How to Buy an Existing Assisted Living Facility (Step-by-Step)

assisted living business plan assisted living change of ownership assisted living facility purchase buy an assisted living facility buy vs build assisted living closing process assisted living due diligence assisted living license for assisted living facility sba loan assisted living Jun 16, 2025

Buying an existing assisted living facility can be one of the fastest ways to enter the industry.

It saves you time. It lowers your risk. And it can start cash flowing from day one.

But if you’ve never done it before, the process can feel confusing and overwhelming. That’s why I’m breaking it all down—step by step—so you know what to do, when to do it, and how to avoid the biggest mistakes.

Let’s jump in 👇

Check out this video, too;

🧠 Why Buying an Existing Facility Matters

Here’s why buying an existing facility might be your best move:

🏃‍♂️ Faster launch — You’re stepping into something that’s already running
💰 Cash flow on day one — Residents and staff may already be in place
🧩 Easier path to licensing — CHOW (change of ownership) is faster than starting from scratch

Buying instead of building can mean fewer headaches and a much shorter learning curve. You’re not reinventing the wheel—you’re improving what’s already there.

That’s why I personally bought two facilities this way—and I help my coaching clients do the same.

🏡 Step 1: Find the Right Facility

You can’t just Google “assisted living homes for sale” and expect the best ones to show up.

Here’s where to start your search:

🏢 Commercial brokers — Ask if they have any experience in senior care

🧑‍💼 Business brokers — Websites like BizBuySell or LoopNet are good, but good deals go FAST

🧠 Your network — Let your real estate and healthcare contacts know what you’re looking for

🚗 Drive-bys — Old-school still works.

📌 Pro Tip: Some of the best deals aren’t listed online. Build relationships with brokers and owners now—before you’re ready—so you’re top of mind when a deal comes up.

When you evaluate a facility, look for:

Good location (residential area, close to hospitals or shopping)
Clean licensing history
Staff and systems already in place
Financial records that show positive cash flow or clear potential

💬 Step 2: Start the Conversation

Once you’ve found a property you like, reach out to the owner or broker.

Here’s what to ask for (a lender will need all of this information as well):

✅ 2–3 years of profit & loss statements

✅ Most recent tax returns

✅ Census data (how many residents are there?)

✅ Payroll info (who’s on staff and what do they make?)

✅ License details (is it current? Any violations?)

Also ask why they’re selling. Retirement? Burnout? Moving out of state? Their answer will tell you a lot about the deal, and give you clues on what to negotiate.

💸 Step 3: Secure Financing

Next up is money—and yes, you can absolutely buy a facility using mostly other people’s money.

Here are 3 common financing options:

💼 SBA Loans – My favorite method. These loans are designed for small businesses like your assisted living facility.

🧑‍🤝‍🧑 Private investors or partners – Especially helpful if you have the time and healthcare background but need the capital.

🏦 Commercial loans – These can work, but usually require more money down and tougher terms than SBA.

To qualify, be ready to show:

A solid business plan
Your underwriting and projections
Your resume (including any relevant work experience you have)

📌 Need help with any of this? We cover it inside the Launchpad Bundle and go even deeper in the Accelerator.

📝 Step 4: Make an Offer

You’ll submit a Letter of Intent (LOI)—this outlines your offer price and basic terms. If the seller accepts, you move into due diligence.

Due diligence is where you roll up your sleeves and verify everything:

Licenses and state inspections
Vendor contracts
Staff roles and wages
Utilities, insurance, and expenses
Maintenance records
Any existing liabilities

Look for red flags, but also opportunities. For example, maybe they’re charging under market rent — that’s a chance to increase revenue after purchase.

📄 Step 5: Work Through the Needs List

Once the deal is moving forward, your lender will send you a long list of documents they need.

This list usually includes:

Tax returns (business and personal)
Bank statements
Business plan and projections
Seller’s financials and license docs
Organizational documents (LLC, EIN, etc.)

It might feel overwhelming — and that’s normal! But your closing officer will guide you through it. You’re not alone.

📌 I recommend using a shared folder like Google Drive or Dropbox to keep everything organized and accessible.

🏛 Step 6: Handle the Licensing Process

If you’re buying a licensed facility, you’ll go through a Change of Ownership (CHOW) application with your state.

The good news?

✅ It’s usually faster than a brand-new license

✅ You’re stepping into a proven business

But you do need to time things right:

Coordinate with the licensing agency and your bank
Get approval to operate as close to your closing date as possible

💡 Your lender won’t fund without a license, and the state won’t give you a license unless you control the property. So both sides need to work together.

🖊 Step 7: Close the Deal

You made it!

Closing day is when everything becomes real. You’ll sign the final documents, wire the funds, and officially take over the business.

You’re now a licensed facility owner. 🥳

It’s normal to feel excited and nervous. This is a big moment — but it’s also the beginning of your new future.

Celebrate it. You earned it.

Next Steps: Take Action Today!

🚀 Want to launch your assisted living business in the next 12 months?

✅ Step 1: Download the Business Plan Checklist to start planning.
✅ Step 2: Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
✅ Step 3: Follow this guide, take action, and bring your vision to life!

Got questions? Drop them in the comments below! ⬇️

▶️ Watch on YouTube

Show full transcript 👇

Transcript

00:00:00
hey friend it is Brandon Gustafson with Assisted Living investing excited to have you here with me on the channel today for our live topic today we're going to be talking about how to purchase an existed living home uh this is a question that I've seen a while for those of you that are new though I am Brandon Guston I the owner of Assisted Living investing. net and I created uh this channel to help people like you to help those that are new and um maybe aspiring Real Estate Investors launch

00:00:28
their own Assisted Living business so they can reach uh achieve uh time and Financial Freedom through Assisted Living so excited to have you here with me on the channel today let's get into it um let me share my screen and um again we are talking about how to purchase an assisted an existing assisted living facility um if you would like to get some of my free resources I'm going to have a ticker going down here on the bottom for a profit path tool that I created I actually did a video a couple weeks ago on on this and

00:00:58
I have turned that into something there going to be links Down Below on YouTube uh you can type this in as well if you're watching on Facebook Assisted Living investing. netprof path all one word or you can get the business planning checklist which is Assisted Living investing. netb checklist we will have links on all of the things so you can get access to those free tools um you could also get over to the website Assisted Living investing. net and get a free underwriting calculator so have a

00:01:24
lot of information uh and tools there for you to kind of help you along your investment journey to help you launch that Assisted Living business business now let's uh give you a little bit of background on who I am so you kind of know who you're talking to here uh I'm Brandon Guston I own two assisted living facilities they are out of state I live in Utah one of my facilities is in Colorado the other is in Idaho and I operate those facilities remotely uh using my administrators that are there

00:01:50
and they do most of the work for us and they're incredible uh people and and help us run that business so uh have that experience have secured over one and a half million in funding from the SBA so I have a lot of experience at doing that as well have a masters in healthcare administration I've worked in the healthcare industry for over a decade and uh just have a lot of experience if you're here live um then and and you're new type in newbie if you have been doing this for a while and

00:02:15
you're looking to add another one to your portfolio type in um operator down below as well and if you have questions if you're here live or if you're watching after the fact type those questions in I'll have some time for some Q&A here at the end um of of the live session so let's get into this process here of finding a a facility um this is the first step in in the process of purchasing an existing facility you have to find one so a couple weeks ago we did a video on this on how to go and find it

00:02:46
so we we talked about some of those online resources loopnet.com Bisby cell.com cy.com those are all incredible resources to help you find Opportunities so I'd encourage you to go watch that video because it's going to answer a lot of the questions on how to actually find something and once you do that's what this profit path the ticker that's going along at the bottom uh is is that tool so Assisted Living investing. netprof path it's going to help you do a quick analysis to identify um if if something

00:03:14
is going to be useful for you or not I also have that calculator that will allow you to do that but the first thing you have to do is is find an opportunity because if you don't find something you're never going to be able to purchase it so you got to do some looking you go go do some digging so that you can you know make some progress and and find an opportunity I was talking with somebody a little bit earlier today and she's already started that and it was so exciting to listen to her talk about the

00:03:41
the opportunity she's got in front of her and where she's going with that so um I just love um when people take start taking action and start moving forward it's a lot of fun and rewarding to to see that um start coming to fruition once you have found that property the next thing you need to do is your due diligence so when you do this I've shared this story before about signing an NDA an NDA is a non-disclosure agreement the first time that I was G like had the conversation with a broker

00:04:09
that said hey yeah we can give you the information you just got to sign this NDA I like you know during the headlights I was like what what is that I have no idea you're just signing it basically saying I will not share this information I acknowledge that it's private information I'm not going to share it with anybody that's what an NDA is a non-disclosure agreement so you're going to have to sign that to get their information uh you typically it's just a docu sign it's something you can do

00:04:33
online do on your phone uh really simple process to to get that in place next is when you get that information from them there's going to be finances and you're going to need to start reviewing those finances and get familiar with what they look like and how they work and and how they've performed over the past several years and and really get a feel for if that opportunity is financially viable or not um and and what you're going to notice in there is sometimes you're you're going to see something where it

00:05:03
was not performing well financially and that doesn't necessarily mean that it's a bad opportunity you still want to dig into it because there may be opportunities to increase rents or um to decrease some of your expenses and and create more leverage there to to create that gap of profitability that that you would need to have to run a successful business so you want to look at those financials and not just surface look at them you want really dive deep into these financials get an understanding

00:05:33
for what they are how they work um what went well what didn't go well and you're in this kind of negotiation phase you're going to want to ask questions why what happened here what what went well with this why didn't this work out um those are questions that you want to ask because as a as a person that's selling they're going to want to tell you that information for good or bad but they want to explain what's happening because it's going to build that Rapport build

00:05:58
that trust and and help make people feel a little more comfortable in the opportunities that they're looking for you also want to do your own underwriting on this opportunity when you start working with banks they're going to do their own underwriting but you want to spend the time doing that that's why I have the tool um on the website Assisted Living investing. net the free underwriting calculator you can do that you can put all the information in there I have other videos on the channel That kind of explain how to do

00:06:22
that or the business planning guide Assisted Living investing. net BPG and we'll link that down below as well as a great res source to help you really get things off the ground to to understand what you're looking at from an underwriting perspective and how to incorporate that into your business plan so that you can have something solid that's put together really well that A lender or an investor or somebody like that is going to feel confident in but you as the person that's buying this

00:06:51
facility you need to do that underwriting yourself you need to get a you need to feel comfortable with it and not just trust that everything is going to work out and you do that by look at their previous finances putting it in your underwriting model figuring out how much you're going to charge those residents whether they're Medicaid or not um what that room rate's going to be and and start backing your way into what that's going to look like for you as as an owner of of a facility as the owner

00:07:16
of this business that you are starting to launch once you've done that you've you've done the underwriting you've looked at all of the numbers you're feeling comfortable with it you feel good about the opportunity the next thing that you need to do is make an offer and um so you're let's say that um they have listed the property at 1.2 uh the person I was talking with earlier today she asked you know is that negotiable do I have to pay that rate and what I what I told her is everything

00:07:46
is negotiable everything is negotiable you can you can always make an offer that that's different that's the fun thing about real estate is uh it's it's not always just a set thing and the other thing that's really cool about real estate is there's always going to be a deal you can there's always a way to make an opportunity work um for both both sides of of the fence and and so you just need to realize that that it's you can negotiate you can have those conversations and see where where it

00:08:14
goes from there um so it's worth getting a a good feel for your underwriting and running different scenarios for you know what if what if we offered $100,000 left what is that less what does that do to my my debt service to my mortgage payment and how's that going to impact everything else you can run these different scenarios so you get a feel for what it looks like because there's just so many levers that you can pull um that's why you know that underwriting calculator that I give you is is there's

00:08:42
so much in there because there are so many levers that you can pull there's so many things there that could help you out along your journey so that's that that's the the next thing is is making this offer determine that offer that makes sense for you and for them you extend that offer and if they like it then you go under contract if they come back to you and they negotiate and they say no we actually want it at this amount um then you know you're going back and forth you're negotiating um

00:09:09
you're using Brokers you're using those third parties to help you negotiate um to keep things kind of civil as you're going through it and that's going to really help you feel confident in the the deal that you are getting under contract so once you make that offer the the next step in the process is uh once you're under contract is typically going to be finding a lender so when you're working through this process of purchasing an an assisted living facility when you're purchasing um this

00:09:38
type of a business it's not like um when you're buying a home when you go buy a home you go to A lender you you or to a mortgage um loan officer or whatever you get preapproved from that lender and they tell you you have $500,000 uh and and you're approved wee pre-approved for that go ahead look for a house it doesn't work exactly like that when you get into this realm they're a little more kind of a caseby casee basis you might find a lender that is willing to say yeah we approve you

00:10:08
for a million dollars in my experience that's very few and far between what you're going to end up doing is you're going to get a contract you're going to get an opportunity under contract you're going to take this to multiple lenders um I've shared this experience a few times as well it our our first facility we went through oh probably 20 lenders to try to find something uh second time was a little bit faster honestly but the third one which was a different business um I ended up having to reach out to

00:10:38
probably 50 lenders before I finally found one that would work with me so it was just persistence and and reaching out and and giving them my underwriting my business plan and how I thought this was going to be a good opportunity they go through their process to to confirm for themselves that they feel like it's a good opportunity so you've got to talk to a bunch of lenders um one of the best ways to those lenders is to get on and just do an internet search and search for SBA lenders in New York in

00:11:07
California where whichever State you're in um is to look that way and then you're going to get this huge list you're going to find somebody that has a Blog on it or something um and and it's going to have 200 lenders on there you want to start reaching out to them you know give him ler which ones are these am I comfortable with this Bank do I have a relationship with them already um start having those you know those stop processes start reaching out to them start you know giving them your business

00:11:32
plan start explaining what you're trying to find and and look and see what you can can do with those lenders this is how you go and find the lender once you've found them you need to provide them with that business plan and with that underwriting this is why what I teaching the business planning guide is so key because it gives you those tools which are just absolutely crucial for your ability to to go and uh and get funding whether that's from a bank or from from an investor or anybody like

00:12:01
that it it's a tool that you can use so many different ways and so many times to help you get um the opportunities that you need whether you're getting your first one or expanding um so again Assisted Living investing. netb PG and we'll have that linked down below uh it's a great tool to help you out once you do all that you've given them everything you're going to get the approval in place and that's that that approval that I was telling you about that you might get with a typical

00:12:27
mortgage where they say yep you're pre-approved for $500,000 once you've given them everything given this lender everything that they need they're going to say yes you have a conditional approval or a pre-approval um that we will work with you on this deal and at the amount that you have offered offered them so that's kind of how that approval process works is you're trying to work with lenders and trying to get things it can it can be a slow process it can take multiple weeks

00:12:53
for you to get there but a lot of the approvals that you get from lenders are on a case-by Case basis it's not a blanket here's a million dollars um go go for it uh that's just been my experience with it after you do that you're going to get to closing and there's a lot that happens from when you go under contract to closing my experience this is a months long process uh it took us um four months for one of them and three and a half months for the other one so it is not a just a short

00:13:20
period of time but you have a lot that kind of goes into that finding the lender building out that business plan building relationships um talking with insurance brokers um just all kinds of things that that go into this process things that I teach in the accelerator course um here at Assisted Living investing so uh when you do that you're going to get a needs list that needs list is basically a document and I've had ones that are like five pages long and it's it's not like single spaced or

00:13:48
anything like that it's it's well spread out but still it's 30 50 things that you have to do their needs lists they're asking you for stuff that you already gave them as well so it's a little bit redundant they're going to want bank statements and tax statements and uh the business plan again and see if you have any updates and you're underwriting and they just want everything um from you and from the seller they're going to ask for all of the things because they want

00:14:13
to make sure that that they're comfortable with this so you're going to get this needs list that you got to work with you're going to have like a closing officer somebody that's going to work directly with you as you go to close and they're going to help you through that needs list and answer questions they're going to be your Advocate to help make sure that you get everything that you need um so that you can go to closing but um that's a big part as as you get to this phase in the process you're

00:14:37
going to then get your facility license in place as well as you're doing this so if you are doing uh purchasing an existing facility you're going to do what's called a change of ownership process or a chow um is what I've often heard them called uh in the states that I've work in and it's it's basically the same application process you go through to obtain your license you're just checking a few different boxes but you're going to have to do that you're going to have to get that license in

00:15:03
place it's a part of the closing you need to be able to operate the business something that is is a little bit tricky is the state doesn't want to give you a license if you don't have a home and so we've had to kind of coordinate between the lender and the state and and get them to kind of work together and coordinate so that we can have those things come together and we get the license active the exact day that we close so that those two things come together and we can take over operations

00:15:28
and and move things along so 's a little bit of coordinating and relationship building that you got to do as you get to that process it's required though if you're going to close um so you got to have all of your policies and procedures everything needs to be in place so that you can get up and get running and get started once you have all of that stuff everything needs list it's all good everything you're going to go to closing you're going to go sit at the table you're going to sign a huge stack of

00:15:51
papers a room of paper um you're going to have so much to do there and it's an exciting day it's it's it's super exciting I remember both times that we closed on our on our businesses it was um just so exciting one of them we flew out to Colorado and and we were able to do that and we went out and and and went to a really nice restaurant afterwards the other one uh was here in in Salt Lake where I'm at even though the facility was in Idaho and uh we did that I actually um got a job offer that exact

00:16:21
same day like I remember like it was just a crazy Whirlwind of a day it was sleeing all over like it was just crazy weather um a bunch of fun exciting things happening um but you're going to remember those days U because you are now becoming that business owner you're you're you're achieving that dream and it's so exciting to have that happen so that's kind of the process you go through as as you are purchasing that that facility that's how you purchase that's that's from you know finding the

00:16:49
facility all the way to the end um that's that's what happens and and how how it goes what you can expect as you go through that process I see there's a couple people here that are live uh if you have any questions make sure type those down below so I can answer those for you and uh if you are you know if you're watching thank you I appreciate it make sure you like the video subscribe and ring the bell as well on YouTube so you get notified every time I go live on these and if you are on the

00:17:14
Facebook group make sure you're um doing things so you get notified every time I I go live on these we do these live sessions every Tuesday and then we are putting out other content on uh Fridays next Tuesday I uh it's the 2nd and I will be a little bit late I'm still not sure what time the live session is going to be it's going to be at a slightly different time because I am buying a personal residence for myself so um we long story ended up having to um sell our home because of a failed business

00:17:43
not our assisted living facilities and we're able to finally get back and and get a home so we're super excited for that um but um so yeah next week will be a little bit late because of some stuff we've got to do with the purchase of that home anyways um yeah one thank you again for for watching thank you for being here remind you about the free resources uh we've had the ticker going down along the bottom for the profit path tool um that one comes with the the little calculator that I did in the

00:18:11
video a couple weeks ago along with a quick overview video of how to use that tool so you can get access to that the business plan checklist as well um right here uh BP checklist those are linked down below get over to the website assist living investing. net and you can get access to the free underwriting calculator as well and just want to remind you here at Assisted Living investing we are here to help you launch your Assisted Living business so that you can achieve that obtain that Financial time of Financial Freedom to

00:18:39
help you along your your journey and want to remind you as well to keep going keep making progress it you just keep going step by step by step it doesn't as long as you're persistent and consistent you're going to be successful again thank you for watching and have a great day

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