Assisted Living Facilities
Ive been researching Assisted Living facilities... seems like they do extremely well. But, I dont have any experience in this sector. Does anyone own or operate who could offer some advice and just let me know how I could get started in this business....???
Check with the state about their requirements. Or make your life a little easier and talk to the manager of a facility. Instead of trying to manage the facility yourself....hire the manager and just make money! Good Luck! They are very profitable.
[addsig]
Hi AptHunter,
I bought a facility that was used for elder care a couple of months ago with the intention of getting into that business. I chose not to specifically because a woman that was going to help me (who had been in the business for many years) was told by her doctor not to take on anything else. 15-20 hrs a week, I was willing to do ... not 40-50. I'm a RE investor....and there is more money in REI...
A few comments:
1) You have to decide if it is a business you want to be in (there is a LOT to it) because to operate the business, you will have to know most things about it
2) There are all kinds of licensing and regulatory issues. Things vary from state to state, I'm in CA so I cant give you specifics. In CA these are technically called Residential Care For the Elderly (RCFEs) facilities and are handled by the department of Social Services.
3) you can make good money once you have them rolling and the beds are full. In CA the rates are anywhere from $2700 - 4000/mo PER BED. With a 6 bed facility (very typical here because of the way they are regulated for 6 beds and under), this is some serious cash flow (Rich Dad will be proud of you!). Before you get all excited and rush out to by a train car full of Depends, the liability insurance rates are high, you have employees, workmans comp, a fairly specialized property that has PITI and other maintenance costs, you have to plan menus and social calendars, etc. etc.
4) Filing the beds is the key. You have a lot of fixed costs and getting paying residents in when you are just starting out is tough. You spend a LOT of time marketing to make that happen.
I am turning my 7 bedroom, 4 bath house (a former RCFE) into a triplex!
Good luck.
Mark
There are two different types of loans you can do: a HUD/FHA loan, or otherwise. I have lenders who can do both, and if you can avoid doing the HUD
loan you will be better off generally speaking. It just set up a loan for a client at 5.9% fixed for 10 yrs/amortized over 30 at 75% LTV. If you can put the money down and get a good manager/management company it is a good investment.
There is a Real Estate Broker working full time in the San Fernando Valley Area looking for homes to convert and or existing facilities. His comm rate is 10% due to the specialized nature of his searching.
At this moment he has seven clients all pushing him for properties. He says that the return on capital is averaging about 28% and that is what they call a "Clean Hand Deall" which translates that you do not work just collect the monthly check from the management company. They seem to be breaking along religious and ethnic divisions. Very interesting. A good place to pick up discounted notes secured by second trust deeds.
Lucius
There are two different types of loans you can do: a HUD/FHA loan, or otherwise. I have lenders who can do both, and if you can avoid doing the HUD
loan you will be better off generally speaking. It just set up a loan for a client at 5.9% fixed for 10 yrs/amortized over 30 at 75% LTV. If you can put the money down and get a good manager/management company it is a good investment.
I have to tell you that these facilities can be a bear with regard to state regulations. Don't let me discourage you though. It can be very rewarding as far as helping the elderly and recieving steady income. You also get the benefit of govenrment receivables which you can factor off very easy to raise capital for other acquisitions.