Unlocking $30K/Month in Assisted Living: The Untold Truth
Dec 03, 2024
Earning $30,000 a month from an assisted living facility might sound like a dream, but it's not as far-fetched as you might think. With the right plan and a solid grasp of your finances, you can reach this income goal. In this blog, we’ll dive into the numbers, what to focus on, and why understanding the financial side of assisted living is so important.
Check out the video, too:
Understanding the Numbers
Let’s start with the basics! To make $30,000 a month, you need to know where the money comes from. Imagine you have a 10-bed facility, and each resident pays $3,000 a month. That adds up to $30,000 in total income before any expenses.
If your rates are a bit higher, say $4,000 a month per resident (a mix of Medicaid and private pay), your total income could be $40,000 with 10 residents. And if you have a bigger facility with 15 or 16 beds, you could bring in $60,000 to $64,000 each month. Sounds great, right?
But there’s a catch—gross income (all the money you bring in) is different from net income (what’s left after you pay all the bills).
Gross Income vs. Net Income
A common mistake is confusing gross income with net income. Here’s a simple breakdown:
- Gross Income: This is the total money you make before you pay for anything.
- Net Income: This is what’s left after you cover your expenses.
For example, if you make $30,000 in gross income but have $25,000 in expenses (like staff salaries, food, and utilities), your net income is only $5,000. That’s why it’s crucial to keep track of both numbers!
Factors That Affect Your Profit
Here are a few key things that impact how much money you make:
1. Facility Size and Scale
Smaller facilities with 10-15 beds often serve residents on Medicaid and have lower gross income, but with smart spending, they can still be profitable. Larger facilities, with 50 or more beds, tend to attract private-pay residents who can afford higher rates, but they also have higher costs.
2. Payer Mix
Your income depends on who is paying. A good mix of Medicaid and private-pay residents can help balance things out. Medicaid is steady and reliable, but private pay tends to bring in more money per resident.
3. Cost Management
Expenses like staff pay, food, and electricity can go up and down. Surprise costs, like fixing a broken heater, can eat into your profits. That’s why budgeting and planning are so important.
Tools to Help You Succeed
To hit your $30,000-a-month goal, use tools to make your job easier. An underwriting calculator, for example, can help you figure out exactly how much money you’ll make after expenses. You can grab our free underwriting calculator to help you out with this.
Reaching $30,000 a Month
It is possible to earn $30,000 in net income every month, but it takes careful planning. You need to:
- Keep Expenses Low: Watch your spending to make sure your costs don’t eat up your income.
- Balance Revenue Sources: Aim for a mix of Medicaid and private-pay residents to keep your income steady.
- Use Helpful Tools: Tools like underwriting calculators can give you a clear picture of your financial situation.
Ready To Take The Next Steps?
Interested in starting your own assisted living facility but unsure where to begin? Download our Business Plan Checklist for a step-by-step guide on creating a successful business plan. This resource is designed to help you navigate the complexities of starting and running your facility.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:01
In today's video, we're going to get into the myth or the truth of whether or not you can make $30,000 a month with an assisted living facility. If you're interested, stay tuned. Hey everybody, it's Brandon Gustafson. Welcome back to the channel. Excited to chat with you today. We're going to get into a topic that I hear a lot from people as they are starting to get into assisted living. Uh the question is, can I make $30,000 a month while working on an assisted living facility? How much
00:00:39
money can I actually generate uh with with operating a facility? And I'm here to tell you that you could very easily get $30,000 a month. Uh getting to that number is actually pretty easy, pretty reasonable to do. So, let's break down some of the numbers so that you can get a feel for exactly how that works and how you can generate $30,000 uh a month in income in your net income for that facility. So, let's use use a couple numbers here. Let's just use round numbers and these are going to be low.
00:01:12
But let's say that you have a 10 bed facility and you've got a, you know, you've got 10 residents, you're full and you're charging those residents $3,000 a month, which is actually pretty low uh for those. Our Medicaid beds uh generate more than that. So, let's say you've got those 10 beds, you've got $3,000 a month right there. That's $30,000 a month in income. Boom. You got it. Good for our assist for our uh facility. I was actually just looking at numbers for our
00:01:43
facility in Idaho and we're getting for our Medicaid residents uh between 4,000 3500 and $4,500 a month um is about where we're at. So, we're averaging close to $4,000 a month total with the money that comes in from Medicaid and the money that we charge to our residents. And I'll link a video up above about how those payments work and how the money comes in to you uh for assisted living and and how you're generating that income for assisted living facilities, especially if you are
00:02:14
uh thinking of going the route of Medicaid. Uh but you know, you you have those 10 facilities uh those 10 beds in your facility, they're generating $4,000 a month. Now you're up to $40,000 a month. It's very easy for you to generate that income. Now, if you are up to, you know, you've got 15 beds, that's going to be 60. This is dangerous. I'm going to do some math here in my head uh while I'm doing this. So, $4,000 a month at uh 10 beds is $4,000. $40,000 in income. So, 15
00:02:48
beds at $4,000 a month is $60,000 in income. If you had 16 beds like I have in my facilities at uh $4,000 a bed on average, that's going to be uh $64,000 a month in in income that's coming in. So, it's very easy for you to actually generate that amount of income that's coming into your facility. It's very doable. Uh it's it's very um you know, it's a it's an attainable goal if if what you're trying to do is net income. where you have to be aware in in assisted living is this is a business
00:03:23
and there's a lot of expenses that are going out of it. So where where this might uh where you might have heard, you know, oh yeah, you can definitely generate $40,000 in income, $30,000 in income with your assisted living facility. That's very true, but that is net income. Uh it's not gross. So your gross income is going to be your net income. So that, you know, $40,000 $30,000 a month that you're getting from your residence minus all of your expenses. So let's say it cost you
00:03:53
$25,000 a month to operate your facility and then and you're making 30, your gross income is now at $5,000. So need to be kind of a little bit careful with those numbers. Uh getting to the, you know, generating that much income, very easy to do. what the difference is and what people probably aren't going to be telling you is gross income is very different from your net income. So, that's why underwriting is super important. I'm going to link up above uh video to my underwriting calculator and
00:04:23
visit me on assistedlivinginvesting.net. We'll put a link down below and uh I've got a pop-up on the website and you can get access to that free uh calculator for underwriting so you can kind of get a feel for what that's going to look like for you. But you want to look at all of your income that comes in minus all of your expenses. That's going to be your gross income. That's going to be what you're cash flowing uh and and what you're going to be getting. So, you want
00:04:46
to make sure you're understanding that as you get into this. Uh there's just so many little intricacies of it. Uh things you need to be aware of as you're getting into running that facility. The expenses, the unexpected expenses. Uh, it's a lot of what we do and teach here at Assisted Living Investing is what to expect as you get started on your journey to purchasing an assisted living facility. Going to kind of help you walk through that process and understand uh what those expenses are, what you can
00:05:14
expect, and then that's going to give you a really good insight into your specific situation, what type of facility you're going to run, and how much income you're going to be able to get, how much gross income you're going to be able to generate. It's conceivable you could be getting $20,000 a month in gross income uh depending on how you set up your facility. It's possible uh if you're doing a smaller residential facility, might not be as likely though. Um especially if you're dealing in the
00:05:42
Medicaid space, uh which is a little bit more scary uh as but it's very doable. And you can see by those numbers I just gave you uh still profitable, but uh not as much as you know that high-end private pay facility or something that's a more of a bigger box that has 100 plus beds or 50 plus beds. uh those are going to be more profitable, but there's going to be higher expenses there as well as you're trying to figure out, you know, how much money can I actually generate in my assisted living facility. It's
00:06:10
something that you want to just be aware of. You can generate a lot of income, but you've got to kind of control those expenses if you really want to see gross income and cash flow for your facility. Does investing in assisted living sound interesting to you, but you don't know how to get started? at Assisted Living Investing. We're here to help you through the process start to finish. Make sure you visit us on the website at assistedlivinginvesting.net. Can't wait to see you over there. And
00:06:37
thanks for watching and have a great
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