Buying vs. Converting: Best Path to Start Assisted Living Home
Feb 10, 2025
Starting your own assisted living business is exciting, but there’s a big decision you need to make right away: Should you buy an existing facility or convert a home into an assisted living space? Both options have their benefits and challenges. Let’s break them down so you can make the best choice for your goals!
Check out the video, too:
The Importance of a Business Plan
Before diving into the details, take a moment to create a solid business plan. This will help you understand your goals, budget, and vision. Not sure where to start? Use resources like the Business Plan Checklist to outline your strategy, or get the Launchpad Bundle to help map out your costs. A clear plan makes everything easier!
Buying an Existing Assisted Living Facility
The Pros
- Instant Operations
When you buy an existing facility, it’s already up and running. You’ll have:
- Trained staff in place.
- Residents providing immediate income.
- Systems like meal planning and medication management already set up.
-
Simpler Licensing
You can often skip the long licensing process by completing a Change of Ownership (CHOW). -
Grandfathered Regulations
Older facilities may be exempt from newer, stricter regulations, saving you time and money on upgrades.
The Cons
-
High Upfront Costs
You’re buying more than a building—you’re buying a functioning business. That premium price can be a big investment. -
Seller Dynamics
The seller may stay involved after the sale, which can create tension. Set clear boundaries to avoid conflict.
Converting a Home into an Assisted Living Facility
The Pros
-
Tailored Design
Starting fresh means you can design the home exactly how you want. From modern decor to the perfect layout, the space will reflect your vision. -
Lower Purchase Price
Buying a residential home is often cheaper than purchasing a fully operational facility.
The Cons
-
Long Licensing Process
You’ll need to apply for a new license, which includes inspections and approvals. This can take months (or longer). -
High Renovation Costs
Turning a house into an assisted living facility requires big changes:
- Adding ramps and widening doorways for wheelchair access.
- Installing fire sprinklers and upgrading bathrooms.
- Meeting state and city safety regulations.
- No Immediate Income
Since you’re starting from scratch, you’ll need to cover all the costs—like renovations, payroll, and marketing—before residents move in and revenue starts coming in.
How to Decide What’s Right for You
Your choice will depend on your goals and resources.
-
Buy an Existing Facility if:
- You want to start earning profits sooner.
- You prefer a simpler licensing process.
- You’re comfortable paying more upfront.
-
Convert a Home if:
- You want to design a custom space that matches your vision.
- You’re okay with waiting longer to open.
- You enjoy renovation projects.
Pro Tips for Both Options
-
Check Zoning Laws Early
Make sure your property is zoned for assisted living. -
Work with the Fire Department
They’ll inspect your property and tell you what changes are needed for safety compliance. -
Build a Team
Whether you’re buying or converting, you’ll need a team of experts, like contractors, legal advisors, and accountants, to guide you.
Final Thoughts
Both paths—buying or converting—can lead to a successful assisted living business. What matters most is aligning your choice with your goals, budget, and timeline. Do your research, involve professionals, and take one step at a time.
Whichever route you choose, you’re building a business that makes a difference in people’s lives—and that’s what truly matters! You’ve got this!
Need Some Help?
Starting your assisted living business is a significant step toward achieving financial and time freedom. Whether you purchase an existing facility or convert a home, the key is to move forward with a plan and consistent action.
To help you get started, download our Business Plan Checklist. This resource will guide you through the steps of building a solid business plan.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:00
hey friend I'm Brandon Gustafson I help beginners like you launch their Assisted Living business in today's video we're going to be talking about kind of a versus series of buying an existing business versus converting a home into an assisted living home which one's going to be best for you if you're interested in that make sure you stick around for today's [Music] video hey before we get started want to remind you to get over to the website and get access to our free underwriting
00:00:29
calculator we're going to have links down below for that so make sure you get over to that and grab that free resource it's going to help you figure out if you've got a good opportunity in front of you or not if it's going to be profitable or not so go check that out now let's get into the video for today which is the best option for you purchasing an existing business versus purchasing a home and doing a conversion to turn it into an assisted living home it's a question that a lot of people
00:00:55
have and it's really hard to understand what you want to do I want to tell you a little bit about the base the first thing you need to do before you get started with any of this it is building a business plan and in building that business plan you're going to get clarity for yourself on what you want to do and this is going to help you understand which of those options are going to be best for you purchasing an existing home versus the doing the conversion I actually have another resource the assisted the business plan
00:01:20
checklist we'll link that down below Assisted Living investing. netb checklist and I have I have another one down there so go check it out on YouTube there's some really good resources to help you understand if you got the right investment those are free resources if you want something that's going to help you out in building that business plan check out the business planning guide Assisted Living investing. net BPG sorry all those things just kind of came to mind as I was thinking about this and
00:01:44
helping you get started because they are the base of what you need to really move along so let's talk a little bit about some of the pros and cons that come with each of these decisions let's start off with purchasing an existing facility and let's talk about why this is an option you should consider why you should go about purchasing an existing business rather than buying a home and doing conversion on it there's quite a few actually one is the operations it's already operating you already have the
00:02:10
staff you already have the residents you can kind of get there you have a quicker path to profitability because of that you have all the people in there they're already paying you it goes very quickly the change of ownership process the Chow process that you go through to get your license can be quicker than getting just a normal license so you can go through that a little bit quicker as well which is great and you can get grandfathered into some old rules I'm I'm going to link up a video about getting
00:02:36
grandfathered in I'm going to tell you like it's one of my least watched videos so I need you to go watch it and so go check that one out it actually goes through a lot of good information about getting grandfathered in so go check that one out cuz it's going to help you out quite a bit now let's get into some of the cons why you shouldn't buy that existing business it's going to probably be a little bit more expensive cuz you're you're buying a home that's licensed that has a business that has
00:02:59
money already coming into it so you're likely going to be paying a bit of a premium to be able to get access to that the other one is you're going to have to negotiate a little bit and if you don't like that it can be not fun for some people I enjoy it but some people don't and being able to negotiate there with and dealing with a previous owner as you go through the sales process can be difficult or after you complete the purchase dealing with them not wanting to completely let go or maybe coming
00:03:28
around to the house every now and then those are things that I've dealt with in owning my businesses and having very Frank conversations with the previous owners like you got you can't come to the house anymore I'm sorry I know you love the residence but we're not doing that it's just creating too much confusion there so you have to have some of those hard conversations that's one of the reasons why buying an existing business might not be the best for you frankly there's not a lot of them though
00:03:52
that's about it it can be more expensive and then just kind of dealing with people it's something you want to be aware of now let's talk about buying a home and doing a conversion or even like leasing from somebody I I kind of put those a little bit in the in the same bucket here as we talk about this let's talk about why you might want to do that number one is you're going to be able to renovate it to the current standards it's going to be really nice and those Renovations are going to cost money
00:04:15
we'll get into that here in a second but it it it's one of those things where you can get it to be kind of how you want it to be inside the home and and have it be nice and get it to a spot where it feels really comfortable and that's not always the case with opportunity ities where you're buying an existing facility so being able to customize things a little bit more is actually a really nice thing and it's probably going to cost you a little bit less because you're not
00:04:40
buying the business that's already up and running and and all of those things so you might save a little bit of money when it comes to buying an existing home and doing a conversion on it which is something that everybody wants to do uh save a little bit of money now let's talk about the reasons why you may not want to do a conversion on a home the reasons you wouldn't want to do it is now you got to do a brand new license which can be it can take longer than doing a chow process you've got to put everything
00:05:06
together they scrutinize you a little bit more as you're going through that process because you're brand new the inspections that you have to get and the approvals that you have to get are going to be more heavily scrutinized as you go through that process so it's something you kind of want to keep in mind that you know if you're okay with that and you're comfortable with it then go for it it's not that bad but it is easier to go through a child process for sure than getting the initial license paperwork's
00:05:29
easier it's going to cost a little bit less um all of those things are are big that you want to consider another thing that you want to take into consideration is the potential for costly and lengthy repairs so if you are doing a conversion on a home and you've got to make it wheelchair accessible we talked about this in a previous video as well uh then you want to make sure that you you might have some repairs that are going to take a while and they could cost a lot of money and things like that so you want
00:05:54
to just kind of keep that in mind that yeah the house itself might be less but if you've got to do all these other repairs pairs you know that Gap is is shrinking quite a bit and then the other thing that for me is is really the biggest reason why I would prefer to buy an existing business especially in the beginning is you already have the staff in place when you buy an existing business when you are doing a conversion you have no staff you have no residents so you have no money coming in and you
00:06:20
still have to pay staff and you got to make payroll and get those things up and running um your pathway to profitability is much longer when you go through that process but those are kind of the pros and cons between those two options and why you may or may not want to choose one over the other so which of those is best for you it depends it really does what I would say is think about it like sit back do that business plan that I talked about at the beginning that's going to help you get some clarity on on
00:06:48
what you want to do that's why I made sure I I got it in there upfront because when you get that Clarity on what you want to do and what how you want to build this it's going to help you make the right decision as you go into this and the other thing is like think about it which one are you most excited about like do you love Renovations and you want to do things from the ground up then go the route of a conversion or building a house from the ground up like go that route that's what's you're
00:07:14
passionate about do it or if you want a better Pathway to profitability and you want it to be a shorter process and kind of more of a guaranteed thing if if you want to say that then buy an existing business think about that which one is more appealing to you and go that route regard regardless of what you choose though you're going to want to make sure you have a conversation with the city planner make sure zoning is in place probably have the fire department come check out the house as well make sure
00:07:38
everything's good from that standpoint as well because you don't want to run into any hiccups that could derail you down the line you don't want to get started where you have a house and you think this is perfect for assisted living and then you find out you can't do it there that's not a good thing okay so to recap this we've been talking about the pros and cons between buying an existing facility versus buying a home and doing a conversion on it which one is best for you and how you can decide that if you
00:08:05
found this video helpful make sure you like the video subscribe and ring the bell as well CU you're going to get notified every time we go live on our Tuesday calls when we do our Thursday long form videos like this one and giving you the information that you need because at Assisted Living investing my goal what I'm trying to do here is help beginners like you launch their Assisted Living business in the next 12 months it's what I want to do it's what I love doing so the more that you get in here
00:08:29
interact and and and share this content with people the more likely people are to find it and help them Reach their goals um in moving things along I have a bunch of free resources on the website as well so get over to Assisted Living investing. net we have links down below for all of the free resources there the calculator business plan checklist all of those things are on there so go check those out if you need help with building that business plan building that Foundation check out the business
00:08:54
planning guide Assisted Living investing. netb PG it's going to give you the guidance that you need to help you get started there and if you feel like you need a little bit more check out The Mastermind program I love this program I love interacting with people there go to Assisted Living investing. netm Mastermind to learn more about that we'll have links down below for that and if you're like I I feel like it' be a good fit but I'm not 100% sure reach out and we'll have a free strategy session
00:09:16
Assisted Living investing. net strategy is how you can get access to that I'm not going to try to push you into it I really genuinely want to see if we're a good fit for each other or not and if we're not then that's cool you can keep watching videos and you know a few months few years we can re re-engage about that conversation but I love helping people love getting people on the path to ownership and reaching their dreams does residential Assisted Living sound interesting to you but you don't
00:09:42
know how to get started at Assisted Living investing. net we're here to help you through the process start to finish to help you reach those time and Financial Freedom goals that you have so you can get what you want out of your life I want to remind you as well to keep going keep making progress step by step by step if you do and you're consistent and persistent I promise you you're going to be successful thanks for watching and have a great day [Music]
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