Should You Buy an Existing Assisted Living Facility?
Aug 22, 2026
Buying an existing assisted living facility can help you get started faster, but building from the ground up gives you more control. I’ve seen both paths work, and the right choice depends on your goals, your market, and how quickly you want to get started.
Want the full breakdown? Watch the video below👇
Buying an existing facility can help you start faster
One of the biggest benefits of buying an existing assisted living facility is speed. The home may already have residents, staff, a community reputation, and a license in place. That means you can move toward profitability much faster than with a new build.
You will likely pay more for a business that is already running. But you are also buying time. If your main goal is to get into assisted living and become profitable sooner, buying an existing home can be a strong option.
âś… Look for a facility that is already operating well.
đź’ˇ You are paying for more than the building. You are also paying for the time and work that has already gone into the business.
Buying an existing home means you must do your homework
The biggest risk is that you could inherit someone else’s problems. The facility may have a poor reputation, unhappy staff, a weak culture, survey deficiencies, or deferred maintenance.
That is why due diligence matters. Before you buy, you need to understand what you are really getting.
âś… Review past state surveys and any deficiencies.
âś… Look at the staff, pay, turnover, and reputation.
âś… Review the facility’s historical census and revenue.
âś… Check for major repairs like a roof, HVAC system, water heater, or windows.
I would also look closely at 24 to 36 months of census data. You want to know how many residents lived in the home, what they paid, and whether there were large changes over time. This can help you understand if the facility has a strong history or if there is a reason occupancy stays low.
Building from the ground up gives you more control
Starting from scratch has a big advantage. You get to build the home you want.
You can choose the look, feel, layout, and culture from day one. You do not have to spend time changing someone else’s systems or fixing a poor culture. You get to create the assisted living business you want from the beginning.
Depending on your market, the size of the home, and your plans, building may also cost less than buying an existing facility. A smaller home could give you some room to save money.
But there is a tradeoff.
A new build can take much longer to become profitable
When you build from the ground up, you have to deal with zoning, permits, construction, licensing, and other steps before you can open your doors. That process could take 6 to 24 months, depending on your area.
Then you still have to market the home and fill your beds.
That means it could realistically take two or three years to reach profitability. An existing facility may get there much sooner.
Licensing can also be more involved with a new facility. When you buy an existing home, you typically go through a change of ownership. A brand-new facility has to go through the full licensing process.
Make your decision based on your goals
There is no single right answer. If you want speed and an existing business that is already running, buying may make more sense. If you want control and the chance to create your own home and culture, building may be the better fit.
If you are considering buying an existing facility, find a broker who understands senior care and assisted living. They can help you find opportunities and guide you through the process.
You also need to plan for licensing, closing, and possibly Medicaid. If you serve Medicaid residents, there can be a delay between getting licensed, submitting your Medicaid application, and getting paid. Make sure you have enough reserves or a backup plan for that period.
Wrap Up
The best next step is to get clear on what matters most to you: speed, control, cost, or the ability to build something from scratch. Then do your due diligence before you commit to a property.
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
Hey, have you been wondering how to get into assisted living? Like maybe you have a house or you've been thinking maybe I should build something from the ground up and you're just not sure like from a property perspective how to actually get into assisted living. If that's you, then today's video is going to help you out a ton. Today we're going to be talking about should you buy an existing assisted living home or should you be starting from scratch? Now, I see this all the time with people in my
00:00:26
comments and things like that that are saying you know, I'm just so confused. How do I actually go in and get started and you're just trying to figure out the best way for you to actually move forward and get into assisted living. I want to give you a lot of clarity on that in today's video. Hey friend, my name is Brandon Gustafson. I help health care workers start their own assisted living business so they're not stuck trying to figure it out and know exactly what they should do
00:00:53
next. So, if that's you, you're in the right spot. And also, if you need some help, make sure you get over to assistedlivinginvesting.com. bunch of free resources for you over there. Would love to help you get unstuck and help you make some progress. And if you are unsure of which of my options are going to be best for you, we will have a link QR code down somewhere here for you that you can go and scan, go to aliquest.com. Would love to have you over there. So, let's get into today's video. Again, should you be
00:01:22
buying an existing assisted living home or should you be starting from scratch? So, I want to go through a little bit of the pros and cons of each of those. Something, you know, an acquisition versus building something from scratch. So, you kind of have an idea of why you should maybe do one or not do that thing and maybe help you make a better decision on this. Now, when it comes to acquiring a property, something that I think is a really big benefit is it becomes a lot faster for you to start.
00:01:52
And that speed to market is something that a lot of people, if you start looking into how businesses are run in general, speed to market is something that is really beneficial. It's going to help you become profitable a lot more quickly as well. And so, if your goal, if your main goal is I need to get into this, I want to be profitable, I want to get there quickly, then buying an existing facility, I think is a great way for you to do that. You're going to probably pay a little bit of a premium to get in and get
00:02:22
something that that's up and running, that already has residents, already has staff that is well positioned to help you actually move forward. And that can be a little bit scary, but it does allow you to move quite a bit faster as you're trying to get into your assisted living business. This is I think one of the biggest reasons why you should be considering buying an assisted living facility. You are able to start quickly. You will probably be profitable within the first year. And you're going to not
00:02:51
have to worry too much about finding a bunch of residents or even hiring a bunch of people. Now, I will be transparent. You're going to have a little bit of turnover there with residents and staff, like it's just going to happen, but it's going to happen anyways. And so, it's not that big of a deal. Now, on the flip side, why you might not want to do this is you may be inheriting somebody else's mess, right? They may have a bad reputation. They may have bad residents. They may
00:03:17
have bad staff. You might be getting something that has a lot of deferred maintenance on the home. So, you're going to have to do a bunch of capital improvements on it, which are things like maybe you got to get new windows or new roof or new air conditioning units. Those types of things you may get stuck holding the bill for those things because somebody that is like, "I think I'm going to sell this." They'll wait 5 years, and they don't make those improvements, and then you're
00:03:41
going to get stuck with it. So, you just have to make sure you do your due diligence, and make sure you know what you're getting into with that home. That's going to help you out a ton as you get started with with your facility. All right. Another reason why you might not consider doing this is as I mentioned previously, you could be paying a premium for a good solid business that is already up and running. Especially if you're comparing this to just like a home that you're going to convert into
00:04:10
assisted living. So, if you're going to buy a home, you're going to convert it into assisted living, you're you're just buying the property, right? And so, that's not going to cost you quite as much as it might if you were buying an existing facility. Now, let's get into the idea of doing a startup, something from the ground up. And I love this idea. I think it's an incredible way for you to get into assisted living. And what I love about it is you're going to have something that is even more custom.
00:04:36
Like it's going to be exactly what you want it to be, which when you're buying an existing facility, you're going to lose out on that. You're kind of stuck with what you get, which is not a bad thing because it's probably already built and up to the standards that you need to be following when it comes to assisted living, which is an awesome thing that you don't have to worry about. And when you're building from the ground up, you're going to have to deal with all that, but you get it exactly
00:04:57
how you want. You can customize this home, get it to look and feel exactly how you want it to feel for your assisted living business, which is really pretty awesome. It will also be yours from day one. So, you don't need to change the culture. And that's something when you're buying an existing facility can be really hard. We talked about you're going to probably have some turnover when you're buying an existing facility. And you may be inheriting somebody else's mess when it comes to
00:05:23
buying an an existing facility. Those things can be really hard, whereas if you build something from the ground up, you get to install your culture from day one and get it to be exactly how you want it from the first day. And that is something that I think is pretty invaluable. And you don't have to spend time re-correcting somebody else's culture. You're going to have to spend time creating your own culture, but you don't have to like gift shift away from somebody else's culture and get into something new.
00:05:55
You will also, potentially, depending on how much you want to spend on this, you may be able to find something that is less expensive than buying an existing facility. Now, this is going to depend on your market, going to depend on where you're at. It depends on how big you want this home to be, and depending on what you're going to buy as an existing facility versus what you want to build. It really will depend. Pricing here is uh a little bit up in the air, but there is some potential
00:06:22
that you could be finding materials and finding opportunities to spend a little less money if you go this route. Now, if you want to build something that's just like this beautiful mansion, it's 15-20 beds, and it it's huge, then you're probably going to spend more in this arena. But, if you want something that's like maybe a 10-bed facility, you might, potentially, be able to save a little bit of money here, which is kind of cool. Now, on the flip side of that, when it comes to building something from
00:06:48
the ground up, the cons to that, if you will, are going to be it's going to be quite a bit slower to reach your profitability goals. And this is simply because you're going to have a much longer lead time to actually getting the building up and running. And you're going to have to take care of payments while you're working on building the home. And this could take you, you know, depending on the area where you're at, 6 to 24 months because of permitting issues and zoning and and getting the
00:07:15
license in place and and all of those things. It can take a significant amount of time to go from idea, I want to do this, to actually creating that facility. And that can be really hard to do. And then, once you do that, you're going to have to spend time actually marketing and getting your beds filled. So, all of these things are going to take time. Whereas, if you buy an existing facility, you will probably be profitable in the first year. If you go the route of building your own facility,
00:07:42
it's probably going to take you two or three years to get to that point, realistically. Now, if you're okay with that and you're okay because you want it to be a specific look and feel, then you're probably okay, and only you can answer that question, but it's something that I want you just just, you know, be aware of. And then also, when it comes to licensing, it's going to be more expensive. When you buy an existing facility, you go through what is called a change of ownership process, and that
00:08:06
is typically a a lower cost when it comes to obtaining your license. You're changing the existing license from one company to another company. It's a little bit faster, a little less money, whereas when you go through the licensing process for a brand new facility, you're going to have to go through the full licensing process. It's going to take a little bit longer. It's going to be a little bit more expensive. So, you want to know that going into it. So, I'm curious, uh before I move on,
00:08:33
which of these options are you like most interested in? Are you interested in buying an existing facility? Are you most interested in building something from the ground up? I think it's a really hard decision to make, especially if you have the financial means to choose which of those ones you want to do. And I don't think there's a wrong answer for it. I just want you to know going into it, there's pros and cons on both sides. Let's talk about some of the hidden risks of buying an existing
00:09:02
facility, okay? Number one, they can be very hard to find. Now, I teach a lot of people that you can use tools like uh LoopNet and BizBuySell and Crexi, and you can use these tools to help you go find existing facilities, but they can still be really hard to find on there. I highly suggest that you actually work with a broker that specializes in senior care in assisted living, because that person's going to be able to give you a lot more guidance and help you out as you're trying to figure out how to launch your
00:09:34
assisted living business. They are amazing people if you can find them. So, that's what I would suggest that you do because buying an existing facility is not always easy. Sometimes they're off market, sometimes they go super fast, sometimes people aren't listing them, sometimes they've been up up for sale for years and that's because they don't have like good representation on their end to actually do the listing and they are very hard to negotiate at times. This is why having a broker in your
00:10:02
corner is going to help you out a ton. Another thing is when you buy an existing facility, there could be survey deficiencies. This means that on an annual basis, you have surveys you have to have the state come in, they look at the home, they say, "Yep, you need to do better at this. You're good here." They'll give you guidance on that. Those deficiencies can result in fines or can result in your inability to continue serving the populations you want to serve. And when you buy an existing facility, those
00:10:32
things do kind of come with you. So, part of your due diligence needs to be getting on the state's website and looking at a home that you are looking at buying and seeing if there are any existing deficiencies and navigating those things. So, you know going into it what problems they may or may not have had. So, it's really important for you to do that, all right? You also may come across facilities that have just have a bad reputation. And those facilities that have a bad reputation can be a little bit hard to
00:11:04
shake. Now, you will probably be changing the name to your new facility, doing some rebranding, slapping some paint on it, you know, making it look a lot better. But you may have an uphill battle when it comes to buying an existing facility if there's already a bad reputation there. So, you just want to make sure what type of reputation does this facility have in the community already with our referral sources, with our nursing organization, with a bunch of different people. Now, often times
00:11:29
that can shift very easily if you get the right people in place. So, if you're going to buy an existing facility and you're somebody like me who doesn't want to be in there on the day-to-day, you don't want to be the administrator, and you're going to keep the existing administrator, that person could be the person that is creating that bad reputation. So, you might need to get rid of them. Or, you know, when to shift over to you or to somebody else, that can really almost instantly make things
00:11:57
better when it comes to reputations. Actually, really easy to change the reputation. Now, the culture of the facility is another one, and if you're inheriting something with a poor culture, that can be a little bit harder to shift. You will have a lot of turnover with staff and residents when you buy an existing facility. It's just going to happen. People get uncomfortable with change, and they don't want to deal with it, especially from a staffing standpoint. And that can be actually a good thing if you're
00:12:22
trying to shift the culture. Because if you have a poor culture in a facility, it creates this atmosphere where people just are not comfortable. And the more you can shift that and start creating the culture that you want, the better off you're going to be. And that's going to take time. And if there's this existing poor culture in the facility, it might take a little bit of time for you to get to a point where you feel comfortable and everybody's happy, and you have the culture that you want. So,
00:12:50
I just want to make sure that that's something that's just very readily apparent for you. These are some of the hidden risks in buying an existing facility, and I want you to go into this with your eyes wide open, knowing that I might have to deal with some of these things, but it's okay. These things are not insurmountable. You're going to be able to overcome them, and you'll be okay. But, you also should just be aware that they're there. So, of those ones that we just talked
00:13:12
about, you having it be hard to find, and this is probably, I think, the the thing that is the hardest. But, survey deficiencies, bad reputation, poor culture, which of those comment down below, which of those is the thing that's holding you back from buying an existing facility? Because I'm curious to know where you're at in that path. Or is it something else? It could be something else. And I could maybe it's funding. And if that's you, then type in funding down below and we'll give you a video. We'll put in a
00:13:39
video sometime soon that talks about funding and why funding is really not the biggest issue that you have. I I promise you it's not. You go check out the workshop as well. Assistedlivinginvesting.net/workshop. We talk a little bit about that there as well. Now, I want to talk to you for a second here about license the transferring of the license when it comes to buying an existing facility. Because this is one of those things that can be difficult. And honestly, licensing is confusing and it's going to be lengthy
00:14:07
and you're dealing with rules and regulations. It can take a long time. But what I want you to know is it's okay. You're going to be able to work through it. So not only does it take a while, but when you are buying an existing facility, you're going to typically have to close at the same time that you complete the the license application. They kind of They They're these two things that go They're on their own paths. They They kind of go apart from each other. And then the
00:14:31
closer you get to closing, the closer those things get together. And ultimately, they have to fit right there together. My hands are blurry, but that's all right. You get the idea. Right? They They come together. You're going to have to probably coordinate with the bank that you're closing with and with the state. And this can take a lot of coordination because these are big people that don't typically move for other people. And you're going to have to work with them. And that can be
00:14:53
really difficult to do. I prom I've done this multiple times though. I promise you you can get through it. You're just going to have to coordinate some big egos and some people to say, "Well, we can't do it this way cuz of regulations." Like we just can't do it. You're going to have to get people to come to the same table. Now, if you're going to work with a Medicaid population, that can also put your billing on hold for a while. So the way that Medicaid works, and if you're interested in
00:15:17
learning more about Medicaid, just type it down below. But I want to give you a little bit of insight when it comes to this. So, when you're getting your facility license, you're going to work on getting the license in place. Once you get that license in place, you're going to need to at that point to become a Medicaid certified provider if you want to be able to bill Medicaid. You should be working on that Medicaid application almost immediately once you get the facility license, if not in
00:15:47
tandem for it, because you'll be able to back bill for the services that you provide when it comes to Medicaid, but only up until the point that you have submitted that application. So, if you don't want to lose the opportunity to actually bill for residents that have been in your home, you need to submit the Medicaid application almost immediately. Otherwise, anybody that's like in this gap for if it took you a month to go from license to submitting a Medicaid application, any Medicaid
00:16:13
residents that are in your home in that month period, you can't bill for them. You're not going to get reimbursed for Medicaid daily rates. You can still bill them for what I call the rough payment rate, utilities and food. You could still do that, that piece of it, but the daily rate for Medicaid, you're not going to get reimbursed for it. So, you have to submit this quickly. And while you are waiting for them to process everything, which can take weeks to even months in Colorado, when we did
00:16:40
this, it took us 4 months to get everything certified with Medicaid, you're not getting paid. So, this is something you need to either have reserves in place or have some kind of contingency plan. Now, you will be able to back bill, you'll be able to get those funds later on, but it can take a while for you to do that. So, I want you to be aware of that just from a timeline perspective if you're going to work with Medicaid. And this is true if you're buying an existing facility or building
00:17:05
something from the ground up. Anytime you're working with Medicaid, there are timelines, there's delays that go in there, and there are rules that you're going to have to follow. So, make sure you are paying attention to that. If you're interested in learning more, again, type in Medicaid down below, and I'll point you to some resources with Medicaid videos that I've done here on the channel. So, when you are starting to look at getting into assisted living, and you're trying to figure out if this
00:17:29
is going to be the right fit for you, you need to be doing your due diligence. I've mentioned that several times throughout, and this holds true for buying an existing facility and for building something from the ground up. It doesn't matter. You need to do some due diligence. You need to do some research. When it comes to buying an existing facility, specifically, I want you to be looking at past surveys. How have they performed? What types of deficiencies do they have at the facility that you need to be aware of,
00:17:56
and have they corrected those things already, or are you going to get stuck holding the bag and needing to make those changes and improvements yourself? So, you want to look at that. We want to look at at existing staff. Are they good? Are they bad? How many staff are there? What type of money are they getting paid? Uh what type of reputation do they have? How do the residents like them? You need to be paying attention to that. We also need to be looking at, and this one is super important cuz this
00:18:19
one's going to be your revenue generator, is how many residents are in the home, and we need to know historically how many residents have been in the home. A good lender, when you're doing your due diligence, is going to require you to have probably 24 months of historical census data, maybe even 36 months. So, they want a month-by-month view of how many residents have been in the home, and what I would suggest that you actually ask for is not only how many residents were in there, but what type of payments
00:18:52
were those people making over that period of time. The reason why you want to see this is you can see have rates been adjusted at any point over the past two or three years. You can see what type of like is there any kind of seasonality? Are there any big spikes or dips in the way that census has looked before that facility? If there have been, are they something that can be explained away? Like, is it logical for why there were big spikes or big dips in what happened? Like, did they have Was it COVID period and they
00:19:23
had a series of events where several residents passed away? You know, something along those lines. We want to know those things because it can help us feel confident that yes, there's enough residents here for me to keep the beds filled. Or why are you always at 50% occupancy? Why? What's going on there? Right? So, we want to know these things. It's really important for you in your due diligence. And then, I mentioned this also at the beginning of the video, but is there any deferred maintenance
00:19:52
that you need to be aware of that's going to need to be taken care of on a home? New roof, new HVAC system, new water heater, new windows, whatever it is. Do those things Are they coming up? Are they almost due? You need to be doing your due diligence on those things. Now, if you're interested in learning a little bit more about due diligence and why it's so important and the things that you should be hitting on there, just type in due diligence down below and we can get a video out for you and
00:20:20
create that. Now, when it comes to assisted living, we've talked a lot in this video here about buying an existing home. And I really have tried to give you a lot of information on the process of buying an existing home in this video. So, if you liked it, found it helpful, make sure you like the video, subscribe, ring the bell so you get notified every time we put out content like this. But, I'm hoping that gives you some clarity, but we also talked about it compared to to building something from the ground
00:20:45
up. Now, those are just two of the four ways that I see that you can get into assisted living. So, if you're interested in learning more about the other ways and all the ways you can get into it, I've got two things for you. Number one, type in four paths down below. That's going to be for me like a trigger for me to be like, "Okay, they want to know the four paths to get into assisted living." Now, we've covered a lot in this video. I hope you found it helpful. Like the video, subscribe, ring
00:21:09
the bell so you get notified every time we put out content. If you need some help along the path, go to ALIquiz.com. We will have a QR code for you down in one of these corners, down below me. And are you curious about assisted living, but you're just not sure how to get started? At Assisted Living Investing, I help healthcare workers start their own assisted living business, so they're not stuck trying to figure out and know exactly what they should be doing next. And remember, it doesn't take a lot.
00:21:34
Just a little bit. Just keep going, 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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