How to Start an Unlicensed Care Home
assisted living without a license care home business plan how to start a care home how to start an unlicensed care home residential care home startup senior care business senior housing business unlicensed assisted living May 13, 2025
Starting an unlicensed care home is a potential way to enter the senior care industry. But what exactly is an unlicensed care home, and how do you set one up the right way?
In this blog, I’ll walk you through everything you need to know about starting an unlicensed care home, from understanding what it is to setting up your business and running it successfully. Whether you're new to senior care or a seasoned investor looking for a different model, this step-by-step guide will give you the confidence to move forward.
Check out this video, too;
What Is an Unlicensed Care Home?
An unlicensed care home is similar to an assisted living facility, but it does not have a state-issued license. You’ll still provide room, board, and care services for seniors, but without the regulatory oversight that comes with a licensed facility.
✅ Key Points to Know About Unlicensed Care Homes:
✔ You care for two or more unrelated individuals in your home.
✔ You do not go through the state licensing process, avoiding fees and inspections.
✔ You still provide activities of daily living (ADLs) like meal prep, dressing assistance, and medication reminders.
✔ You may be limited in the number of residents you can have (usually 4-6, depending on local regulations).
✔ You cannot advertise yourself as a "licensed assisted living facility," but you can still offer high-quality care.
This model appeals to many people because it removes barriers like licensing fees, inspections, and strict state regulations. However, there are still important legal, financial, and business steps you must follow to operate successfully and avoid potential legal risks.
Step 1: Set Up Your Business
Before you open your home to residents, you need a strong business foundation to protect yourself legally and financially.
📌 Essential Steps to Establish Your Business:
1️⃣ Create a Business Plan – Outline your goals, target market, pricing, and expenses. A solid plan will help you clarify your vision, secure funding, and attract partners or investors.
2️⃣ Run the Numbers – Use an underwriting tool to check if your care home will be profitable.
3️⃣ Register Your Business – Even though you're unlicensed, you should probably still set up an LLC to protect yourself legally and separate your personal assets from the business.
4️⃣ Get Proper Insurance – Protect yourself with general and professional liability insurance to cover accidents, injuries, and potential claims.
5️⃣ Check Local Laws – Some cities or counties have rules about unlicensed care homes. Talk to a lawyer to ensure you’re in compliance with local and state regulations.
💡 Pro Tip: Even without a license, having written policies and procedures in place will protect you and make your business run smoothly. This includes rules for resident care, emergencies, and staff expectations.
Step 2: Find the Right Property
Your care home needs a suitable property that meets zoning, safety, and accessibility requirements.
🏡 Key Considerations for Choosing a Property:
✔ Check Zoning Laws – Contact your city’s zoning department to confirm that your home can legally operate as a care facility. Some areas limit the number of unrelated individuals who can live together.
✔ Talk to the Fire Department – Even without official inspections, it’s smart to have them review fire safety measures to protect residents and avoid liability.
✔ HOA Considerations – Homeowners’ associations cannot ban you from operating a care home due to the Fair Housing Act, but you should still check their rules and be prepared for pushback.
✔ Accessibility Features – Ensure the home is ADA-compliant with features like ramps, grab bars, and wide doorways. Even if not legally required, these updates will make life easier for residents and caregivers.
Step 3: Secure Funding
Even without licensing costs, you still need funds to purchase or rent a property, furnish it, and cover operating expenses. Without a plan for funding, your care home could struggle financially before it even gets off the ground.
💰 Funding Options to Consider:
✅ Personal savings – Many owners start with their own funds to get the business running.
✅ Traditional loans – A local bank may provide a small business loan or a real estate loan if you plan to buy a property.
✅ SBA loans – While harder to get for unlicensed care homes, SBA lenders may still fund the real estate purchase if you can prove financial viability.
✅ Private investors – Partnering with investors can help cover startup costs in exchange for a share of the profits.
✅ Seller financing – Some property owners may allow you to pay for the home over time instead of requiring a full cash purchase.
💡 Money-Saving Tip: Start with a smaller home and scale up once you have stable revenue. Keeping overhead low in the beginning increases your chances of success.
Step 4: Set Up & Market Your Home
Once you’ve secured a property and funding, it’s time to get residents and start running your care home!
🔹 Key Steps to Open Successfully:
✔ Hire & Train Staff – Even with just 4-6 residents, you’ll need caregivers to help with daily tasks and ensure high-quality care.
✔ Develop Policies & Procedures – Have clear rules for resident safety, daily care routines, and emergency protocols.
✔ Build a Referral Network – Connect with hospitals, social workers, and senior centers to find residents who need a care home.
✔ Market Your Home Effectively – Use online directories, local advertising, and social media marketing to reach families looking for care options.
💡 Why This Matters: Even though you’re unlicensed, you still need to run your business professionally to attract residents, gain trust, and stay legally protected.
Should You Stay Unlicensed or Get Licensed?
Many care home owners start with an unlicensed care home and later decide to get licensed for higher revenue potential.
🔍 Reasons to Consider Getting Licensed Later:
✔ Increased Revenue: Licensed facilities can accept Medicaid, VA benefits, and long-term care insurance, which means more funding sources.
✔ Avoid Future Regulations: Some states may eventually require all care homes to be licensed, so planning ahead gives you flexibility.
✔ Higher Market Value: A licensed facility is typically worth more if you decide to sell the business in the future.
Even if you stay unlicensed, structuring your business properly from the start will give you more options in the long run.
Want to Start a Care Home the Right Way?
Starting an unlicensed care home can be a great opportunity—but you need to do it the right way to protect yourself and ensure success.
✅ Step 1: Download the Business Plan Checklist to start planning.
✅ Step 2: Apply for the Assisted Living Investing Mastermind for expert coaching.
✅ Step 3: Follow this guide, take action, and bring your vision to life!
Have questions? Drop them in the comments! 👇
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