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Residential Assisted Living- What is up with this?
Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one!
Quote from @Lexi Blevins:
Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one!
My partner & I are familiar with this strategy. I'll reach out via DM.
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Real Estate Agent Illinois (#475. 112189)
- The Smith Group
- 3126817487
- https://www.chicagodiscountproperties.com/
Quote from @Crystal Smith:
Quote from @Lexi Blevins:
Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one!
My partner & I are familiar with this strategy. I'll reach out via DM.
Thank you!!!!
Quote from @Crystal Smith:
Quote from @Lexi Blevins:
Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one!
My partner & I are familiar with this strategy. I'll reach out via DM.
I’m ears too!!:)
@Lexi Blevins, if you haven't already, explore the investment strategy of rent-by-the-room. Depending on the property's location, it could perform very well as a co-living asset (3x of a traditional rental). Companies such as HomeRoom and PadSplit will help you get started and source tenants. If you are interested, I'd be happy to make intros.
Unfortunately, I'm not well-versed in assisted living but I understand the strategy can be lucrative.
I hope this provides some guidance and clarity!
Hey @Lexi Blevins! You're going to want to start by checking with local zoning and planning to determine is the home can become residential assisted living. Sometimes it has to be zoned properly or it might need to be a specific distance from an already licensed home.
Then you need to determine the licensing requirements and see if you can meet those. Often times there are bedroom size requirements, residential sprinkler system requirements, among others.
You'll want to then check the state regulation agency and review their requirements and licensing process.
If you plan to operate the entire business, that will be work. But if there are enough bedrooms or you get multiple homes, you will be able to support hiring a local manager to manage daily operations.
You can also do what I do and lease the home TO an operator. Make the home licensable and tailored to residential assisted living, and then lease it at a higher than market rate to an operator who will run their own business out of your home. Finding the right operator is the key here but once you do it's passive for 3-5 years as a commercially leased home. They even handle most maintenance and all utilities. Pretty sweet arrangement!
Quote from @Charlie Cameron:
Hey @Lexi Blevins! You're going to want to start by checking with local zoning and planning to determine is the home can become residential assisted living. Sometimes it has to be zoned properly or it might need to be a specific distance from an already licensed home.
Then you need to determine the licensing requirements and see if you can meet those. Often times there are bedroom size requirements, residential sprinkler system requirements, among others.
You'll want to then check the state regulation agency and review their requirements and licensing process.
If you plan to operate the entire business, that will be work. But if there are enough bedrooms or you get multiple homes, you will be able to support hiring a local manager to manage daily operations.
You can also do what I do and lease the home TO an operator. Make the home licensable and tailored to residential assisted living, and then lease it at a higher than market rate to an operator who will run their own business out of your home. Finding the right operator is the key here but once you do it's passive for 3-5 years as a commercially leased home. They even handle most maintenance and all utilities. Pretty sweet arrangement!
Hey Charlie, where are your assisted living facilities and how much over market rate rent are you able to get for them vs renting them as long term rentals?
@Ian Martin It's going to depend heavily on what the home can be licensed for, the finish of the home, and how many residents it can be licensed for. But it ends up being around 3X the long term rent.
Having been heavily in short term rentals for a while, I've found this to be about as much work up front, but we don't have to furnish, we don't have the management nightmares that STRs bring, we make as much or more cash flow, and we handle less maintenance than a traditional SFR. We're signing 3-5 year escalating commercial leases, which is awesome.
Generally, what we've been estimating is that if this is a pretty nice residential assisted living home, that we will get $800-1100 PER resident.
The hard parts are ensuring you can have a home that can be licensed for as many residents as possible (comfortably) and finding a well qualified operator to lease it to. Licensing requirements vary heavily by locality and usually the home will need to have a sprinkler system, bedroom size requirements, there may need to be min distance to any other licensed homes, etc.
it's great to hear about your property renovation! I suggest starting with an unlicensed group home. It's a simpler entry point and aligns well with serving protected classes like veterans, seniors, and single mothers—key to ensuring stability against HOA or city issues.
Begin connecting with non-profits and agencies that help these groups find housing. They're often on the lookout for properties like yours and have the funds but lack real estate connections. This relationship guarantees income, as payments come directly from these organizations, not the individuals.
I'm fascinated by this RAL concept and wonder if any of you are serious about moving forward or maybe are in process? So many steps but potentially very lucrative.
I own and operate Platinum Resort Assisted Living in Georgetown, Texas. I am VERY familiar with this strategy
Whoever said that an assisted living facility is a passive real estate investment is lying. It's a full-blown business with staff.
The medical industry is fueled by referrals, so you'll need to get out there and build relationships that will keep your facility full.
It's also about filling the gap in your area for insurance. For example, in your area are there no assisted livings that will accept Medicaid, Blue Cross Blue Shield, etc.? These days insurance companies have the reputation for paying you for the service and then trying to claw back the money later.
Can you make money? Absolutely! Is it passive? No.
Quote from @Lexi Blevins:
Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one!
i’m looking into this as well. I have a property with a concrete wheelchair ramp. figured someone would love this.
I have also been looking into this strategy in Florida and would love to connect with anyone who has experience with this.
@Lovenia Chead are you currently doing this? I would love to hear more of your experience.
@Laura Chotkevys how much capital would you recommend for starting this type of business?
This is something I've been mulling over and I admit that I'm kind of curious to know how it all works (regulations, certifications, process)
Quote from @D. Dee:
@Laura Chotkevys how much capital would you recommend for starting this type of business?
We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k. On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.
Quote from @Laura Chotkevys:
Quote from @D. Dee:
@Laura Chotkevys how much capital would you recommend for starting this type of business?
We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k. On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.
Laura and Brett are the real deal! Looking forward to my podcast interview with Brett next week! Like @Laura Chotkevys said, you can raise money, creatively finance from the seller, partner, get lower money down loans (SBA - although this is harder for the first deal sometimes), get a private note... lots of ways to go about this with low money down if you put in the work and know how much you need.
@Charlie Cameron What's your podcast?
Quote from @Nichole Kinard:
@Charlie Cameron What's your podcast?
Hey Nicole! It is launching in about a week. The RAL Room assisted living Podcast.