Assisted living facility?

Question

I do not know much about assisted living or nursing homes. I have a colleague that wants to go in and develop an assisted living community.

I need to know what requirements we would need to build and run an assisted living community including:

-Licensing requirements
-building requirements
-What grants, perks, waivers can be absorbed
-facility requirements
-state/federal requirements
-safety issues/requirements
-permit requirements

And anything else that would be geared toward an assisted living facility.

Where can I find this info out? To be honest I do not know where to begin.

If anyone owns a facility or has first hand experience, I would really like to talk to you. Please PM me if this is the case. I would make it worth your while somehow..

Thanks

Rich Weese · Answer

This is not a plug. My brother in law has several in Utah and NV. They are through Beehive Homes. They are only 10 beds or so. The licensing requirements are different as far as meds, nursing etc.
    He has just gone for broke!! He has built 34 individual cottages, with no full service kitchens. There  is a clubhouse, kitchen and full time cook. It is in St. George Utah and was in the recent parade of homes. With a little bit of googling, you can find these. Good luck. Rich.

Darryl Dahlen · Answer

To answer a couple questions:
            
            Licensing: HUD typically defers to whatever the state licensing requirements are.
            
            Building requirements: 48 beds or more is best.
            
            Perks- This would have to be discussed.
            
            Facility requirements: HUD requires a management company run the operations, but now allows for 100% of the beds to be private pay(versus a mix of medicade, medicare, and VA).THIS IS FOR ALFs ONLY.Typically, there is a mix though as you don't usually see 100% private pay.
            
            The rest is mostly state specific so check with them for requirements.
            
            Location is key as proximity to a hospital is a factor and HUD is fairly restrictive when it comes to how many facilities are in the area so keep that in mind.
            
            HUD allows for the highest LTV and flips into a perm loan after construction so it's the best first choice on these types of facilities.
            
            Still, there are reserve requirements and HUD fees associated with the loan, but the savings due to the higher LTV/LTC still save you money compared to conventional financing.
            
            Not to mention under the new LEAN process ALFs can close much faster now.
            
            Email me and I'll send you the latest HUD program highlights for ALFs.
            [REMOVED]

Darryl Dahlen · Answer

Hi Fred. I haven't kept pace with the lending atmosphere for ALF's in recent years so I'm not the best source to offer you viable advice. My focus these days is centered on more traditional investment properties (multifamily, self-storage, mobile home parks, retail, etc). Best of luck, Darryl.

Fred Sams · Answer

@Darryl Dahlen

Hi Darryl, My wife and I are looking to attract small balance debt and equity, to participate in our scaling of Adult Residential Facilities-DD (developmentally disabled adults ages 22-59) ARF-DD. Building confidence, and trust along the way.

My wife and I both have 10+ years each working with this population in facility and clinical settings.

There is an increasing demand well into the future to provide quality care/housing to this population.

If done right this is a strong revenue generating niche.

Today we are looking to attract small balance debt and equity, to support the scaling of ARF-DD facilities.

In the last 2 months we have taken control (lease option to purchase) a SFR for this purpose. We are in the licensing process and approval steps which generally takes 3 – 6 months, before licensing completion, and being able to take on clients.

Right now needs involve exterior/interior TI’s tenant improvement’s, and some reserves.

Phase  I (Current)

TI Improvements

Reserves   $75,000

Phase II

Exercise lease option

$100,000 - $150,000  (20% down shared)

Secure long term debt (Fannie /Freddy)

Phase III

Develop out initial property   $250,000

Control of additional ARF-DD  $500,000 - $1.5 MM (transactional)

We are interested in understanding if, this fits any of your origination buckets, or if you can provide some expertise in helping us identify the best fit structure’s to seek the financing:

Starting the facility, opening the facility, scaling the model.

I have of course pro forma and more detail, we appreciate any input specific to our target niche.

Best

Fred  & Rose / Casa De Fabiosa

Assisted living facility?

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