Why Touring Before Buying is Crucial for Assisted Living Investors
Nov 27, 2024
When you’re buying an assisted living business, touring the facility is a big deal. Sure, looking at documents and talking with people helps, but seeing the place in person (or even on a virtual tour) gives you important details that paper alone can’t show. Let's talk about why touring is essential and what you should look for.
Check out the video, too:
Why Touring Matters
Here’s the truth: a tour shows you what an inspection report can’t. Touring a facility lets you see the property, check for issues, and get a feel for the staff and residents’ daily lives.
1. Spot the Hidden Details
Sellers have to share a lot of information, but some details might get missed. When you visit, you can see things that impact the business, like how staff treat residents, how clean the place is, and how things are set up.
2. Check Out the Physical Condition
In person, you can see stuff that photos might not show, like paint, flooring, windows, appliances, and important systems like heating and air conditioning. Noticing any wear and tear now means you avoid big surprises later.
3. Build Key Relationships
Tours help you meet the important people, like the seller, broker, and staff. Getting to know them can make the buying process easier and help you work better together if you take over.
Virtual Tours vs. In-Person Tours
You can take a virtual tour or in-person tour (or both!). Virtual tours are great because you can explore on your own time and go back to spots you want to review. In-person tours, on the other hand, let you get a real sense of the place—you can feel what the atmosphere is like and get a close-up look at everything.
What to Focus On During a Tour
So, what should you be checking out? Here are some key areas:
1. Cosmetic and Functional Checks
Look closely at things like paint, floors, and appliances. These show how well the place has been kept up. Check for cleanliness and any signs of neglect, as these can reveal a lot about the facility’s care standards.
2. Staffing and Culture
See how staff interact with residents. A well-maintained, friendly environment says a lot about the culture and can make your transition into ownership smoother.
3. Resident’s Quality of Life
Observe the residents’ living conditions and activities. Happy, well-cared-for residents usually mean the place is well-run and focused on quality care.
When to Consider a Fixer-Upper
Don’t be quick to dismiss facilities that need a bit of sprucing up. If a place just needs fresh paint, new cabinets, or a few other cosmetic fixes, it could be a great deal. But if there are big issues like a broken foundation or leaking roof, that’s a much bigger investment and safety risk.
Ask All the Questions!
Don’t hold back on questions during the tour. Ask why the seller is moving on—this can give you clues about the business’s current state. Maybe they’re retiring or moving on to new ventures, opening up a chance for you to continue their work.
Final Thoughts
A tour is an essential part of buying an assisted living business. It lets you spot hidden details, check the physical condition, and meet key people. So, take your time, ask questions, and make sure to look closely at everything, from the condition of the property to how happy the residents seem. Whether you tour in person, online, or both, this step is crucial to making a smart investment decision.
Download our Business Plan Checklist to ensure you have a comprehensive business plan in place for when you've found the perfect property.
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Show full transcript 👇
Transcript
00:00:01
[Music] hey guys welcome back to assisted living investing it's brandon gustafson welcome back to the channel today we're going to talk about the importance of touring a facility the last two videos we've been talking about virtual tours and in-person tours just want to go over why it's important to do a tour of a facility and why you should do it make sure that it's a part of your underwriting and your due diligence process why it's important so like i mentioned we talked about virtual tours
00:00:38
we talked about in-person tours and and their importance and how you set them up the last couple of videos but this time we're just going to go over why it's important to to have that tour and what you should be trying to get out of of that tour as you're as you're going through and looking at the facility so why is touring a facility important what makes it so important to do there are several reasons why it's going to be important i'm going to run through those today for you so that you can kind of
00:01:07
get a feel for what why it's important number one the first thing you gotta recognize and realize is by law sellers are required to disclose a lot of the information to you but sometimes they don't and it's not because they're trying to hide anything it's just because they have been at the house for years and and they don't they don't recognize they don't see some of those things that that you as as a new buyer might be aware of and you might see or they're really not that big of a deal but you
00:01:35
want to be aware of them and so you want to make sure that you're doing it for that sellers are required to disclose information to you as as the buyer so a lot of the information you're going to be getting from them you're going to get a lot of information from the home inspection some things that you can look at though as you are doing your your own tour of the facility it's like the quality of life is the residence staffing patterns the upkeep of the house those are the types of things that
00:02:01
you just can't get as you're having conversations they're not really required too much to disclose those types of things but things you want to be aware of you want to make sure that those things are good we've talked a lot about culture and past videos and make sure that that culture is there so that you have a good foundation on what you can build to then continue and have a successful facility and you're not having to change a whole reputation you're not having to to you know do an entire new staffing model
00:02:28
you're not having to to bring in all brand new residents that you can have some kind of a base a good foundation to start on and then from there you can start increasing uh things you can start changing the the staffing model you can start looking at changing the culture of the facility but if you start off with a good base you're going to be in a much better position so those are a couple of things that you just can't get they're not you know things that the seller is necessarily going to disclose so you
00:02:54
want to make sure you're aware of those and you're you're seeing them as you're doing your walkthrough of the facility the other another thing that you want to to make sure that you're aware of as you're doing the the tours are just things that you can't get as you're looking at photos or even doing a virtual tour of the facility and we've talked a lot about these but it seems like paint and flooring windows appliances maintenance on on some of those big things like the hvac you want to make
00:03:20
sure you'll be able to see those and see how they're functioning see how they look uh somebody could take a picture of something and even that like even a close-up just a still photo of that like is specific to the the hvac unit or something like that um it's so much better to be there in person get your hands on and see what it feels like see how old it actually looks is there dust around it or did they like dust it off really quick before they took the photo those types of things you want to be
00:03:48
able to see and get a real feel for exactly what it looks like and also as i mentioned in the past the fire suppression system it's key you want to make sure it's there ask questions about it is it functioning or those are things that are really important that you want to make sure that you're aware of as you're doing that that tour it's just super important to have a good understanding of how things are in the house cosmetically and uh functionally to make sure that it's
00:04:16
gonna be something that you're comfortable with and you're not gonna have to go in and spend 20 grand uh to get things up up to date unless you're finding something that that's what you want to do you basically want to flip something in that case go for it uh but if you're looking for something that you can just go in it's basically turnkey um you want to make sure that you're aware of some of these these types of information uh the status of some of these things another key part of of the
00:04:41
the tours is having face time whether virtual or in person with the seller uh with the listing agent with your broker with staff with residents having face time is something that is is gonna just help out with that transition it's going to help out with the acquisition people don't look at you as a complete stranger getting that face time is key and it's not something you can get just through emails so develop starting to develop that relationship it's really good to have a relationship with that
00:05:09
seller as you're going through the process and maintain that relationship and make sure it's a good one because you're going to have questions that that seller is going to have the answer to and if you burn that bridge or you have a really bad experience with them throughout the the process where you're purchasing the facility you're not going to be able to reach out to them you're just going to have to fumble your way through it developing that relationship is key and getting that face time with them through
00:05:34
these tours is going to help you on your journey to purchase the facility so that's another thing that is really key uh developing that relationship getting that face time and having conversations together with that person we touched on this one in in the last video is it okay to do both a virtual and an in-person tour of a facility and absolutely it's it's i think it's totally fine to do it it shows that you're you're very interested in the facility there are things that you can capture
00:06:02
in a virtual tour that you might not be able to to catch when you're doing an in-person tour because you're you're sitting back you're not engrossed in everything you can see things you can say oh hey could you go back and look at that it might feel a little more comfortable to ask people to retrace their steps in a virtual tour situation whereas an in-person door you're able to actually get there you can touch things you can see how it is you can see exactly how big it is i get
00:06:23
a real feel for things doing both of them is something that i would highly suggest if you're able to reasons we went over reasons why you might or may not in our last video so make sure you go watch that one for some of that information but i would highly suggest doing both it gives you a lot of opportunity to to further develop a relationship you're having multiple conversations you're showing and expressing a lot of interest by doing both types of of tours of the facility virtual and in person and also you're
00:06:52
able to see things in a different light you're able to see it at different times of day you're able to see it in different perspectives and being able to do that is just a good way of doing extra due diligence to make sure that you're comfortable with the facility that you're purchasing so definitely try to do both if you can at the very least do one of them absolutely do one is there a reason that you would not do a tour of a facility we talked about this again in the last video about in-person tours uh for me no
00:07:20
and i think you're probably at the same level as i am where you're looking at residential smaller residential facilities doing an in-person or a virtual tour is key to the due diligence process and purchasing it chances are if you're looking at these types of facilities it's probably one of your you're a beginner investor you're beginning in getting into this asset class i and that's fine and so doing that tour is extremely important i would highly highly encourage you to
00:07:50
have a tour of the facility as a part of your due diligence process are there instances where you may not do it i would say there probably are but at the level that you're likely investing in right now um probably not we talked about this in the last video if you are looking at buying a big portfolio you know there's 10 facilities geographically they're kind of spread out across the state or even in multiple states getting to them just isn't feasible and spending time doing virtual tours of every single one of
00:08:18
those is going to be a headache for you to coordinate with the seller and the administrator is just going to be a pain in that instance maybe you're just doing a couple of them or purchased several facilities you're already kind of aware of of some of the inadequacies of those facilities and what they might need in that instance maybe you don't do it but for the most part i think yes you're going to want to make sure that you build that into your timeline into your due diligence process that you are doing
00:08:45
an in-person or a virtual tour of the facility or both and making sure that that you are comfortable with the facility that you are purchasing so yeah absolutely you want to do it um very few instances where you're not going to want to do that if you have questions about that or comments make sure you comment down below so that we can have that discussion together as a part of a part of the community love to hear your perspectives your experiences doing tours of facilities maybe you had a bad experience maybe had
00:09:11
a good experience i'd love to hear about those and kind of what what happened as you were doing a tour of the facility the the last question is is probably should you walk away from a facility that that needs a lot of cosmetic updates and i would say not necessarily it might be a really good opportunity for you to have a value-add property where you're able to get it for a lot less than it's worth because it needs a lot of pain it needs some updating in the cabinets you know maybe it's a a 30
00:09:37
year old home and it looks like it's 30 years old and you need to do some updating to it and you're able to get it for less than it's worth put in a you know build into your budget a contingency or or a repair a renovation budget so you can go in and make those cosmetic updates get it so it's it's up to date and and now you have like a really good asset because you've done some improvement on the on the property but it's also a good thing that you can market you know
00:10:06
updated house updated facility come check it out you could do an open house you can get people in and and walking through it i think it's a really good opportunity for you to do that if there are things that are structural maybe you don't want to do that because you you do need to have a higher level of safety in mind as you're dealing with residents and their families and things like that you want to make sure that it's not you know you don't have any big foundation issues or the roof isn't collapsing
00:10:32
those types of things you might want to stay away from but if it's cosmetic and it just needs new paint maybe new cabinets in the kitchen you've got to update bathrooms um some plumbing fixtures things like that i would say do it i think that's a great opportunity for you to to put some some personal touches on there get it looking really nice something that you would want your grandparents or your parents to to be living in and go from there so i would say go for it if it's something that
00:10:58
just needs some cosmetic issues i don't think you need to be scared of it i've been looking at a few opportunities personally and that's what they need is cosmetic updates and right now i'm just not in a position where i can buy another one it'll probably be a couple years before we get there it's something that we're very strongly considering because if we spend 10 grand and we're able to update this facility and create some economies of scale for us then awesome
00:11:22
it's a new facility we can rebrand it as that we can do start doing walkthroughs and doing open houses and things like that i think it would be an awesome opportunity so i would i would encourage you to very strongly consider things that need those cosmetic updates just in recap facility tours are an extremely important part of your due diligence process highly encourage that you take the time to do a virtual or an in-person tour or both make sure that you're you're doing that as part of
00:11:50
your due diligence process make sure you're developing those relationships with the seller the administrator staff residents make sure you're getting in there that you are getting some exposure to exactly what it looks like and how it feels it's such an important part as you're looking through and considering purchasing a facility very very highly recommend that you do that type of a of a tour i'd love to hear your comments down below i'd love to see kind of what your experience has been have you been
00:12:16
able to set up in person virtual tours uh what has your experience been have you had any just not fun experiences where it's just kind of then you walk through and it's just like oh i can't do this one or you walk through it it's just like oh this is awesome i'd love to have this why are you selling this facility that's another key thing that i would make sure you're asking sellers make sure you're asking why you are selling they're going to tell you but make sure that that is
00:12:39
something on there you're having that conversation with them and it could be that they're just ready to retire they're ready to move out life situations a lot of times that's what you're going to find and that's totally fine and you're able to be there help them solve that problem and help them move on and then you get to to get into the industry and just it's so wonderful i'm so excited for you to start down this path and see where it leads you make sure you like comment subscribe to
00:13:06
the channel uh make sure you're reaching out to me on other social media tick tock uh twitter instagram and facebook on the facebook group we'd love to have you over there for conversations and let's all learn together i'd love to hear from you your experiences and thanks for watching assisted living investing and i'll talk to you next time have a good one you
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