When Will My Assisted Living Business Be Profitable?

assisted living business assisted living financial model assisted living investment assisted living occupancy assisted living startup costs break even in assisted living buying vs building assisted living how long to profit in assisted living Jun 24, 2025

Your Step-by-Step Guide to Knowing What to Expect—and How to Speed Things Up

One of the most common questions I get from future assisted living owners is:
“How long will it take before I actually make a profit?”

And it’s a great question—because understanding your timeline helps you plan better, budget smarter, and stay motivated along the way.

Let’s break it down by the two main paths people take to launch their facilities:

Starting from scratch (a conversion or new build)
Buying an existing assisted living home

Check out this video, too:

🏗️ Starting from Scratch: What to Expect

If you’re building from the ground up or converting a single-family home into a licensed assisted living facility, your path to profitability will likely take a little longer.

Here’s a simple example using a 10-bed home where each resident pays $5,000/month:

Months 1–14: Ramp-Up Phase

You open with low occupancy—about 2 residents
You add new residents gradually (e.g., 2 per month)
Your monthly expenses might hover around $30,000
You are operating at a loss during this time

Month 15: Break-Even Point

With 6 residents, you begin covering your monthly costs
From here, any new resident added becomes profit

Months 16–24: Profit Phase

You continue filling beds up to about 90% occupancy
By the end of 24 months, you’re on track to earn around $145,000 in total profit
That’s roughly $6,000 per month in average income over two years

💡 Want to see how your own numbers would work out? Use the FREE Profit Path Tool.

🏠 Buying an Existing Facility: A Faster Route

Purchasing a facility that’s already operational changes the game. Instead of starting from zero, you’re stepping into a business that already has residents, staff, and cash flow.

Here’s what this scenario can look like:

Month 1: Immediate Break-Even

You acquire a home that already has around 6 residents
Income matches expenses from the start—no losses in the first month

Months 2–9: Steady Growth

You slowly add one resident per month
Occupancy rises to 90% within the first year

Months 10–24: Strong Profitability

Over two years, this model can generate around $330,000 in profit
That’s a $185,000 difference compared to starting from scratch

This path may require a larger upfront investment, such as an SBA loan and a sizable down payment. But it gets you to cash flow much faster. Check out the scenario in the FREE Profit Path Tool.

🔍 What Factors Affect Your Profit Timeline?

Every assisted living business is different, but here are the biggest factors that determine how fast you’ll reach profitability:

1. Occupancy Growth

Faster resident move-ins = faster profits
Plan for marketing well before you open

2. Upfront Costs

Starting from scratch may be cheaper up front, but takes longer to recoup
Buying costs more, but income begins almost immediately

3. Monthly Expenses

High fixed costs (staffing, rent, insurance) require careful planning
As occupancy grows, profit margin increases

💡 You can track and model all of this with the Profit Path Tool—a free tool designed to help you understand the financial impact of your startup.

🧮 Quick Comparison: Profit After 2 Years

Scenario	Break-Even Month	2-Year Profit	Avg. Monthly Income
Start from Scratch	Month 15	$145,000	$6,000/month
Buy Existing Facility	Month 1	$330,000	$13,750/month

These are sample numbers for a 10-bed home at $5,000/month per resident. Use your own numbers to get a more accurate forecast using the Profit Path Tool.

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

00:00:03
hey friend it is Brandon Gustafson welcome to Assisted Living investing today for our live um for those of you who are on Facebook I know meta has been having some issues today so I'm hoping that this goes live and we don't have any issues um if if there are issues and it does not get on there for whatever reason I will be sure to repost that um there on on the group so uh if you're on YouTube though hope you're hopefully you are getting this uh you know this this replay and everything will work out well

00:00:32
so just wanted to kind of make sure everybody knows that I'm aware of some of the issues going on there and it looks like we are live on the group so hopefully that stays the same let's uh before I get started let me give you a quick reminder to get over to the website Assisted Living investing. net um and I've got a free business plan checklist for you over there as well have a ticker going across the bottom here uh go to Assisted Living investing. netb checklist that will get you access

00:01:00
to the business planning checklist to help you out along your journey and help you be successful here that's that's my goal uh I'm Brandon Guston for those of you who don't know me I started Assisted Living investing to help people like you uh those who are new and maybe aspiring Real Estate Investors launch their Assisted Living business if you need a little bit of background on me then uh I'll jump into that as well so I have a masters in healthcare administration I've been

00:01:26
working in the healthcare industry for over a decade uh I own two assistant living facilities as well I live in Utah my facilities are out of state I have one in Colorado and one in Idaho so I operate those remotely and purchased them back in 2020 so it's been a few years for that and I've also secured over1 and a half million dollars in SBA funding um through that process through a few different businesses so I have a lot of experience with this being able to kind of Coach you and help you out

00:01:51
and help you along your journey in launching your Assisted Living business if you're watching this live or if you're watching the replay and you're new to this type newbie down below just so I can see who's here and if you have been doing this for a while and you want to learn a little bit about how to get to profitability which is what we're going to be talking about today then make sure you are typing in operator down below for those of you who are live or even those watching after the fact

00:02:16
then make sure you just comment questions we'll have some time here at the end for some Q&A and be able to get to you and I'm sorry I have like a little throat thing today hopefully it's a recording day for me um going to be recording a lot of videos today uh for for upcoming so hopefully it goes well but I I see I've got quite a few people here live today in our topic we're going to be talking about how long does it take your assisted living facility your Assisted Living business to become

00:02:45
profitable this came from a question inside of the Facebook group and something that I hear from a lot of people so we're going to talk about that today before we get started into that though I want to talk to you a little bit about what profitability actually is and kind of give you a definition of that so so that we are on the same page with all of this so profitability essentially is you have more income than you have expenses and that does not necessarily mean that you're out of debt

00:03:14
so I've talked to a few people and the the question always comes up you know you're profitable does that mean you are out of debt you paid off your loan and what you need to realize here this is an investment you need to kind of shift your your mentality around this because when you're doing this you actually want that debt there are some good tax benefits to having that debt and paying that down and working through that process it's GNA benefit you quite a bit I love Dave Ramsey I used to listen to

00:03:43
him all the time I love listening to his podcast and consuming a lot of his content I I understand a lot of you are may be people that follow Dave Ramsey and I I think that's great when you are getting into this investment world you kind of have to leverage debt and get get to to the point where you're using that as a tool to help you reach your investment goals but this debt is very different from Consumer Debt and uh there's a purpose to it this debt is going to be earning you money it's going

00:04:13
to be earning you more money than the debt itself so I want to just kind of be clear on that that when I talk about profitability it doesn't mean that you've taken out your SBA loan and now you've paid it off and now you're profitable that SBA loan which I'm going to probably refer to as Debt Service is going to remain as an expense item on your profit and loss statement on your balance sheet it's going to remain there it's going to be something that you are paying on on a continuous basis you

00:04:41
probably have a 25 year 30 35 year uh note on that loan that you're going to be paying off so when I talk about profitability that is an expense item that's on there I also want to point out I've got a a thing here a picture of profit first it's a great book by Mike mallwitz if you are starting on this Journey highly recommend that book it will give you some guidance on on just kind of how to run a business and to pay yourself first which is something that you really need to do Mike mallwitz has

00:05:11
some excellent books um if you are trying to get started with this and and you have a bunch of things in the air and things like that the pumpkin plan is also another great book that I highly recommend by Mike mallitz so with that said let's dive in here into starting a new facility so I'm going to give you two examples I'm going to be switching a little bit where we're going to have this one up here with the slide I'm going to take that away and go over to a spreadsheet where I can show you um some

00:05:36
numbers to show exactly what this looks like I think it's going to help you better visualize and digest this information I think it's going to be a little bit better but before I do that I want to kind of tee this up so when you are starting a new facility um something you need to be aware of is you want to start building that waiting list um and and you need to to build that so that you can hit the ground running once you open that facility if you are starting something from scratch you're buying a

00:06:03
home you're doing a renovation you're finding somebody that you can go and rent the home from and you're starting it up there as well both of those situations you don't have any residents in your home and so you need to start advertising before you do that I have this conversation with people of often that it's okay for you to start uh advertising what you don't want to do what you need to kind of stay away from if you're not already licensed is you can't say you're a licensed facility

00:06:30
you would say uh something along the lines of uh a care home you have to kind of be really careful with the language uh we're opening a home that is going to work with an elderly population coming soon get creative with the words but you can't brand yourself as something that you want to be without having the license you might get into some some gray area there and it's best to to kind of avoid that but you can still kind of say what you are going to be without saying saying what you are going to be

00:07:01
if that makes sense and so you want to build that out and so you could get on Facebook and you could have an ad that is doing that you could build a Facebook group um you could do all of these things a Facebook page whatever it is that you want to do um get out into the community go start doing some networking go talk to a discharge nurse at a hospital go talk to a rehab facility go start building those relationships and telling people I'm going to be starting this home this is the population that we

00:07:25
cater to and we plan on opening this home in in two months or whatever date it is and start building that waiting list start building those that reputation and start building those relationships because it's going to allow you to build a waiting list to help you make some progress because otherwise you're going to have a home that opens and you're not going to have any residence in it and they don't have any income and that's going to make it really really tough for you so you want

00:07:51
to do that there's also just going to be some leadup time as you are doing this the what what we would call holding costs so that means you youve purchased the home you're working on the renovations um and you you need some time upfront where you're not operating you still have some expenses um and you've got to pay those expenses whether it's Deb service or maybe you've hired some people um those types of things and you you're going to have those expenses without any income coming in which can

00:08:19
be really rough so you need to make sure that you have sufficient income for that so we're going to use an example here we're going to say we've got a 10 bed facility and let's say that you are bringing in $5,000 per bed at this facility so it's a pretty nice facility your monthly expenses here are $30,000 so for all of your expenses including your Des service it's $30,000 for you to operate in month one you're going to start at 20% occupancy so you have two out of 10 people month two

00:08:50
you're at 40% occupancy and you just increase that by 20% per month you're bringing in two residents per month until you get to 90% occupancy let's just say you never reach 100% and you stay at 90% occupancy okay so I'm going to go ahead and pop this down let's open this scratch paper sheet and let us Zoom way in so you can actually see this and I'm going to take my camera off as well because I actually I'm going to drop me down nope that's the wrong button there uh let's

00:09:28
see to the scene I'm going to go right here actually we'll just sink me down here that's fine um okay so right here we're purchasing an existing facility you the nice thing here is you have some existing staff you have existing residents you don't have to worry about that you can jump in and get going Let's uh say in this scenario here that again we have a 10 bed facility we're doing $5,000 per bed here and our monthly expenses are 30,000 we're just taking the exact same scenario we're making it

00:12:26
the same across the board but this time because you're purchasing an existing facility you're going to start at 60% occupancy um because you already have those residency there residents there which honestly I feel like it's kind of low but let's just say that it is uh that's the case and you're going to only increase your monthly occupancy rate by 10% you're only adding one resident per month to get there until you get to that Max of 90% and right here you notice we have a break even month of month one

00:12:54
back over here again we were at month 15 to be profitable we're going to break even at month one let's jump jump into that really quick and show you exactly how that looks on here okay cool I think you I can leave it here and leave me on the screen and you can see this so you can see right here you are profitable you have accumulative profit of 0 you're breaking even at month one with just six residents in your home and as you progress beyond that you are just adding income on here so there's no

00:13:26
there's no negative Point um here when you start and over a 2-year period you hit this $330,000 Mark in profitability um there for your facility so these are two examples that that show you um give you an idea of what it's going to look like for you if you we're doing one of these two scenarios so again a 24mon difference your new facility from the ground up after two years you're got $145,000 in profit if you're starting something with an existing facility you're going to get to

00:13:59
$330,000 in profit there that's a difference of1 185,000 which is huge when you think about what that's going to look like especially when you think about um the 15 months where you have kind of that sunk cost with the new facility now all of that to say it doesn't mean that you starting a brand new facility uh starting from scratch renting from somebody that doesn't mean that um it's a bad decision because there's there's also a cost that goes into purchasing an existing facility

00:14:31
you're going to have to probably get an SBA or some other type of loan which is going to require a higher down payment than if you were starting out renting a home or purchasing um something new so there which which includes a large down payment so if you don't have The Upfront Capital to get started it doesn't mean that starting something brand new or converting your home or renting somebody else's home out is a bad decision it just means that your time to profitability might take a little bit

00:15:02
longer but it's okay you can still see here after 24 months you're still turning that profit of 145,000 if I were to do some quick math over here on on my calculator um let me look at this so uh let me click the correct app so 145,000 divided by 24 months you're still making $6,000 a month over that period on average which is not bad right um 6,000 times that by 12 if we're doing that that's a an annual salary roughly of $772,000 on average it's not a horrible um you know it's a pretty good

00:15:37
return if if you're looking at it from that perspective so you're able to to kind of do this and and see figure out what's going to work best for you but all of this is to say with these quick numbers to just kind of give you an overview of what this looks like you can be profitable um in in this scenario with a 10 bed facility $5,000 per month uh with the with those residents it's very possible for you to get there so I wanted to kind of just show that to you and give you some guidance on that if you are new to the

00:16:08
channel make sure you like the video subscribe and ring the bell as well so you get notified when we go live on all of these if you have questions please drop those in now I've got a few minutes that I could answer some questions for you but uh just want to remind you to to do these things we go live on the channel every Tuesday Morning um even when meta is having issues we're still going to go live um and then we put out form video content on Thursdays as well you can get over to the website Assisted

00:16:34
Living investing. net where you can get access to free resources I have an underwriting calculator um for those of you who might be interested in getting access to this template that I just used here uh on the call um type in template down below and I can build something out um for for you all to to get access to that as well because it's a very quick and easy way for you to look at some of these and run some of these numbers so if you are interested in that make sure or you type in template and I can put

00:17:01
something together for that in the next few days and uh for those of you uh who need some help launching that Assisted Living business get over to Assisted Living investing. net you can go to Assisted Living investing. netal there's going to be a link Down Below on that on the YouTube video for you to go to that you can get access to the accelerator course but if you feel like you need some extra coaching as you go along that process as you go along that Journey reach out to me on Facebook or get over

00:17:28
to assisted investing. net strategy and set up a call and I can talk you through my coaching process as well I I couple that in there with with the accelerator course that can really help you out through that I'm just closing up uh a a cohort of people coming into that and we'll probably open it up here in a few weeks again but I want to have those conversations if that's something that's interesting to you so either reach out to me on Facebook or Assisted Living investing. strategy and we'll set up a

00:17:58
call and have that conversation uh let's see anything else that I'm thinking of I don't see any questions coming in want to thank those of you who are watching and there might be questions I know meta is having issues um so make sure you type those in the comments below and if I didn't get to them here in the video then I will get to them afterwards I want to thank all of you for watching again if you want this free resource the business planning checklist get over to Assisted Living investing. netb checklist we'll

00:18:25
have links Down Below have it on the ticker I want to thank you all again for watching excited to help you along your journey help you launch your Assisted Living business so you can reach your dreams and achieve more time and Financial Freedom for you and your family thanks for watching and have a great day

Download Your FREE Calculator

Send Me My Calculator

Stay connected with news and updates!

Join our mailing list to receive the latest news and updates from our team.
Don't worry, your information will not be shared.

We hate SPAM. We will never sell your information, for any reason.