How Much Money Do You Need to Start an Assisted Living Home?
Jul 22, 2026
If you're thinking about starting an assisted living home, one of the first questions that probably comes to mind is, "How much money do I actually need?" I hear this question all the time, and it often stops people before they even take the first step. The good news is that you do not need to guess. Once you understand where the money goes, you can make a clear plan.
Want the full breakdown? Watch the video below👇
You do not need the same amount of money as everyone else
One of the biggest mistakes I see is people asking for one magic number. The truth is, there is no single answer. The amount you need depends on the type of assisted living home you want to open, where it will be located, and how you plan to get started.
For example, starting a small residential assisted living home is very different from opening a large facility. Your startup costs will change based on the home you choose, licensing requirements, renovations, furniture, staffing, and marketing.
âś… Start by deciding what kind of assisted living business you want to build before trying to calculate your budget.
Focus on the major startup costs first
Instead of worrying about every small expense, focus on the big categories that make the biggest difference.
These usually include:
âś… Buying or leasing a property
âś… Renovations to meet licensing requirements
âś… Furniture and equipment
âś… Licensing and permits
âś… Insurance
âś… Marketing
âś… Working capital to cover expenses while residents move in
When you understand these categories, you can build a realistic budget instead of guessing.
đź’ˇ I have found that people feel much more confident once they can see exactly where their money will go.
You may not need all the money yourself
Many people believe they must have every dollar saved before they can start. That is not always true.
Depending on your situation, there may be funding options available. Some entrepreneurs use traditional financing, while others partner with investors or use different lending programs. The right option depends on your experience, financial situation, and business plan.
The important thing is not to assume you cannot afford to start before you explore your options.
âś… Learn what funding opportunities are available before deciding that money is your biggest obstacle.
A solid business plan makes everything easier
Whether you use your own savings or apply for funding, a business plan is one of your most valuable tools.
Your business plan helps you understand your startup costs, estimate your future income, and explain your vision to lenders or investors. More importantly, it gives you a roadmap so you know what to do next instead of feeling overwhelmed.
I have seen people delay their dream because they were waiting until everything felt perfect. In reality, progress comes from making one good decision after another.
đź’ˇ You do not have to know every answer today. You just need a plan for your next step.
Keep moving forward one step at a time
Starting an assisted living business can feel like a huge project, especially when you're thinking about money. But every successful owner started exactly where you are now, asking questions and looking for answers.
Don't let uncertainty keep you from moving forward. Learn what your costs will be, understand your funding options, and build a business plan that gives you confidence. As you continue learning, each step becomes easier than the last.
âś… Stay consistent, keep learning, and keep taking action. Small steps today can lead to a successful assisted living business tomorrow.
Wrap Up
You do not need to know everything before you get started. What you do need is a clear understanding of your startup costs and a plan to move forward. Once you have those, you can make smart decisions and build your assisted living business with 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 👇
Transcript
00:00:00
Are you interested in assisted living, but you're just not sure how much money it's going to actually cost you to get started? And that's the thing that's holding you back because you don't even know, like, do I have enough money with me right now? Do I need to get funding? Can I get funding for this? What does that process look like? And these are all the questions that are going on in your head right now, and you're just unsure of what you need to do to move forward. Well, this video, how much
00:00:25
money do you need to start an assisted living home, is going to help you out as you're trying to figure out if this is going to work for you from a financial standpoint, if you have enough money today, or if you need to go get more money to help you get started on your journey. So, if that's something you are questioning and you're trying to figure out, then make sure you stick around for today's video so I can help you out as you're trying to figure out how much money it actually is going to take to
00:00:50
get you started on your assisted living journey. Hey friend, I'm Brandon Gustafson with Assisted Living Investing. I help healthcare workers start their own assisted living business so they're not stuck trying to figure it out and know exactly what they should do next. Make sure you get over to the website assistedlivinginvesting.net or check below in the description so you can get access to a bunch of free resources and tools to help you get unstuck and help you start moving forward. Let's get into our topic for
00:01:15
today. Today, we're talking again about how much money do you need to start your own assisted living business. And the thing that I want you to realize is there are quite a few expenses that a lot of beginners are going to forget as they are trying to get started on this journey. Cuz a lot of people think, "Oh, I just need to get the funding, you know, I I I I I just got to get however much money, a million dollars, to start my business so I can go buy the home, and like, that's all I need." And
00:01:44
I don't know how much I need for a down payment, but that's the only thing that I need to do. There are actually a few different expenses that a lot of people forget about as they are getting started. And so, I want to outline those for you so you know what to expect. And this is money that you may or may not be able to incorporate into a loan that you get. So, you might have to have this in addition to your down payment. Just kind of depends on where you're at um in the process and what it looks like. This is
00:02:09
actually why I really like buying existing facilities because you can easily ask for additional operating capital and sometimes some of these things are already done, so you don't have to worry about them. But, these are the big things that a lot of people especially beginners are forgetting about when they get into it. One is operating capital. And by operating capital, what I mean is in the beginning as you are getting your business up and running, you are still going to need to make payroll. You're
00:02:35
still going to have to buy food. You're still going to have to pay the bills, you know, the utilities, the keep the the power on and the gas bill and the water bill and all of those things. You're still going to have to do those things. And so, you need operating capital. I suggest that people get between two and six months of operating capital and have that just in the bank as reserves so that you can draw on it, so you don't stress yourself out as you're getting started with this. If you
00:02:59
need some help with this, just type in calculator and I'll get you a link to my free underwriting calculator so you can kind of go in and see a little bit of what this looks like and start doing projections on it. I think it'll help you out quite a bit. Uh again, just type in calculator down below and we'll get you that link or you can just go find it in the resources down below this video. But, what I would suggest is you have two to six months that you can just draw on. It makes your life so much easier. I've
00:03:24
done this with multiple businesses, assisted living, non-assisted living. And when you have that money that you can draw on, it makes everything just go so much easier. Makes the stress of trying to run that business it it reduces it significantly and will make your life a lot easier, make you happier as you're trying to to get into this. So, take into account that you're going to want to have some extra operating capital up front. Second thing is a fire suppression system. Now, when you think
00:03:51
fire suppression system, you're probably thinking, oh, sprinklers in the ceiling, right? And that could be the case for you, but there are a few different options. There's actually two different types of fire suppression that you need to have. If you're interested in learning more about that, just type in fire down below, and I've got a video that I can kind of give to you that explains a lot of the information about fire suppression systems and how they work. But, in some instances, you
00:04:14
actually don't need a fire suppression system up in the ceiling. What you need is a bunch of fire extinguishers. When I was getting started, uh actually, I had already I owned my two facilities and was looking at doing another facility that was kind of local to me, partnering with a real estate investor, and we were I was going to bring the the assisted living expertise. She She had the house, and we're going to partner on this. As we started looking through this and talking to the local fire department and
00:04:37
figure out what we needed, what we found in that instance was we actually didn't need to put in a fire suppression system in the ceiling. We're just going to have to have fire extinguishers and upgrade the smoke detection system in the home. So, this actually wasn't going to cost us very much, just a few hundred dollars compared to thousands of dollars for a full sprinkler system. So, you will want to do your research and see what you actually have to put in the house. And but, if you need to put a
00:05:02
fire suppression system in, they can be costly. They can be thousands of dollars to put in, and it can be invasive. It can take quite a bit of time. So, make sure you're paying attention to that. And the third thing that a lot of beginners are forgetting is licensing. When it comes to getting started, especially if you're going to be a licensed facility, you're going to need to pay the licensing fees. Typically, those fees are a base fee at the beginning, depending on the type of license you're going to get, the type of
00:05:30
home you're going to have. So, let's say it's $5,000. It It could be more or less, depending on your state, but 5,000 is probably middle of the road. And then, you're going to have to, on top of that, pay a fee per bed that you're getting licensed for. So, let's say you have 10 beds, and it's going to be $300 per bed that you want to do the license for. That's an additional 3,000. So, your entire licensing fee is going to be about $8,000. That's a fee that a lot of
00:05:56
people don't realize is going to come up as you're getting started if you want to be a licensed facility. So, you want to take that into consideration. Some of these things, if not all of them, you can actually build into a loan if you know how to ask for it the right way. And that's what I teach in my Foundation Builder Program. So, if you're interested in learning about that, how to build a business plan that's going to allow you to get a million dollars in funding and take care of these big
00:06:21
upfront costs, then type in foundation. We'll get you a link to that program. But, I'm going to help you out as you're trying to build those things to get you ready so that when you need to go and ask for funding, you have everything that you need to go forward with confidence and get the funding that you need to buy the facility, to do all these upfront costs, and help you get started. Okay. So, let's talk a little bit in addition to those things that those beginners are forgetting, you're
00:06:47
also going to need to have a down payment for the house, or you might need to remodel. And then, we just want to kind of give you a good comprehensive view of what this is going to look like for you. Okay. So, if you are buying a home, whether it's an existing facility or a home that you're going to convert, you're going to have to have a down payment. If you're going to use more traditional funding or even like hard or private money to get into this, you're going to have to have some kind of a
00:07:12
down payment. That down payment amount is typically going to be somewhere between 10 and 30% down is what you'd be looking at. So, on a million-dollar property, I use a million dollars cuz it's a nice even number. Um, you could have something more or less, doesn't need to be a million dollars, but it's good for illustrative purposes. So, if I'm doing a million-dollar home, 10% down is $100,000. That's what I need to have in the bank so I can put as a down payment. Now, you may not have $100,000,
00:07:41
but if you build things right, build your foundation the right way, you're going to be able to go confidently to a potential partner and say, "Hey, this is what I want to do. Can we work together? Do you have a hundred thousand dollars that we can work through this?" And that feels scary, right? Uh to to think through that. But, I promise you this is actually how I got started. If you do that, you talk to the right people, you're going to find people actually have money that they can invest in this.
00:08:07
For me, it was my dad. For other people that I've talked to, it's been friends, family friends, neighbors, people that they go to church with, you know, whoever it is. You're going to have people in your network that are actually looking for places to put this money. You just need to present it to them in the right way. Okay. Now, if it's 30% down on a million-dollar property, that's 300,000 dollars. So, it's a pretty big gap, right? But, regardless of the amount of money that it might be
00:08:33
that you need, going and finding people, finding partners, using other people's money to help you achieve your goals is one of the best ways to get into this, especially if you don't have money. But, you need to put in the work and show that you are confident in what you're doing. You have to build your foundation. Again, type in foundation, I'll give you details on the Foundation Builder Program, so you can see if it's a good fit for you. But, it is the best way to build your foundation so that you can then go
00:08:59
to partners, go to lenders, and and move forward with confidence that, "Hey, I have a plan and we can get the funding that we need so we can have a successful business." Okay? So, we're going to teach you all of that there in that program. Now, the other thing that I want you to take into consideration when you're getting started are remodel and renovation uh type fees. So, we've talked about the down payment. We've also talked about licensing costs and and what to expect there. I know.
00:09:25
But, when it comes to remodel, this is where you're going to talk to the fire department. You need to talk to them to get a certificate of occupancy is what it's called in most states. But, that certificate of occupancy, it's like if you ever go into a fast food restaurant and there's a little plaque by the door that says maximum occupancy 55 people or something along those lines, you need the equivalent of that for your assisted living facility. That comes from the fire department.
00:09:52
And what they do is they go in, they look at it and they say, "Yep, you can have X amount of residents based off of what we're seeing here and you're going to need to do one, two, three, you know, these three things that you need to do." Could be a fire suppression system, could be like uh grab bars in the bathrooms, could be wider doorways or wider hallways, or maybe you've got to take out some of the flooring and put new type of flooring in to make it ADA compliant. They're going to give you what equates
00:10:17
to a punch list. They don't call it this, but it's basically here's the three, five, 10 things that you need to do on your house so that you can get the certificate of occupancy, which you're going to need so you can get the license. So you're going to need to have that conversation and that punch list then becomes your list of remodel, renovation items that you're going to have to do and then you're going to have to take that and that's going to be statistically a startup cost to help you
00:10:44
get uh into the facility and get things up and running. Again, this is why I like buying existing facilities. Most of the time all of those things are done. Those remodels, those renovation type costs, you don't have to worry about them. You might have to do a little bit. Like we purchased our facility in Idaho and what we found as we were getting ready for it is one of the bathrooms we needed to actually flip the door and it was an on-suite type of a bathroom. We needed to close that off and do an opening on
00:11:11
the other side and put a shower in there so that we could meet the requirements in the city where we were doing our facility at. So it was a five, $10,000 project that ultimately what we did, cuz we're buying an existing facility, is we had the people who were selling to us do the renovations and we just added an extra $10,000 to our loan in what we're going to pay them at closing and so it just kind of got wrapped into our loan so we didn't have to pay for it. These are the really cool things that you get
00:11:40
to see when you're buying existing facilities versus buying just a typical home cuz you probably wouldn't be able to do that with a typical home. Be a little bit too hard but you can leverage some of these things as you're getting into it but you want to make sure that you're aware that hey, these are things that you might need to have. Now as you're going through this and you're trying to figure out how to get the funding to do this, what you need to do is have a solid business
00:12:05
plan. The reason why you need to have this and every lender that you talk to is going to want to see this and a partner a good partner is going to want to see your business plan as well. The reason why is it shows that you're serious about the opportunity that you have in front of you that you have thought about this that you thought through the entire process and that you know what you're doing. It's a standard procedure a lenders partners are going to want to see this thing but it also it's going to give you
00:12:32
confidence that hey, this thing that I want to do, it actually makes sense like it's a real business. I can see myself running this business. I can see myself getting the money to do this thing that I can see that I'm going to actually be profitable. Gives you confidence it's a an incredible gut check that hey, can I do this? Yes, I can. I'm going to move forward. Now I have a lot of confidence and I'm going to crush it. I'm going to have something that tells me that that we're
00:12:58
going to really make this work really well. This is why you need to have a business plan. It's going to help you outline all of those expenses that you need to have up front to figure out how much it's going to take you to get started. It's going to allow you to go to a lender and be like, I need an extra $100,000 for these renovations and this is exactly what I need it for. The more clear you are when you're working with a lender by the way, the more likely they are to say, yeah, like that makes a ton of
00:13:27
sense. Let's move forward with it. Let's let's get working with it. And then it gives you the confidence that this is going to work for me and and I've made a really good decision here. So, what you have to do when you're asking for money, whether it's a partner or a lender, is you have to prove something to them. You have to prove that you have thought through the process. That this isn't just like something that you watched a YouTube video and then like 10 minutes later you're like, I want to do it and
00:13:54
give me money. You have to show that you have gone through the process, that you've thought through things, and you have a business case that this actually is going to work. You've done the market research, you've run the numbers, you feel confident in it, you have a plan for how this is going to be successful. And it also is going to prove that you can be profitable with this business. They're not going to give you money. Nobody's going to give you money if you can't prove that you're going to make
00:14:22
more money with it and be able to pay down that loan. This is why it's absolutely crucial for you to have that. So, again, type in foundation down below if you want to uh learn more about the foundation builder. I help you build these things. I help you create the business plan, help you do the underwriting, help you do the market research, and that is going to be the thing that's the catalyst that you need to be working on right now. That's going to shift you ultimately into owning your own assisted living
00:14:47
business, but you have to build that foundation first. I have a few other free resources down below, so just go check down in the description down below or you can type in calculator for my underwriting calculator or BP for my business plan checklist. If you type in one of those things, we'll get you the link for it. Those are free resources, but the foundation builder program is where all of this comes together, magic happens, and we're really helping you build this thing so that at the end of
00:15:12
the 10-week process of that course, of that program, you have the thing that you can take to a partner or a lender and you can say, "I need a million dollars and this is why and this business is going to crush it, and I have every confidence because I have run the numbers, I know they work, I have done the market research, I know there's a need here, and I have a plan for how this is going to work, and that's going to shift you into the next mode of running your business. So, the question I want you to ask yourself is,
00:15:39
how do you know whether to wait or move forward with this? Because I think you're probably at this point thinking to yourself, "Funding, it's heavy. Like, it's hard. I don't know how to get it. I don't have the funds. There's no way I can get started in assisted living." I hear from so many people that's what they think. "I can't get started because I don't have the funding. I want to do this. I could do it better than anybody else, but I don't have the money. I
00:16:05
can't get started." And I want to shift a little bit of a belief for you. That's not true. You can get started. Like, today. You can get started. When I say get started, I don't mean you run the facility today. That's not how you get started. That's skipping to step 100. You have to start at step one. You have to start at the very beginning. You have to build your foundation, and everything else is going to build off of it. Starting an assisted living business does not start when you open the doors.
00:16:39
This is not an overnight success. This is something that you have to put in the legwork up front. You have to do a lot of work in the beginning. And you can do that work right now as you're trying to get started. You build your foundation right now, even if you don't have the funds, even if you have no idea where those funds are going to come from. So many of my students are in this boat, and it's so rewarding for me as a coach to see when they realize, "Oh, I don't have to have all the money right now. I
00:17:09
can work on this stuff, and that's going to lead me to a spot where I then can get the money cuz I have everything that I need to move forward. That's what you need to be focusing on. So, even if you don't have the funds right now, you can get started. You can build your foundation. That way when the opportunity comes, and I promise you, when you start building the foundation and start creating this atmosphere where you're doing it and you have a lot of confidence and now you're talking to
00:17:37
your friends and family and it's like, "Yeah, I I'm creating my business plan. This thing is going to be so much fun." They catch the excitement and either they're like, "Hey, I want to come along for the ride." or "Hey, my neighbor actually um I think they invest in real estate. They might be interested in working on this with you." You will be amazed at the doors that open for you once you start doing this, but you have to go about it the right way. And the
00:17:59
right way to go about it is to build your foundation first. That's the thing that you need to do. Again, type in foundation, we'll get you the link, and I would love to help you out as you're trying to get started and figure out how to get the funding and how much you need. It's really going to be dependent on what you're going to do to get started. But if you build your foundation, you're going to know exactly what you need, and that's going to allow you to be successful.
00:18:22
So, I hope you found this video helpful as you're trying to get started and figure out exactly how much money you need. That you took into consideration, there's a few things that beginners here they don't know what they should be budgeting for. And then we hit on those things. We talked a little bit about what the down payment looks like and how much you might need for your situation. But more than that, what I hope you got from this is you need to work on your foundation right now. That's what's
00:18:46
going to help you shift into this is a dream, I really want to do it, and spending months or even years thinking that to actually shifting into a spot where you're like, "Okay, I've got it. I've I've built the foundation that I need, and now I'm going to be successful." So, if you found this video helpful, make sure you like the video, subscribe, ring the bell, do all those things so that it helps people like you find these videos so that they know what they should do because there's so many
00:19:13
people that are going to need assisted living and there's not enough beds and we need to get out there and help people out and help them understand how to get started so we can help that population that is going to need this care. All right, so make sure you're doing that. Uh it helps a ton of people find this. Are you curious about assisted living but you're not sure how to get started? At Assisted Living Investing, I help health care workers start their own assisted living business so they're not stuck trying to
00:19:39
figure it out and know exactly what they should do next. And I just want to remind you that it doesn't take a lot. Just keep making progress step by step by step and I promise you if you do and you are consistent and persistent, you are going to be successful. Thanks for watching and have a great day.
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