Assisted Living Facilities

[Bhuvanandra S Kumar]

Investment Info:

Other commercial investment investment.

Acquired three Assisted Living Facilities as a group with 46 Licensed Beds. The owner is planning on retiring and was able to work out a Seller Financing Deal. We are excited on the possibilities and moving forward towards our goal of 200 Licensed Beds by the end of the year.

What made you interested in investing in this type of deal?

We have been in the Assisted Living Business for the past 4 years and see the need and the possibility to serve the community in a meaningful way.

How did you find this deal and how did you negotiate it?

Networking... the owner of the 3 facilities was providing services to one of our other facility thru his Home Care company. We met and discussed the possibilities and kept in touch... a year later he was ready to off load his investments.
Educating the seller on various options on financing and an exit strategy for him to Retire early was the key in out negotiations.

How did you finance this deal?

We were able to bring in 25% of the investment from our existing investors/lenders and the remaining was financed by the seller. Our experience in the industry and the confidence that we can turn around and run the facilities more profitably was the key.

How did you add value to the deal?

We already had 2 facilities in the area and knew the market. By consolidating our operations and negotiating on the various other services we provide added value. We were able to hire a Marketing person apart from an Administrator and a Maintenance Company for all our facilities. We are currently improving and updating the 3 facilities which we added so that the existing residents and their families are happy with the changes.

What was the outcome?

It has been 3 months since we closed on the deal and we are working on every area of the business. We are able to improve the morale of the staff, hiring new staff, updating the facilities with new flooring, painting and kitchen/decorations.. etc., along with inviting the families of the residents to participate in events and activities has helped us have a positive impact.

Lessons learned? Challenges?

Maintenance of these older facilities is a challenge, so we hired a property management company on a retainer basis. We are working on our new name, website, marketing materials etc.,
Consolidating our payroll, insurance, service providers etc., has resulted in considerable cost savings.
I think we are ready to look for our next deal now...

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am a Licensed Real Estate Agent in Michigan and would be glad to assist anyone who is looking into the Senior Market. We are currently looking into other states as well and exploring the possibilities of getting into Senior Apartments, Independent Living and Assisted Living facilities.