— It's 8 o'clock in the morning, and the sun is just lighting up the sky over Utah's Wasatch Mountains. It's also lighting up the parking lot at the sprawling Sam's Club in Salt Lake City.
Look closely and you'll see a highly improbable sight. It's something that would have been impossible to imagine happening just five months ago. Robert Adams, and a few staff members who work for him, are piling out of their well-worn van and heading across the lot toward the entrance. This is a new routine for Adams, who is a registered nurse by training and also the new owner of Midtown Manor, a long-term care facility where, up until a few months ago, he was working as an employee. This morning, he is here to buy the groceries he needs to feed his 80-person nursing home.
"Your total is $3,357.38" the clerk announces, and Adams whips out his checkbook, happy to pay the bill considering how many thousands of dollars he's saving over cost of using a commercial food supply company. This is "small-business thinking" at its best.
When Adams completes his shopping expedition and sits down to reflect on his newly acquired business, he confides: "My life changed overnight."
His wife, Teresa, echoes the sentiment: "It's kind of unbelievable," she says. "I have to remind myself all the time."
Last June, Adams was a staff member at Midtown Manor, working as the supervising nurse, keeping his eyes keenly focused on the medical well-being of the residents. His wife, Teresa, was working at a local hospital as a full-time nurse's aide. And with four young children at home, they had their hands full.
Now the husband-and-wife team own Midtown Manor.
"When I started in the long-term care profession, I thought, 'It would be nice someday to own a nursing home,' " Robert explains. "I figured maybe 10 years, 15 years down the road, it might be a possibility. If anyone would have told me it would have been this year, I would never have believed them."
Buying a business
After graduating from nursing school 11 years ago, Robert worked at various hospitals until he landed a job at Midtown two years ago.
"I immediately fell in love with this particular building," Robert says, "because of the philosophy of the owner at the time — John Pappadakis. I loved the atmosphere and how much, you know, kindness and caring there was. I thought, 'You know, I could stay here for a long time. I really enjoy working here.' "
Pappadakis, the former owner, still comes in every day. And it's easy for an outsider to see what Robert is talking about when Pappadakis sits in with a group of the residents who are playing poker.
He chides one of the players by bellowing out: "OK, another 25 bucks to you Floyd. You're not afraid of a little lady there, are ya? OK, come on, put yer money in there." Each resident has a story, and Pappadakis is the kind of owner who made it his business to know that story, caring about each individual he serves.
Pappadakis' voice rises with pride when he talks about Robert Adams. "I hired him as my director of nursing. First he was my R.M. He was so good that when I had a need for director of nursing, I hired him as my director of nursing."
But Pappadakis, who had owned the nursing home for more than 20 years, says that Robert wasn't exactly his ideal buyer. "Rob would never have gotten a nursing home with the experience he had, with no business training and no financing, no nothin'," Pappadakis says. "Rob would be the first to tell you he had no chance to buy it from me."
Robert's lack of business training and modest finances would have been deal-breakers, even in the best of times. However, this wasn't just any nursing home, and Pappadakis had a soft-spot for Robert. The problem for both of them was the asking price: $3.5 million.
Robert talked to Pappadakis and said, "I would like the opportunity to see what I can do to buy your nursing home. Will you give me a few months to look into it?" But when Pappadakis agreed to let him try, Adams had no idea where to turn.
The power of suggestion
Fortunately, it was their wives who came up with suggestions that ended up making the difference.
"My wife is the one that talked me into selling it to him," Pappadakis explains. "She agreed that he was such a good director of nursing and she felt that we should give him a chance buy it, so he'd continue running it with the same loving philosophy that we had. And then, she pointed out to me: 'You were his same age when we first bought our first nursing home.' "
Robert, too, credits his wife for making a key suggestion: "My wife kept telling me, 'You know, why don't you contact a bank and see if we can just get a loan?' And I kept blowing it off thinking, 'Now, who is going to lend us money? Who is going to lend a couple ordinary people money to buy a nursing home?' And after I had exhausted all my options, then I actually picked up the phone book here at this desk and flipped through the phone book. And flipped to Wells Fargo and dialed that number. And a person picked up and I said, 'I want to buy a nursing home. Can someone help me with a loan?' "
That's when the process ended up on the desk of Ryan Furstenau at the downtown offices of Wells Fargo in Salt Lake City. After the branch officer determined that Adams was serious about his request for a loan, he sent him on to meet Furstenau, whose job is to ask all the tough questions: "It was very good to know that Rob currently was the head nurse at the location," Furstenau says. "And that he had the expertise and technical skills needed to run a nursing home. The thing that we at the bank really wanted to understand was from a business-management standpoint: Did they have what we thought they needed to make sure that vendors got paid on time? And, just as importantly, that we at Wells Fargo would be paid on time."
One of the key elements that helped the bank agree to support the loan was a demand that Pappadakis stay on at Midtown Manor and coach Robert for at least a year on how to run the business.
"They wanted me to guarantee that I would stay and teach him how to run it," Pappadakis says. "They wanted me to show him how to continue running it like it is. So it could continue making the money it has been making."
But the bank also was concerned that Robert himself would eventually be able to take over. "Again, it's very important to know that the seller's still tied to a transaction that in some informal way," says Furstenau: "There are specific SBA regulations that don't require a seller to be around much more than about a year. So, again, we do need to make sure that the individuals we're lending the money to have the expertise to come in, gain ownership of the business."
For Robert, the process went remarkably smoothly. "It happened fast. That was Feb. 17 that I made that phone call," he recalls. "And June 1 is when we closed the loan and took over ownership. I felt great. I printed up the e-mail from the bank and ran down the hall and called my wife and called my family."
"We were all excited," says Teresa, remembering the day the bank approved their loan. "I was so relieved, relieved that it went through and that it worked."
While they continue to marvel at their good fortune, the thrill of ownership has come with a burden, too. "Along with the responsibility comes the worries. Since I became the owner, I have a hard time falling asleep because I think of all the things I need to do," Robert says. "It's hard to unwind, but I don't regret it at all. I love long-term care. There is a huge satisfaction to being an owner and seeing things click and work and seeing employees happy, seeing patients happy, and seeing it all work together. That can be very, very rewarding."