3 Ways to Start an Assisted Living Business (And Which One Might Be Right for You)
May 29, 2025
Starting your assisted living business can feel confusing—especially when there’s more than one way to do it.
Should you buy an existing home? Build from the ground up? Rent a property and convert it?
Each path comes with tradeoffs—this blog will help you pick the best option based on your budget, timeline, and goals. Let’s dive in! 👇
Check out this video, too;
Why This Matters
Not all paths to owning an assisted living facility are created equal. Some take more time and other cost more money.
If you pick the wrong strategy, you could spend months stuck in licensing or tens of thousands fixing mistakes.
The good news? There are three main ways to get started—and we’ll help you understand which is the best fit for you.
Here’s what each option looks like, how to choose, and what to do next.
Check out the Profit Path tool with help analyzing which option is best for you.
Path 1: Buy an Existing Assisted Living Facility
This is often the fastest way to get into the business. You’re buying something that’s already running and making money.
✅ It's already licensed (you'll just need to do a change of ownership process to transfer the license)
✅ The home may already have trained staff and residents
✅ You can jump straight into operations with a shorter ramp-up time
💡 This is great if you want to learn the ropes while generating income.
What to Watch Out For:
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Make sure the license matches the level of care you want to offer
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Check for existing citations, complaints, or state violations
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Verify all financials—request P&Ls, census reports, and staffing costs
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Tour the property and interview staff if possible
🛠️ Pro Tip: Ask the seller to stay on for 30-90 days to help with the transition once you have completed the purchase of the facility.
Path 2: Buy or Rent a Residential Home and Convert It
This path is ideal if you want flexibility or don’t have the capital to buy right away. You find a residential home, purchase the home or sign a lease, and go through the licensing process to convert it into a care home.
✅ More flexibility if you want to test the model first
✅ A faster way to enter the market in some states
What to Watch Out For:
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Make sure the city allows assisted living in that neighborhood
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Confirm the home meets fire and building code requirements
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The landlord (if renting) needs to know and approve your plans so you don't get shut down
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You still need to go through state licensing (which takes time)
💡 This can be a great option for bootstrappers or those with a healthcare background who want to start lean.
📄 Need help? Grab our Lease Agreement Template to protect yourself before signing anything.
Path 3: Build a New Facility From the Ground Up
This option gives you full control—you design the layout, choose the number of rooms, and customize everything to your vision.
✅ Custom layout with wide halls, large bedrooms, ADA-compliant bathrooms
✅ You can build a bigger facility to serve more residents
✅ Modern design may attract higher-paying clients
What to Watch Out For:
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This takes significantly more time—sometimes 12–24 months
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You’ll need city zoning approval, architectural plans, permits, and contractors
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Financing new construction is harder without a track record
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You still need to get licensed before opening
💡 This is a smart move if you’ve already run one or two homes and are ready to scale.
🛠️ Pro Tip: Partner with experienced contractors who understand healthcare or senior housing to avoid costly rework.
Free Tools to Help You Choose the Right Path
No matter which path you’re leaning toward, you need a solid business foundation. The right tools can help you plan smarter, avoid common mistakes, and move faster.
🎯 Use these free tools to make your decision easier:
📌 Business Plan Checklist – Know exactly what to include in your plan
📌 Underwriting Calculator – Run the numbers and forecast your revenue
📌 Profit Path Tool – Determine which option is best for you and how quickly you can become profitable
📌 Lease Agreement Template – Protect yourself legally when renting
💡 These tools are perfect for beginners who want to move quickly and smartly. You can download them all on our site.
Next Steps: Take Action
If you're serious about launching your assisted living facility, here’s what to do next:
🚀 Step 1: Download the Business Plan Checklist and get your vision on paper
🚀 Step 2: Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
🚀 Step 3: Pick your path—buy, rent, or build—and take your first step toward launching (check out the Profit Path tool for help with this)
💬 Got questions? Drop them below.
Show full transcript 👇
Transcript
00:00:02
hey friend it is Brandon Gustafson with Assisted Living investing excited to have you here with me on the channel today at Assisted Living investing we are here to help beginners launch their Assisted Living living B we're here to help beginners launch their Assisted Living business in the next 12 months so excited to have you here with me in our video today we're going to be getting into the three paths to starting your Assisted Living business so excited to uh have you on here with me on the live
00:00:29
session today um um it's something that I do these on Tuesdays we a little bit late today because I was having a fun conversation with a member of my Mastermind group we did a really deep strategy session and had a lot of fun doing that so if you're interested in learning more about that get over to Assisted Living investing. net and go to Mastermind and you can learn more about that program um and as we're doing this as well I'm going to have the the business plan checklist that's going
00:00:56
down um on the ticker so you can watch that and uh go and grab that free resource to help you get started on your on your journey um I'm just getting this link here and then I'm going to go ahead and Share my video [Music] um yeah so today we're going to be talking about the three paths to starting an assisted living business um sorry for the background uh it's a little bit different we've moved into our new home on Saturday so for those that have been a little bit following
00:01:24
maybe a little bit of that um it's been exciting uh to do that so my background um for the the foreseeable future is just a bunch of blank walls because I'm in a unfinished basement so I will probably be doing this kind of uh of a thing um for the next little bit um anyways let's get into the live um again we're talking about the three PA to starting your Assisted Living business for those of you that don't know me that aren't familiar with with who I am um I'm actually wearing the same shirt
00:01:53
that's in this picture today which is random um my background in Assisted Living I I've been in the healthcare industry for over a decade now um have worked in a lot of different areas a lot of different programs and um have a lot of understanding there I've owned two facilities uh since September of 2020 um I operate them out of state I live in Utah and one of my facilities is in Colorado and the other one is in Idaho so I do that and um have secured over1 and a half million dollars in SBA
00:02:21
funding so I've gone through that process a few times and understand that quite a bit I just have a lot of good base under good base knowledge of the healthcare industry um and if you're new here if you're watching and uh if you could type in newbie you're new to this and trying to get more information um or if you are watching this you're an operator and want to kind of know a little bit more about some of these pasts as well then type in operator down below and if you have questions as we go through this um
00:02:47
whether you're on the live or watching the replay make sure you type those questions in I do have time for um Q&A here at the end of the call and um if if you know if you watch this later and put them in there I will get to them in a future uh live session so you just want to make sure you get that out there um now let's talk about the three paths there's there's really three paths uh that that can kind of get you to the point and there's kind of a fourth one um that we'll probably touch on just a
00:03:14
bonus one for you as we get into this but the three main paths are number one buying an existing business number two is buying and converting a home into an assisted living home and number three is the route of leasing something from somebody um and that could be something that you're converting which is what we'll largely talk about here or something that is already existing and you're just going to lease it and kind of take over operations these are the three main paths um and a fourth one
00:03:41
that you might consider is going to be building something from the ground up um so that's something that you could definitely do um and I've talked to a few people that that's the route they want to go and and certainly you can get things customized exactly how you want it if if that's where where you want to go uh but you're going to follow a lot of the same processes here regardless of the pathway that you choose you're you're going to be able to follow the same path as you get into this and get
00:04:06
your Assisted Living business started and up and running so let's talk about the first one um buying an existing business so on here um there's some online resources that you can tap into and I have videos on on some of these um three big ones that come to mind are uh loopnet which is a great one a really good uh a really good website loopet n.com highly recommend it lets you get into assisted living specific stuff so go and check that one out Biz by sell is another one and this is typically like
00:04:38
businesses that are for sale um oftentimes you'll see a lot of like franchise type opportunities there but it's a good one and then ky.com ci.com um is going to be very similar these are these are like Zillow and redin and those types of of tools that you have looked at for your personal residence in the past probably um they're they're like but they are specific to existing businesses of commercial businesses that are on there and so this is a really good opportunity for you to go and find those
00:05:08
opportunities um that are out there to see if they're a good fit for you it doesn't cost anything to use those tools um they're free and and allow you to kind of make some progress as you're trying to find the right opportunity for you um as you go through this a big benefit is the licensing process when you're buying an existing business you go through what's called a change of ownership or a process and in doing that it it makes it a little bit easier for you because you
00:05:36
can use a lot of the information that you are getting from the sellers you can get their policies and procedures you can um work with them uh to to make sure that there's a smooth transition um sometimes you can put a management um agreement in place which lets you kind of operate underneath their license while they're finishing the licensing or while they're doing a Medicaid um certification process C and things like that so you can kind of work in tandem for the first little bit and you can
00:06:04
negotiate this um as you are buying a facility and say hey we need you to stay on with us for two or three months and they they can help you out um in helping you be successful my experience is people are totally fine doing this because you're taking care of their residents and their staff people that they love um like they could be getting out of the business for any number of reasons but one thing that is common is they love the people that they're serving and the people they get to work
00:06:30
with and and so they will be happy to kind of be able to take a take take a step back for a second and um you know take a breath but also help you out and go through things so change of ownership is is a very uh it's a great process to go through uh somewhat simple similar um to what you're going to do when you get a brand new license but a little more simplified uh can help you get that done and and then when you get into funding options for for this one a lot of what I see is SBA um is a really good route to
00:07:01
go with these existing businesses especially a residential Assisted Living there's other options I mean you can go private money you can work with people that have a fund like there's a lot of options out there to to get into this and and go this route um SBA is something that I've done personally myself I've I've closed on three SBA Loans um and I'm very familiar with that process and it's a really good route to go to help you get under contract and close on an opportunity to help you
00:07:30
launch the business so U but there's there's a lot of different funding options as you get into looking at buying an existing business that's out there but SBA is one that is um kind of unique to to this type of a of a scenario now let's talk about the second option here this is buying and converting a home into an assisted living facility so in this you want to spend some time to find the right home um you can use free resources here as well you could identify what your criteria is um how many bedrooms how
00:08:01
many bathrooms square feet where you want it to be located you know you can get on Zillow or red fin or or some of those other types of things and get that that information um there so that you know which home you want to do you want to find that right home and then you want to work on the zoning process um you want to get in there and you want to talk to the city planner you want to make sure that this thing is zoned correctly so that um you can operate it once it's once it's fully licensed and
00:08:29
doing that you're going to have a lot more um success and and and not run into barriers where it's like okay I bought a home and now you I started doing some of the renovations that I know are going to need to be done and then you find out that it's not zoned properly and so you want to do that there there's just kind of a sequential order that you have to follow as you get into this when you when you go out of order something that's going to happen is you could just kind of fall back and and
00:08:56
find that this wasn't the right fit I talk I talked to a lot of people out there that um have existing homes could be a town home could be uh a random house that they had that uh that has been single family rental for a while um and they're like you know they find this strategy and they want to to move forward with it um and sometimes it works and sometimes it doesn't the first thing that you want to do when you get into that scenario though if this is you and you're watching is talk to the city
00:09:24
planner go to your local municipality find them on their website reach out to them phone call is going to be best and say hey I have a home it's on 123 Main Street and um I am thinking of putting in a care home or a residential assisted living home or whatever it is you're going to have to maybe explain it to them a little bit because they don't when they hear Assisted Living they think the apartment style Assisted Living um and they're going to say no you can't build that there and your thought process is I'm
00:09:53
not I'm not building it I am taking this home and converting it so I can serve this population so you have to kind of articulate that to them so they have a better understanding of what that looks like um and then they'll tell you it's either Zone properly or that um that they need to um that you need to make some changes and that that zoning change process could be something as simple as an application or could be as complex as um taking it like putting it up for notice if you've ever driven around
00:10:25
where they're going to make a zoning change or something like that they'll have like a a public notice and then they put it in to the city council meeting agenda and you've got to go and present and and people are voting on it and stuff like that it could be that complex it could take months or it could be an application and you're done in two weeks and and it's good to go or you might find out that it's fine you want to make sure this zoning piece is tied in and and that it hits on on what you
00:10:48
need so that you can move forward with it and I still have a question here from Phyllis um Davin um she and it's about zoning so I'm going to pause and do that for you right now Phyllis if you have any other questions please type those in um so how you approach zoning um what are some good questions to ask so hopefully what I just told you there is some good some good guidance but um really what it is is you you want to say here's my home um it's located in this spot is what what is the zoning like
00:11:16
that that's a base question that you can start there um what's the Zoning for that and what's allowed in this house because they can easily look that up and and now they've gotten to the point you know they found that it's um zoned R2 or Z five or whatever zoning thing it's going to be and they're going to say yeah it looks like in this zoning uh area in that area the zoning is is R2 and what that means is you can have you know single family um people that live there um and then you can like run a
00:11:44
daycare out of the out of the home like they'll tell you what you can or cannot do and at that point your question is um well cool that thank you that's really helpful what I'm looking to do is I want to have a care home that works with special needs and um it's going to be you it would be licensed for four residents um that would live in the home um is that something that I can do out of that home with that zoning like that's that's the kind of question or it could be you know um it's a home and
00:12:12
you're like so what I would like to do there actually it's it's what's called a residential assisted living facility and what we do there we do Assisted Living um but we do it out of our home and and we run that business and we care for these people we provide them with activities of daily living um but they live there and and we have staff that are coming in and out but it's the home for the residents um would that zoning align with with that type of business like that that's the type of thing you
00:12:38
might want to give them a little bit of a lead in um and explain a little bit of what you want to do there because like I mentioned uh if you just say yeah I want to do an assisted living they're going to think you're not going to demolish that house and build an apartment there like you cannot do that like that that very well could be the thing that is going through their mind you need to not make an assumption um that they know what you're talking about and kind of be a little more specific and lead them
00:13:02
along so hopefully that gives you some guidance there um feel free to like expound on that if if you need me to get into that here in the Q&A session okay um the licensing process here when you're buying a a brand new home um and doing a conversion is going to be slightly different from that change of ownership that we talked about there with um buying an existing facility um you're going to have to go through the the full licensing process which includes making sure the zoning sign
00:13:28
offs are there um fire dep department has come in and given approval that um you are you have your policies and procedures like everything else is going to kind of be the same as that change of ownership process but you're starting a new it's going to be slightly more expensive than a change of ownership and um then you're going to have to adhere to all of the brand new rules that uh are in in place as of the day that you are licensing that facility whereas a change of ownership you can get
00:13:54
grandfathered into Old rules um as well so just kind of a little bit of a different there um in that process your funding options here um you could try the SBA um the SBA is is something they may be okay with it because you're doing a business there more than likely though you're going to have to buy this on like a traditional or a conventional mortgage and then you could go to the SBA and say or or even just like a get a small business loan that's not necessarily the SBA at a local bank or credit union and
00:14:23
say I need $100,000 as operating Capital to launch this business to make sure that we have enough to cover payroll and things like that so you can kind of combine those two loans one that is buying the property and one that is for operating income um and you want to just build a business plan that is going to articulate what you're trying to do excuse me so that when you go to the small business loan the SBA whoever it is that you're working with you can make a case for why you need that money and
00:14:52
what it's going to be used for so that they feel a little more confident in who you are your rates and and terms and things like from a from a big standpoint they're going to be fairly similar your down payment is going to be fairly similar 15 20 25% maybe on a traditional or conventional mortgage that's used as a as an investment property um so that's something you kind of want to be aware of uh when it comes to SBA you're going to be in the sense where you buy an existing business um with the home it's
00:15:23
going to be like a 25 year term so much longer whereas if you get something that's more short term that's just operating Capital you're probably looking at like 7 to 10 years um is something that's that's going to be more likely with the funding if you're going to combine those two things so you're just going to kind of be aware there um and yeah you're welcome Phyllis um let's see um I think that was yeah just the one question so far so if you have any other
00:15:47
feel free to type those in so that is buying and converting a home now let's get into Leasing and I'm going to say converting but this could be even just leasing um the the business from somebody and taking over operation uh but Leasing and converting a home is going to look very similar to buying and converting a home you um need to find the right home um and you can do this there's actually tools online um like you get on to like I don't know rent Ley I think is one I I'm not as familiar
00:16:16
with the websites that can help you out with renter renting I think you can find rental homes on like Zillow and redin and and some of those other websites as well but you can go find these properties um that you want to rent and then it's a different conversation with the landlord um you're going to have to talk to zoning just like we talked about there with with buying a home and converting it so you want to have that conversation and then you would take that to the landlord and say hey um I I
00:16:43
want to do an assisted living I've already talk to the city they're fine from a zoning perspective or this is XYZ is what we need to do to get a Zone properly but I think your house would be really ideal for this you know it has seven bedrooms and and five bathrooms I think it's perfect for doing Assisted Living and then you want to you have your business plan and you want to lay this out to them and say um you know something like um what we're going to do here is we're going to serve the elderly
00:17:08
population they're not going to trash your home they're not going to um be hard on the house um in any way they're going to be good tenants they're going to go to bed at 8 o'clock at night they're going to get up super early but they're going to you know just hang out inside the house and maybe walk around the neighborhood and and it's going to be a really good benefit to the neighborhood as well um and so you're having this conversation with the landlord to try to um talk with them a
00:17:34
little bit and and give them just piece of mind that they um you know that they can feel comfortable with you renting the home leasing the home and putting the assisted living facility there um the licensing process here is going to be very similar to getting that that facility that that license when you're buying a home and doing a conversion unless you are buying uh unless you're taking some over for somebody at that point you can kind of do a change of ownership process there so this kind of
00:18:03
lets you do The Best of Both Worlds um and figure out which one's going to work best for you and it's just kind of making a case to the landlord that this is a good fit for them and these are the reasons why it's a good fit for them as they are as they're going through them um so that's something you want to keep in mind the fourth one I don't have slides for this one but this is constructing a business or constructing a home um the licensing process is going to be licensing zoning all these
00:18:30
conversations need to happen they're going to be very similar to buying a home and converting it um the the process is just slightly different because you're building it from the ground up um and so you just want to make sure it's zoned properly make sure that it follows all the the guidelines for all everything else but then you can have it exactly how you want um any of these four strategies uh the the three that I talked about plus the bonus one of building something U from the ground
00:18:56
up are all strategies all different Pathways that you go as you're looking to start your Assisted Living business so which one of those is going to work best for you I don't know because I don't know you I I I've never talked to you um but if you'd like to learn more then get on Assisted Living investing. net strategy we can have a call and I can maybe give you some guidance there um at its core it's going to kind of come down to the capital that you have available um and the prices that are out
00:19:23
there um for for those different properties and how that's going to help fit into into where you want to be so capital is a big one that you want to take into account um you need to figure out what's important to you is it more important to like get something that has a faster Pathway to profitability um because you have gone and bought an existing business and now it's ready to go or is it more important for you to have something that you built from the ground up that um has everything that
00:19:49
you want in place uh in the home like which of those things is going to be more important to you that's what you need to do um and that's going to help you decide which of these Pathways is the best one for you and then the other one is your timeline so if you don't have a super tight timeline buying a home that's existing renovating it um taking the process or doing construction um one of those things might might be a good fit for you um if you want something that is a little bit more that
00:20:20
just goes quicker um because it's already existing and you don't have to go through a full relicensing process you don't have to start from Ground Zero with getting resident sent at home then buying an existing business might be the right fit for you um these are all things that you just kind of want to question yourself and see you know which one of these is going to work best for me and and help me get to to where I want to be um that guideline and doing some self-reflection is going to help
00:20:46
you identify which of these options is best for you none of them are the best like you could pick any of them and still be successful um that's not going to be as important as making the right decis decision for you doing the research and feeling confident in what you're doing and then moving forward with that so any questions um as as we get into this and while you're typing those questions up I want to remind people to like the video subscribe and ring the bell as well we go live here on
00:21:15
Tuesdays I'm having to adjust the times a little bit because of some meetings and and moving and so things are a little bit in flux we'll get into another regular time Cadence um here in the next week or two um but uh yeah just you know subscribe and ring the bell so you get notified when I go live and then you can jump on here um those are always on Tuesdays we put our our long form stuff on Thursdays to help you out and if you have any questions need help get over to Assisted Living investing. net
00:21:43
strategy set up a free strategy session um you can get the free business planning guide which is a guide that helps you build a business plan which is that base of everything and if you feel like you need more guidance and and want some you know group coaching and and and more information then let's chat about the Mastermind uh you can find out more about that at Assisted Living investing. netmaster um it's a an incredible program I was just talking with a member of The Mastermind group um here earlier
00:22:10
today that's why I was a little bit late getting on to the live and we had such a fun conversation and I'm so excited about what she's going to be building and and how she's going to get there so uh if you want to join and and have some experience with that then make sure you uh get in there and uh you know join and we can have a conversation about what it looks like assisted living investing. netm Sorry I am losing my voice as I talk so I'm G to wrap this up I want to thank you all for being
00:22:38
here uh thanks for watching and remind you to get the free business plan checklist uh over at Assisted Living investing. netb checklist I have a bunch of other free resources we'll link those down below in the bio um on YouTube and um if you have interest in one of them um over on Facebook then message me and um I will get one of those free resources to sent over to you over there as well so want to thank you again for watching thanks for being here um does residential Assisted Living sound
00:23:06
interesting to you but you don't know how to get started at Assisted Living investing. net we're here to help beginners like you launch their Assisted Living business in the next 12 months to create that time of Financial Freedom that you're looking for um yeah and it just remember it doesn't take a lot just a little bit keep going step by step by step and I promise you if you do and you're consistent and persistent you're going to be successful again thanks for watching and talk to you next time
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