Own the Business Without Running Every Shift?
One of the most consequential questions for an investor with no caregiving background is simple: Who is going to operate this facility?
Some owners want to be deeply involved. They want to interview their own staff, choose their vendors, approve every purchase, and understand the daily schedule. Others want to review financial results, approve major budgets, and entrust agreed operational processes to qualified professionals.
The second investor is not buying an entirely passive asset. Residential care remains a people-intensive, regulated service. But investors can investigate a structured management relationship rather than assume they must personally coordinate every operational task.
You bring the investment. How involved do you want to be in operating your facility?
This is where RCCS's Facility Management Services, or FMS, enters the conversation.
05 / RCCS Facility Management Services
An MSO-Inspired Approach: A Dedicated Management LLC for Each Facility
If you're familiar with urgent care centers, medical clinics, or hotels, you've probably encountered the separation between an operating business and the organization contracted to handle specified business functions. Healthcare organizations commonly use management services organizations, or MSOs, for defined administrative services; hotels also commonly use management agreements.
RCCS's Facility Management Services (FMS) uses the concept as a business analogy, not as a claim that residential care follows identical healthcare corporate-practice rules. The intent is to provide a clearly defined, negotiated operational services relationship tailored to the care facility and its ownership group.
Where appropriate, RCCS proposes forming a separate, dedicated management LLC for each individual facility, identified in the management agreement by its legal licensee, facility address, and CDSS license number once issued. Instead of combining several investors' facilities into one undifferentiated management engagement, each facility can have a purpose-built relationship with separately stated obligations, budgets, reporting, and compensation.
Investor's Facility Licensee LLC
The entity applying for or holding the CDSS facility license, with ownership and legal responsibilities established under the actual application and corporate structure. It retains statutory duties as the licensee.
Dedicated RCCS Management LLC
A proposed management-services entity contracted to perform specifically delegated administrative and operational functions. It does not automatically own the property, hold the CDSS license, or become the Regional Center vendor.
The connection is a bespoke Facility Management Services Agreement. It identifies precisely which services are delegated, who has decision authority, the service standards and financial controls, fees, reporting requirements, and what happens if the parties change or end the arrangement.
Separate LLCs are organizational and contractual tools, not a guarantee of liability protection or a shortcut around licensing oversight. Regulatory counsel, an appropriately qualified California attorney, and the relevant agencies should review the proposed ownership and management arrangement and determine what disclosures, approvals, or updates are necessary. A change involving the licensee or facility ownership may trigger additional licensing requirements. [6]
Most importantly, a management agreement cannot eliminate the CDSS licensee's responsibilities or the appointed administrator's required authority and duties. RCCS's purpose would be to support accountable operations within that legal framework, not replace it. [7]
06 / Your facility, your agreed management scope
Want Us to Run the Interviews? Or Would You Rather Do That Yourself?
Here's an important difference between a highly customized management relationship and a rigid package: two investors can own similar facilities but want completely different levels of involvement.
One investor may love hiring and mentoring staff but dislike purchasing, scheduling, and paperwork. Another may prefer RCCS to coordinate nearly all agreed day-to-day business processes while receiving organized operating reports and keeping strategic decisions at the ownership level.
| Operational area | Owner-retained option | Potential FMS service |
|---|---|---|
| Caregiver recruitment and interviews | Owners advertise, interview, and select applicants. | FMS coordinates recruitment, screening, interviews, and approved recommendations. |
| Hiring and termination | Owner and designated legal employer retain approved hiring and termination decisions. | FMS may coordinate or administer these processes to the extent expressly authorized, with the legal employer and statutory duties identified in writing. |
| Administrator recruitment | Owners recruit and appoint eligible certified administrators, with appropriate oversight. | FMS may be engaged to find, recruit, coordinate, and support two appropriately qualified Level 6 ARF administrators as an agreed coverage strategy, subject to actual qualifications, legal employer arrangements, and required approvals. |
| Scheduling and coverage | Owner or administrator coordinates staffing and shift coverage. | FMS supports schedule design, coverage planning, absence coordination, and staffing reports while preserving the administrator's required operational role. |
| Groceries and household supplies | Owner selects stores, controls ordering, and purchases directly. | FMS manages agreed menus-related purchasing coordination, inventory, supplies, purchasing controls, and expense reporting within approved budgets. |
| Records and operational monitoring | Owner maintains internal reporting and follows up on compliance. | FMS may maintain dashboards, coordinate records workflows, track deadlines, and escalate findings, without substituting for mandated licensee or administrator responsibilities. |
| Financial administration | Owner controls budgets, bookkeeping, purchasing approvals, and performance reviews. | FMS may coordinate agreed vendor payments, reconcile operating information, prepare regular dashboards, and report variances. Authority over bank accounts and disbursements must be specifically defined. |
For example, if you want to personally conduct all caregiver interviews and make the final decisions about hiring and termination, those functions can remain outside the FMS scope. You shouldn't pay for a management service you don't want us to perform.
But suppose you want RCCS to coordinate administrator recruitment, staffing schedules, grocery purchasing, housekeeping supplies, monthly budgeting, and the operational reporting that makes oversight easier. We can discuss a different engagement, priced around those actual responsibilities.
And if your operating model calls for two qualified administrators for additional coverage, that's a staffing strategy we can evaluate and potentially recruit for. It is not being presented as a universal CDSS requirement for every Level 6 ARF. Administrator qualification and facility requirements always control. [8]
One more point investors should understand: the facility licensee remains accountable for a lawful, sufficiently staffed, properly administered care operation. An owner cannot contract away responsibilities that California law assigns to the licensee, and a management company's involvement never excuses neglect of resident care.
07 / The agreement is the operating blueprint
Why We Insist on Detailed, Negotiated Service Agreements
A handshake is not an operating system. If an investor entrusts RCCS with staffing coordination, administrator recruitment, financial administration, purchasing, or other important facility functions, both sides should understand what has actually been promised.
An effective FMS agreement should address the following areas before operations begin:
Scope of services
List every included service and, equally important, the services reserved for the owner or licensed administrator. A written responsibility matrix avoids vague expectations.
Authority and legal employment
Identify who employs caregivers and administrators, who has supervisory authority, who signs employment documents, and who makes final hiring or termination decisions. Address workers' compensation, payroll obligations, and applicable co-employment risks.
Budget and spending controls
Specify spending limits, which purchases need approval, who controls bank accounts, how reimbursements work, and what financial reports the investor receives.
Compensation linked to responsibilities
Negotiate a fee structure appropriate to the scope and staffing obligations. A lighter administrative engagement and a broader operational engagement should not be priced as though they involve identical work or risk.
Compliance, reporting and escalation
Define how concerns move from caregiver to administrator to licensee, how critical events are escalated, how reporting deadlines are coordinated, and how management performance is reviewed.
Insurance, disputes and a workable exit
Determine coverage, indemnification where appropriate, document access, transition assistance, termination rights, and how operations continue safely if the management arrangement ends.
We would approach each facility as its own engagement because an owner's preferred involvement, the needs of its residents, and the facility's staffing and financing structure may be very different from another investor's.
The purpose of an FMS agreement isn't to make the owner disappear. It's to make everyone's responsibilities visible.
08 / Where investors often underestimate risk
A Facility License Is Not the Same Thing as an Operating Business
Even if the financial model is interesting, I encourage investors to examine the steps between acquiring a suitable property and operating a stable business.
Before opening
Confirm zoning, physical-plant feasibility, fire clearance, entity formation, licensing requirements, insurance availability, administrator qualifications, startup costs, and the money needed during the approval period.
Before full revenue
Establish staffing, operational procedures, resident or participant eligibility pathways, program approval where applicable, recruitment, occupancy assumptions, collections processes, and sufficient cash reserves.
For ARFs seeking Regional Center funding, CDSS licensure and Regional Center vendorization are distinct processes. DDS states that approved vendorization does not require a Regional Center to purchase services or place participants with a vendor. For ALW, a licensed RCFE must meet DHCS's provider enrollment conditions, serve eligible participants, and work within the waiver's available program structure. [1] [2]
This is why an investor should request more than a best-case occupancy spreadsheet. The investment review should cover construction or renovation contingencies, realistic opening timelines, payroll before full occupancy, financing costs, reimbursement collection cycles, and what the business would look like if occupancy developed more slowly than expected.
09 / A potential portfolio, one facility at a time
Thinking Beyond One Home? Start by Making the First Model Understandable.
Some investors begin with one facility. Others enter a discussion already considering two properties, a small cluster of care homes, or an eventual portfolio.
A multi-facility approach can make it possible to coordinate selected support functions: recruiting, management reporting, purchasing relationships, administrative systems, and operational reviews. But every property and licensed facility still needs its own compliant plan. You cannot assume one license, one administrator, or one approval covers an entire portfolio.
This is one reason we are interested in facility-specific management arrangements. A dedicated FMS LLC for each agreed engagement can make the contractual scope and operating results easier to identify. Shared support systems, if appropriate, can be separately addressed without blurring legal duties or financial accountability.
For an investor considering expansion, I would rather examine one credible facility model with stress-tested economics than present an impressive ten-home projection based on unverified occupancy.
10 / What RCCS does at the beginning
How We Can Help You Investigate the Opportunity Before You Commit
Our initial conversation with an investor should begin with the basics. What do you want to own? What capital are you considering? Are you interested in an ARF, an RCFE, or are you still evaluating the difference? Do you want to operate hands-on or explore professionally coordinated support?
RCCS's business support can help prospective owners investigate the work ahead, including property and licensing considerations, operations planning, staffing assumptions, inspection readiness, recordkeeping systems, and introductions to the types of qualified professionals a project may require. The precise consulting deliverables would be documented in a separate agreement.
FMS discussions come next when an owner or investor wants RCCS to explore an ongoing operational relationship. We'll talk about the proposed licensee, entity structure, management services, budget authority, administrator coverage, and how much day-to-day involvement the investor actually wants.
Those are bespoke engagements. We don't publish an identical FMS price for every facility because selecting groceries and supplies is not the same work as arranging qualified administrators and coordinating a broader operational program.
My goal is not to convince every investor to enter residential care. It's to help interested investors understand the business well enough to make an informed decision.
Marky Ramone Richmond Pascua
Founder & CEO, The Rosenthal Care Group
Questions investors usually ask
Before You Invest, Ask These Questions
Can I invest without having worked as a caregiver?
You can investigate ownership and investment structures without personally having caregiving experience. However, facility licensee qualifications, required administrators, licensed operations, background requirements, and the specific structure must be reviewed. Qualified people and compliant systems are essential.
Does a dedicated FMS LLC become the facility's licensee?
Not automatically. The licensee is the approved legal entity identified in the CDSS license. A separate management company would be a contracted services provider unless an independently reviewed and approved structure specifies otherwise. Regulatory disclosures and approvals must be assessed case by case.
Can the owner keep control of hiring?
Potentially, yes. Hiring coordination and final personnel authority can be expressly allocated in the agreement, subject to the facility's legal-employer arrangements and the administrator's and licensee's regulatory responsibilities.
Can FMS arrange two administrators for a Level 6 ARF?
RCCS can discuss administrator recruitment and coverage as a potential contracted service. Any proposed candidates must meet applicable qualifications and be appropriately appointed or employed. Two administrators may be an owner's selected strategy, not an automatic requirement for all Level 6 facilities.
Are the revenue figures guaranteed?
No. The figures above show clearly identified published references and assumptions, not approved individual rates, guaranteed resident placements, collectible QIP amounts, net profit, or investor returns. Every investor needs a facility-specific underwriting model.
Is RCCS FMS the same as the DDS Financial Management Services program?
No. "Facility Management Services" here describes RCCS's proposed private management offering. It should not be confused with the distinct California Self-Determination Program's Financial Management Services provider category.
Let's discuss the business before you buy it
Curious About Residential Care Investment? Start With a Conversation.
Whether you've been comparing car washes and laundromats, own rental property, or already have a residential care site under consideration, let's talk about the operational and financial questions you should investigate.
RCCS can discuss your proposed care model, licensing and startup considerations, the type of operational support you may want, and whether a negotiated Facility Management Services arrangement merits further exploration.
Explore RCCS Consulting & Services Contact Us About FMS(888) 272-3301, Option 2
California residential care business support
Sources and Important Disclosures
This article is educational business content. It is not an offer to sell securities, a guarantee of income or occupancy, individualized investment advice, legal advice, tax advice, or a promise of licensing, vendorization, enrollment, or approvals. Illustrations can change when official rates, policies, eligibility requirements, and facility circumstances change. Confirm current amounts and requirements before relying on them in an investment decision.
[1] California Department of Developmental Services, Vendorization Process (including the notice that vendorization does not guarantee placements).
[2] California Department of Health Care Services, ALW Provider Enrollment.
[3] California DDS, Complete Rate Models by Regional Center (check current rates-only files, effective dates, base amounts, and QIP conditions).
[4] California DDS, Inland Regional Center January 2026 Rate Model, staff-operated adult Level 6, four or fewer beds (illustration reference; the current applicable rate must be checked separately).
[5] California DHCS, Assisted Living Waiver and 2026 service rates (Tier 5 maximum payable service rate; room and board are paid separately).
[6] California Health and Safety Code §1569.19 (including certain license-forfeiture consequences of RCFE ownership or facility transfers).
[7] California CDSS, Administrator Qualifications, Duties and Certification Regulations.
[8] California CDSS, Administrator Certification.
For a proposed management arrangement, the parties should obtain independent California legal and tax advice on the entities, employer relationships, management authority, licensing disclosures, risk allocation, and the applicable Regional Center or DHCS program rules.
About the author: Marky Ramone Richmond Pascua, also known as Marky Pascua, is Founder & CEO of The Rosenthal Care Group. Rosenthal Community Care Services provides California-focused residential care business consulting, operational support, training resources, and related services. Visit rosenthalcommunitycare.com.