Convert a Residential Home Into an Assisted Living Facility: The 5-Step Blueprint
Jan 05, 2026
Do you own a home and feel like it could work perfectly for assisted living, but you are not sure where to start? I see this all the time, and you are not alone. Let me walk you through a clear, simple path so you know what to do next. Want the full breakdown? Watch the video belowπ
Start With a Strong Foundation So You Do Not Get Stuck Later
Every successful assisted living business starts with a solid foundation. I have seen people rush ahead without one, and it almost always slows them down later. You want to begin with a basic business plan, even if you are not using a lender. This helps you think through how the business will actually run day to day.
You also need to look at the market. This means checking if your area is oversaturated, understanding your state licensing rules, and confirming your home truly fits assisted living needs. Then comes underwriting, which is just a clear way to see if the numbers work. How many residents can you have, what can you charge, and what will your monthly expenses be?
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Write a simple business plan to guide your decisions
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Research your local assisted living market
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Run the numbers to see if the home can be profitable
π‘ One thing I see a lot is people creating an LLC and thinking they are making progress. An entity is helpful, but it is not the step that moves the business forward.
Make Sure Your Home Truly Works as an Assisted Living Property
You are already ahead because you own the home. That is a big advantage. But you still need to confirm it meets the rules for assisted living. This is where zoning, fire safety, and occupancy limits come in.
You will likely need to talk with your city planner and fire department. They help you understand egress requirements, parking rules, and any changes the home needs. I have watched this process happen firsthand, and while it can feel confusing, it is very doable when you take it step by step.
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Confirm zoning allows assisted living
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Meet fire and safety requirements
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Understand how many residents the home can legally serve
π‘ Think of this step as preparing the house to safely support residents, families, and staff.
Plan for Capital So You Have Breathing Room
Even if you already own the home, you still need operating capital. Assisted living rarely fills overnight. You still have staff, food, utilities, and supplies to pay for while you bring residents in.
I usually suggest having three to six months of operating expenses saved. This cushion lowers stress and helps you make better decisions. If you do not have that money, this is where your business plan becomes very important. It helps you explain the opportunity to lenders or partners.
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Estimate your true monthly operating costs
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Set aside three to six months of expenses
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Use your business plan to explore funding options
π‘ Having a cushion gives you confidence while the business ramps up.
Learn the Rules Without Letting Them Stop You
Licensing and regulations scare a lot of people. I get it. Healthcare rules can feel overwhelming. But I want you to hear this clearly. It is not as hard as it looks when you take it one step at a time.
You need to know who licenses assisted living in your state, how the application works, and how to stay compliant. You also need to decide if you will work with private pay residents, Medicaid, or both. I have seen people with no healthcare background learn this, including my own family.
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Identify your state licensing agency
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Understand the application and inspection process
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Decide what type of residents you will serve
π‘ Confusing does not mean impossible. With guidance, this becomes manageable.
Launch With a Clear Strategy, Not Just Excitement
Getting licensed feels like the finish line, but it is really the starting line. Once you open, you are running a real business. You have payroll, food, activities, care documentation, and billing to manage.
This is why underwriting and planning matter so much. If you underestimate expenses, you can lose money fast. A strategic launch means you are ready to operate from day one, not scrambling after you open.
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Hire staff with a clear plan
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Set up payroll, billing, and care systems
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Track expenses from the very beginning
π‘ Assisted living is about care, but it is also about running a business responsibly.
Wrap Up
Turning a residential home into an assisted living facility works best when you follow a clear framework. Foundation first, then property, capital, rules, and a smart launch. When you take it step by step, you move faster and with more confidence.
If you need help creating a business plan for your assisted living business, check out the Free Business Plan Checklist.
And if you’re ready to figure out your next step, join me for the next Roadmap Challenge where I’ll walk you through how to get started.
Show full transcript π
Transcript
00:00:00
Do you have a home that you think would be perfect for assisted living, but you're not sure how to get started? This video is for you. Hey friend, I'm Brandon Gustafson with Assisted Living Investing. I help first-time assisted living entrepreneurs launch profitable, purpose-driven businesses, creating prosperity, purpose, and peace in their lives. Would love to help you out doing that, especially if you're somebody that owns a home and you think this is perfect for assisted living, but you're not sure how
00:00:29
to get started. into it. We're going to chat about that today. If you need some help though, make sure you stick around for the end of the video. I've got a special offer just for you to help you out as you're trying to get things figured out and launch your assisted living business. If you want to skip ahead and not wait till the end though, go to roadmapchallenge.com. It tells you everything about the program. Would love to have you in there. Again, that's roadmapchallenge.com.
00:00:50
And also, make sure you get over to assistedlivinginvesting.net. I have a bunch of free resources over there for you to help you get started and launching your assisted living business. If you're not sure which one's the best one for you, take the 30 second quiz. It's right there on the dark blue box. Click on that. It'll take you down 30 seconds and it will tell you which program that I have is going to be the best bet for you. So, go check that out. All right, so let's get into it. Today,
00:01:12
I'm going to take you through a fivephase framework that is going to teach you how to turn your home, what you have right now, just a home that you think is going to be great for assisted living. going to teach you a framework that's going to take you from I've got a home to boom, now I've got an assisted living business, and I'm going to be able to understand if it's profitable, if I can make money off of it or not. Okay, so the framework, you you need a framework, by the way. You need a
00:01:38
process to follow, and I have that process for you. And actually, really quick, I have a book. So, you can get at thebook.com. It's the profitable assisted living facility. We'll take you through the entire process as well. So, make sure you go check that out. It takes you through my five-phase process. The focus framework is what it's called. Focus is an acronym. And we're going to get through all of that in today's video to teach you exactly how that applies to you as somebody that
00:02:05
is looking to turn your home into an assisted living business. So F, the first letter in the focus framework is foundation first. So you need to have in your foundation, you need to make sure you've got a business plan. Whether you're going to use a lender or not, if you are going to use a lender, you're going to need to have a business plan. I want to see it. But whether you have that need or not, you're going to want to have a business plan because it sets the stage for this is how I'm going to
00:02:34
run my business, let you think through all of the things of running an assisted living business. Super important for you to do that. If you need some help just writing a business plan, go to assisted livinginvesting.net/bp checklist. I have a free checklist that you can use to help you get started. So, make sure you go check that out. We'll have links for that down below, by the way. Okay. In addition to that, you need to assess the market. You got to do some marketing. You got to market research.
00:02:59
You got to figure out, is this actually going to be a good fit for assisted living. There's the size and style of the home, sure, but you also need to make sure that it's not oversaturated. You need to make sure that you understand the licensing process in the state. A lot of that going back to doing your market research. You got to do that. This is is part of the foundation that you're building. You need to do your underwriting. You need to make sure that the numbers are all going to work
00:03:23
so you can see if you're going to be profitable. Like, yeah, you think your your home's great for assisted living and you're like, I have these four big bedrooms. I've got four, five, five rooms. I have three bedrooms, but they're big. I can put two in each um place. Figure out how many residents you're going to be able to put in there. Number one, are you going to be licensed or not licensed? How many residents can you put in? What's the amount that you can charge those residents? And you got to
00:03:47
figure out the expenses, which is really big. You need to understand what that looks like. If you're interested in learning more about that, type in wif w down below. I've got a video for you that takes you through the top five expenses and we'll link that for you down below. So, if you're interested in learning about those because it's going to help you out quite a bit and understanding how the finances actually work, again, type wifa down below. Okay. So, you got to do your underwriting. You
00:04:13
got to make sure you you know what's going on there. And then the last thing that you should be doing, I'm not an attorney, but I would suggest that you create an entity. Um, when you do this, one mistake that I really see a lot of people make when they're getting into assisted living is they go and they create an entity upfront. I I ask people, "What have you done to get started? I I I don't know where to get started." Well, what have you done? I started an entity. I created an entity.
00:04:37
That was cool. And I'm like, "Well, great." Like, that's not that's really not going to help you out as you're trying to launch an assisted living business. you need it for protection. Highly suggest you do it, but it is not something that is really going to push you forward. You actually could do this without an entity. It's not an absolute requirement. I I suggest it. It's not a requirement, though, for you to get your license, to get the funding. None of those things require an entity. It's
00:05:04
just a really smart thing to do. But don't get caught up in this thing where I I've got it going and I' I I've got an entity and now I'm making progress. Don't get caught in that trap. Something that I have seen with people and when you create a foundation, you're creating an atmosphere where you can go so much faster and further whether you're going to do more businesses or when you're getting to talking to lenders or going through the licensing process. When you
00:05:33
build this foundation, it allows you to go faster and further along the path. To kind of illustrate this, I I've got a story I want to share with you. So, when I was young, I used to love going sledding and tubing. I live in Utah. We we have a lot of snow here. It's the greatest snow on earth. Like, we have it tagged. So, it's true. Actually, it is. It's scientifically proven. We have the greatest snow on earth in Utah. And I loved going down sledding sled hills and doing that. But if you've ever done that
00:06:00
before, what you notice is if you're the first person going down the hill on the sled or even on a tube, you you've got to kind of scoot a little bit and you're you're just going down really slow. You're creating a path, but it's really really slow. And then the next person that goes down, there's a little bit of a path and they can go down a little bit faster. There's still a little bit of I'm going kind of slow, but I'm making a little more progress. but the third and
00:06:25
fourth and fifth and the next time you go down you're zooming and then the faster that you start going, the further you start going and it's an incredible thing. And then you can start adding little elements like a jump and you can start doing a bunch of other little extra things. You can bring people together in a chain because you have somebody that can go really fast. There's so many things that you can do when you have this path, but it didn't start out that way. You have to remember
00:06:51
where you were at the beginning. That's where you're at here on your journey. you're trying to figure out how do I get started and you've got to build the foundation. You have to build the track that's going to allow you to start going faster and start going further. So, if that is something you're just like, that's what I needed, type in snow down below. That will let me know that, you know, that's the story that you needed to hear today. But you have to build your foundation first. It allows you to
00:07:15
go faster, allows you to go further, and it's going to help you launch your assisted living business. actually have a coaching program that's called the assisted living launchpad bundle. You can go check that out for more details at assistedlivinginvesting.net/launchpad. So go check that out. It's all about building the foundation that you need to launch your assisted living business. Go check that out. The next part in this process, the focus framework is O and that stands for optimal property
00:07:41
selection. Now you are lucky you have what you think is the perfect property and that's awesome. It's a lot something a lot of people don't have as they're looking to get started here. But you also have to make sure that it is the right property. You need to make sure the property is meeting all the rules and regulations. So, while you don't have to go out and find a property, you don't have to go find a broker or a realtor to help you find a property because you already have it, there's
00:08:06
still a process for getting the house ready to go. And for you, that's going to be working through zoning. That's going to be talking to the fire department. And you need to get certain approvals in place and make sure that it's ready for assisted living and that you have the correct egress points for if there were a fire. Understand what your occupancy limits are. Uh what you can can and can't do. Are there parking restrictions? All of these things are going to happen in the optimal property
00:08:32
selection phase of launching an assisted living business. So you need to figure out a lot of what's going on. The second house that I lived in, we actually had a home next to us that had turned it into assisted living. This was before I actually got into assistant before I knew you could do this in a residential setting. But it was kind of fun to see the process that they went through. They kind of had to fumble through it. They had to do some construction to get it compliant to get the house ready to go
00:09:00
to figure out the the parking arrangements. Um they had to figure all of those things out. And the population that they were serving was a disabled population. Uh but it was a lot of fun to see the changes that they had to make to the structure of the physical facility, the physical building itself to get it ready for assisted living. And so you need to have those same conversations. And a lot of that is going to start with city planner, fire department in your local municipality and helping you meet those needs. So you
00:09:29
got to figure that out. You got to go through the process there. Again, I talk about that in the book, the the profitable assisted living facility. So, make sure you go check that out because it will help you out as you're trying to figure out who do I talk to and what questions do I ask? Teaches you that in there. Okay. The C on the focus framework is capital and funding. Now, you own the home already, right? You got a mortgage on it. Maybe you're leasing it and you don't need all of the capital that
00:09:55
somebody that's buying an existing facility like what I did on my journey. You don't need that type of capital. But I would highly suggest that when you do your underwriting, you can go to assistedlivinginvesting.net, by the way, and there's a big blue box. This is get your free underwriting calculator. It's on the website. Go grab that because it's going to help you out a lot as you're going through that. But when you do your underwriting, you need to figure out what are my monthly
00:10:20
expenses going to be? What do I project them to be? And then I would highly suggest that you have three to six months of operating capital in the bank for when you're trying to bring residents in and you have to still pay for your staff and buy food and and all of the things that you need to do to launch a successful assisted living business where you're meeting the needs of your residents. So, you're going to need some kind of funding and maybe you have that. In which case, then cool, you
00:10:45
may be able to skip over this phase. But if not, and you're like, "Wow, that's a good idea. I should get that money. Where am I going to get it?" You're going to need to have that business plan that we talked about in in the first phase and you're going to need to take that and create a business case for I need $50,000 whatever the amount is for you and you're going to go take that to a lender. Now, what are the types of lenders that are out there that can help you with that? Could you create
00:11:11
partnerships that can help you get the the funds that you need there? Like what what do you have in front of you that you're just like, "Well, I need this. I need money. How am I going to get it? you know, I bought this house and is it's great, but god, how do I figure out the rest of it? How do I convince a lender to give me funds for operating capital? In my roadap challenge, go to roadmapchallenge.com, by the way, uh to learn more about that. We talk about the cash compass, what I call the cash
00:11:36
compass. And in there, if you're interested in learning more about it, just type in cash down below. We'll get you a link to the road mapap challenge in the comments. But in the cash compass, there are so many different ways for you to get the funds that you need. And we go through that to help you understand exactly what you need as you're trying to launch your assisted living business. Um, it's big. It's super important for you to get the funds that you need so that you have a cushion
00:12:03
because it can take you a while to ramp things up and get residents into the home and get the funds that you need. And so having that cushion is going to make your life that much easier. So highly suggest you do that. Now the U in the focus framework is understanding the rules and regulations. And this is something that so many people and probably you if if this is you just type in rules down below because this is the thing that licensing and understanding healthcare and everything that goes into
00:12:31
that is confusing. I have a masters in healthcare administration. I have worked in the healthcare industry since 2013. I'm very familiar with healthcare and and how it works, but I also understand it is confusing as I'll get out to to so many people because there there's just like, oh my gosh, there's more red tape over here. I thought I figured that they changed the regulation. Like, these are the types of things that you're going to experience as you get into this business. You have to understand the
00:12:58
rules and regulations. You need to understand who's the licensing body to help me out with assisted living. What's the process like to fill out the application? How do I maintain my license as I get moving through this? Do I want to work with a Medicaid population or not? And if you do, by the way, type in Medicaid down below and we can I can point you to some resources there. But you need to figure all of these things out and it can be overwhelming and confusing and just like I don't know what I'm getting into.
00:13:26
So, it's I will tell you this though, it's confusing. It's overwhelming. It's also not as hard as you think it is. Okay? So hopefully I'll lean in and tell you that it is not as hard as you think it is to figure out the licensing. My dad who I partnered with works in the construction industry, no experience in healthcare. And as we have been doing this now since 2020 and it's it's not taken him, you know, 5 years to do this. It probably took him a year, year and a half. But he now knows as much if not
00:13:57
more about the specific little intricacies about the states that we operate in than I do. my knowledge is a lot more broad and I I can handle a lot of those things, but he has built relationships with the different payers that we work with and does our Medicaid billing and does processes to maintain our license and he doesn't have that background and he's learned all of that. So, it's something that yes, it's overwhelming. It's scary. It's something that's just like I I can't figure that out. That I I
00:14:24
don't want that's the thing that's stopping me. But, I'm here to tell you that you can learn those things. My dad who 60 years old when we started older than that [laughter] um he has been able to learn those things. So old dogs can learn new tricks when it comes to understanding the rules and regulations. You just have to put in the time and effort and you'll be able to figure it out. Okay? It's confusing but if you have a guide can help you out. That's what I do in the roadmap
00:14:52
challenge. Go to roadmapchallenge.com then you can figure this out and you can can make some progress. So, make sure you are getting help as you're trying to progress there. Okay. The S in the focus framework is having a strategic launch. And I've told this story a bunch of times, but if you're new here and you this is the first video of mine that you're seeing, what you're going to realize is, you know, at one point you're trying just so hard to get your house licensed to get to the point that
00:15:21
you now have a facility. You got your staff, right? You've hired the right staff. You've gone through the process there. And that that's a whole thing by itself. But you've gone through the licensing process. You have the funds. You made sure the house was perfect. You opened the facility. You hired your staff. And then it hits you. Oh no. I have dozens of lives that are relying on me. I have my residents and their families and my staff and their families. And I've got to make payroll
00:15:47
and I've got to buy food and we got to do activities for our residents. I've got to do all of these things. And like, okay, I'm going to work with Medicaid. That's a whole thing. How do I track the amount of work that we do? I need an EHR system. If you're interested in EHRs, type in EHR down below. But I need those things so I can track what's going on so that I can then get reimbursed for the care that I'm providing. I've got to find collection methods to get paid from
00:16:13
my residents. I need payroll. I need to plan meals. Like there's there's so many things. I remember we purchased our assisted living facility in Colorado and we went out that night and we celebrated and and you should if you've gotten to that point. Um, and then I woke up the next morning and it was super exciting. And then we went and we met with our administrator and she's asking questions like, "Well, what payroll system are we going to use and where's the bank?" And
00:16:39
she's asking me questions that I had thought about, but it had never like clicked in my mind like, "Oh, I need these things now." And then first payroll comes and it's like how much is it and I have to do this every other week now and how much is groceries like these are things this is the reality of running this business you need to understand the expenses why underwriting is so important it's why going back to the foundation that you need to build first and understanding your numbers and
00:17:07
underwriting is such an important part of what you're doing because if you don't do that correctly and you don't understand those expenses and all of a sudden you were thinking oh it's only going to cost me $12,000 a month to run this business when in reality it's probably double or triple that amount. You have to understand what that looks like or you will lose money and you'll put yourself in a really bad situation. So, please don't do that. Go to assisted living investing, grab the underwriting
00:17:32
calculator, do some underwriting, go to the roadmap challenge. We do basic underwriting for you in there in a class setting in a workshop so you can understand what the big numbers are and how to interpret them. Make sure you do those things because that's going to allow you to be successful. I don't want you to get into a spot where I think I have the perfect assisted living facility. Oh, cool. I got the funds. I did the licensing. I've got this facility. And then forget that you also have to run a business at the
00:18:01
end of it cuz you do. You have so many lives that are relying on you as the owner and the operator of the business. So, make sure you don't forget that. Okay, that was a lot. That's the focus framework though. I teach that in a few different areas. One is the success system. If you are interested in learning more about that, go to aliquiz.com. I have a 30-cond quiz tells you which program, but I also teach about it in the roadmap challenge. Um, and and what that all is going to look like. And
00:18:30
obviously in the book, the profitable assisted living facility, go to the alibook.com. But to recap what we've talked about today, you've got to follow a framework. The focus framework is the process you should be following. Foundation first, optimal property selection, capital and funding, understanding rules and regulations, and having a strategic launch. And when you follow that process, you follow that framework, it makes everything so much faster. If you remember the story about the snow and
00:18:56
the sledding, you're going to go faster and further when you build your foundation. And when you have a framework that you can follow, I would love to help you and coach you. I'm going to I told you at the start of the video, I have special offer for you. it is to join my next roadmap challenge. We have one coming up soon. Go check out roadmapchallenge.com for the details and when we're starting and and everything that's included in there. But the roadmap challenge, it's not a sales call. It's not a webinar
00:19:22
that I'm pushing you into another program. It is a coaching program, a coaching experience. We get together for an entire week. we work together and I help you build the road map, a milestone road map that's going to help you get to the point where now I have confidence in what I'm doing and I know where to go and what steps to look for and which pitfalls I should be avoiding. I love coaching people. This is one of my favorite things to do and that's why I've created the challenge because it
00:19:48
lets me get in front of you in a live atmosphere and teach you and answer your questions and help you get unstuck and it's super affordable. I would love to have you there. Make sure you go check it out, roadmapchallenge.com. I would I would love to have you there. It's so much fun to be in there and see lights go off. And people, prior to to getting into YouTube and assisted living, I taught courses at the University of Utah and I loved it. It was so much fun for me. But as an adjunct professor, you don't make any
00:20:16
money [laughter] and that was a lot of time. And I was had a growing family. I had to drive up to the University of Utah. It was not convenient. But I I love coaching people and that's what I've created this challenge for is it gives me the opportunity to coach people like you and see light bulbs going off in your eyes as you are learning things in your that's what I can do. That was the piece I was missing. That's what I want to do for you in the road map challenge. So make sure you go check it out. Also make
00:20:40
sure you like the video, subscribe, ring the bell as well so you get notified every time we put out content like this. We put out lives on Tuesdays. We do content on Thursdays as well. Um go to assistedlivinginvesting.net net so you can get access to the free resources we have there, including our underwriting calculator that I mentioned a couple times here in this video. Make sure you get get that. And remember, it doesn't take a lot, just a little bit. Just keep going step by step by step. And I
00:21:03
promise you, if you do and you're consistent, you are going to be successful. Thank you so much for watching and have a great day.
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