Buying an Assisted Living Facility- WA State (Seeking Assistance)

[Jason Polen]

Hello BP Community,

First-time post.

I'm under contract for a vacant assisted living facility (ALF)/ skilled nursing facility (SNF) in SW WA state. It was state-certified for skilled nursing and memory care for 36 certified beds. It closed in 2012 for mismanagement (complaints + high expenses + reductions in Medicare payments). The current owner (who is not in the senior living business) sat on it for a while, but recently passed away. His surviving spouse is wanting it sold quickly. When it was open, it was 90%+ full. My plan is to buy it, make a few repairs (under $10k), then attempt to lease it to an ALF/SNF operator. I'm in the midst of my due diligence and I have three issues I'd appreciate feedback on:

1. Financing. I am assuming this will have to be private/hard money since it's totally vacant. Correct me if I'm wrong. But, assuming I'm correct, does anyone have any financing referrals. I'm specifically interested in lenders that do senior living. 

2. Leasing. Does anyone have experience leasing out a facility like this (as the lessor)? If so, I'd appreciate hearing your input on possible market rents and the ease of finding a tenant. I have done some preliminary research, but would like to hear from someone who has done it. 

3. Operators. Finally, if anyone knows of any operators who may be interested in leasing this facility (or a good resource to find operators), I'd appreciate that as well. 

Thank you BP community!

Jason

[Greg Dickerson]

Originally posted by @Jason Polen:

Hello BP Community,

First-time post.

I'm under contract for a vacant assisted living facility (ALF)/ skilled nursing facility (SNF) in SW WA state. It was state-certified for skilled nursing and memory care for 36 certified beds. It closed in 2012 for mismanagement (complaints + high expenses + reductions in Medicare payments). The current owner (who is not in the senior living business) sat on it for a while, but recently passed away. His surviving spouse is wanting it sold quickly. When it was open, it was 90%+ full. My plan is to buy it, make a few repairs (under $10k), then attempt to lease it to an ALF/SNF operator. I'm in the midst of my due diligence and I have three issues I'd appreciate feedback on:

1. Financing. I am assuming this will have to be private/hard money since it's totally vacant. Correct me if I'm wrong. But, assuming I'm correct, does anyone have any financing referrals. I'm specifically interested in lenders that do senior living. 

2. Leasing. Does anyone have experience leasing out a facility like this (as the lessor)? If so, I'd appreciate hearing your input on possible market rents and the ease of finding a tenant. I have done some preliminary research, but would like to hear from someone who has done it. 

3. Operators. Finally, if anyone knows of any operators who may be interested in leasing this facility (or a good resource to find operators), I'd appreciate that as well. 

Thank you BP community!

Jason

I am working on one of these right now. My plan is to convert to short and long term rentals not senior living. The best financing for a project like this is through local and regional banks. I am getting a loan at 4% for acquisition and construction at 75% LTC