Group Home or Assisted Living Home Experience

[Roger Laughary]

Hello All, I have been intrigued about the future profitability opportunities on this type of property and beginning to have an interest in the ins and outs of how to operate one with proper medical attention, liabilities, and operations details. Who would have some experience with this and where would you look to gain more knowledge on the subject? Thank you, Roger

[Shane H.]

Originally posted by @Jared Viernes:

@Shane H. went to Topeka to dive into this type of investing. I would expect he’s learning a lot about it trial by fire.

Yes 3 mos in and loving it.  Difficult but the place we bought came with a great staff.  Bad staff or bad residents would sink you real fast.  I only hope we can make it better than it was.  We are trying to implement some things to do so.  I was offered to be a part of group housing for mentally ill vets but I'm not sold on the partnership yet - something we are still entertaining - the economics were there.

The struggle we are realizing is the ebbs and flows of the cash flow.  Takes a while to get all the money flowing in.  3 mos in and we still have not been paid by HCBS/Medicaid.  Still working on set up - we've hired someone to do the setup for us but really nothing we can do to speed it up.  I think now we are owed appx $30-36k by them - definitely in assisted living or any group home setting unless you are doing skilled nursing I'd say it's best to focus on private pay folks and make sure to underwrite them to determine how long they can pay the private pay rate before they run out of money.  We've had that happen to two folks since we've been there and it takes a serious hit to the bottom line - your option is to discharge them and find another resident however you really have to weigh the fact that if you kick a resident out you can disrupt the whole community of residents and throw the whole thing off balance.  We really do have great staff and residents alike - we have some areas that can be improved, but we are hoping to build on the foundation that is here.

In a year or two we will be ready to buy in Wichita.  However the scale I want to stay at is probably 25-61 beds depending on the specific type of resident you were trying to go after.  Smaller than 20-25 I think it's hard to make it work with a team in place.  Just don't have the scale - you can do it but you'd be doing most of the work yourself.