How do I buy an existing assisted living facility?
Direct answer
To buy an existing assisted living facility, define your criteria, line up financing and an operating plan, find opportunities on and off market, sign an NDA and underwrite the community, submit a letter of intent, complete due diligence, and then get licensed through the state's change-of-ownership process before closing.
What to know
Criteria: markets, care type, size and budget. First-time owner-operators typically target 16 to 50 beds.
Financing: SBA 7(a) loans go up to $5 million with as little as 10% down. Conventional loans typically require 25% to 35% equity.
Underwriting: review the trailing-12-month P&L, rent roll, census, payor mix, staffing and 3 years of state surveys, and value the community on normalized NOI.
Due diligence typically takes 30 to 90 days, and the change of ownership can take months. In California, it can take 3 to 12 months.
How Haven helps
Haven guides buyers from search through closing, including licensing and financing introductions. Read about buying an assisted living business.