Converting SFH to Assisted Living Facility

[Dan V.]

Has anybody had experience converting a home into an assisted living facility? We are thinking of buying a 2500 sq ft SFH and extending it to 4,500 sq ft (from 6bed/3bath to 14bed/7bath). We have an operator willing to lease it and also buy it after 5 years. The property is zone R4 which permits assisted living facility.

1. From the appraiser's standpoint, how is it going to be appraised (sales comp, income approach, cap rate, etc) once it's converted to the proposed plan? Will the lease be considered in the appraisal?

2. I'm thinking of incorporating the layout design where it can easily be converted into multifamily. I'm just thinking of an alternative strategy in case things didn't work out with the operator. I don't want to get stuck with 14/7 house. LOL

3. What's the average rent rate per room for this facility?

4. Thoughts on the number below?

PP - $200K

Rehab - $300K

Monthly rent - $6500 (not sure yet)

Any thoughts, tips, or suggestions?