Will Your Assisted Living Business Be Profitable? Find Out Now!

assisted living business model assisted living business profitability assisted living costs and expenses assisted living financial planning assisted living investment strategies assisted living proforma projections assisted living startup planning assisted living underwriting financial analysis for assisted living starting an assisted living facility Mar 13, 2025

Starting an assisted living business is a rewarding venture, but ensuring profitability is essential for long-term success. To build a financially sound operation, it's crucial to understand underwriting—the process of evaluating the financial viability and risks of your business model.

In this guide, we'll explore what underwriting includes, its importance in assisted living investing, and the key elements needed for effective execution. By mastering these concepts, you'll be better equipped to create a thriving and sustainable assisted living facility.

Check out the video, too:

What Is Underwriting?

Underwriting is the financial analysis of historical and projected financials to assess whether an assisted living facility (ALF) is a profitable investment. It consists of two main components:

  1. Reviewing Historical Financials:
    When buying an existing facility, request documents like tax returns and profit and loss statements to understand the business's past performance.
  2. Projecting Future Financials:
    You can predict future performance using past data by considering factors like inflation, operational adjustments, and expected resident occupancy rates to enhance your projections.

Why Is Underwriting Crucial?

Underwriting helps you understand your business’ financial health. By looking at past data and future predictions, you can:

  • Identify potential risks or gaps in financial planning.
  • Understand your operating costs and how they may fluctuate over time.
  • Present a well-thought-out financial plan to lenders or investors.

Proper underwriting builds confidence in your numbers, ensuring your assisted living business is financially sound.

Steps for Successful Underwriting

  1. Gather Historical Financials:
    When buying an existing facility, obtain at least three years of financial records, as banks typically need this to evaluate average expenses like utilities, wages, and groceries.
  2. Calculate Averages:
    Calculate annual averages for each expense category and divide by 12 for monthly costs. For instance, if groceries cost $60,000 annually, the monthly average is $5,000.
  3. Develop a Monthly Proforma:
    Create a 24–36 month proforma to project monthly income and expenses, accounting for seasonal changes, one-time payments (e.g., taxes), and recurring expenses (e.g., insurance).
  4. Adjust for Future Variables:
    Consider factors like inflation and occupancy changes. For example, if grocery costs rise by 3% annually, update your proforma to reflect that.
  5. Account for Startup Costs and Debt Service:
    Factor in initial expenses like capital improvements and operating capital. Knowing your debt service is important for profitability.

Tools to Simplify Underwriting

Using specialized tools can make underwriting less daunting:

Refining Your Projections

Underwriting is an ongoing process. After creating your initial proforma, set it aside for a day or two, then revisit and reevaluate your assumptions. Repeat this to build confidence in your financial projections.

What’s Next?

If you're interested in diving deeper into the assisted living business, download your free Business Plan Checklist to help you create a successful business plan for your assisted living facility. In addition, consider applying to the Assisted Living Investing Mastermind program. This 12-month program is designed to guide you step-by-step toward owning and operating your own assisted living facility. With the added benefit of personalized coaching support, the program ensures you have the resources and guidance needed to succeed in this rewarding industry.

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.

Categories

All Categories $1 million dollar grant 1031 exchange for real estate investors 12 week year framework a place for mom access emr accountability for assisted living startups accounting tools for assisted living ach for assisted living ach payments for assisted living ach payments in assisted living activities for assisted living ada compliance in assisted living additional income assisted living adl tracking administrator admission agreement adult foster care license advantages of business credit cards affordable assisted living locations alf administrator training alf application process alf financial planning alf licensing step-by-step alf marketing strategies ali mastermind alternatives to assisted living and offering professional development opportunities. learn more at assisted living investing apply for assisted living license approval apps for assisted living facility apps for running assisted living homes asset protection assisted living asset protection for business owners assisted living assisted living acceleration course assisted living accelerator assisted living acquisition calculator assisted living administator assisted living administration assisted living administrator assisted living administrator hiring guide assisted living administrator license assisted living administrator licensing assisted living administrator requirements assisted living administrator salary assisted living agreements assisted living application assisted living application guide assisted living banking options assisted living behavior management assisted living bipolar disorder assisted living boise assisted living bookkeeping assisted living budgeting assisted living building safety assisted living business assisted living business banking assisted living business beginner guide assisted living business challenges assisted living business checklist assisted living business consultant assisted living business cost assisted living business credit cards assisted living business documents assisted living business efficiency assisted living business expenses assisted living business finances assisted living business financial planning assisted living business financing assisted living business for sale assisted living business funding assisted living business growth assisted living business guide assisted living business income assisted living business investment assisted living business launch assisted living business legal setup assisted living business lessons assisted living business loan assisted living business medicaid assisted living business metrics assisted living business milestones assisted living business model assisted living business models assisted living business operations assisted living business opportunities assisted living business organization assisted living business partnership assisted living business plan assisted living business plan checklist assisted living business planning assisted living business policies assisted living business processes assisted living business productivity assisted living business profitability assisted living business registration assisted living business regulations assisted living business resources assisted living business rewards assisted living business setup assisted living business start assisted living business startup assisted living business strategies assisted living business strategy assisted living business structure assisted living business success assisted living business tips assisted living business tools assisted living buyer tips assisted living calculator assisted living care assisted living care home startup assisted living careers assisted living caregiver wages assisted living caregivers assisted living cash flow assisted living cash flow strategies assisted living cell phone policy assisted living challenges assisted living change of ownership assisted living coach assisted living coaching assisted living coaching program assisted living community assisted living competition analysis assisted living compliance assisted living compliance checklist assisted living consultant assisted living contracts assisted living cost control assisted living costs assisted living costs and expenses assisted living course assisted living daily tasks assisted living dashboard assisted living debt service assisted living decor assisted living documentation assisted living down payment assisted living employee management assisted living entity formation assisted living entity setup assisted living expense management assisted living expenses assisted living experience tips assisted living facebook groups assisted living facilities assisted living facility assisted living facility acquisition assisted living facility administrator assisted living facility administrator pay assisted living facility administrator salary assisted living facility agreement assisted living facility business plan assisted living facility conversion assisted living facility evaluation assisted living facility for beginners assisted living facility for veterans assisted living facility forms assisted living facility funding assisted living facility growth assisted living facility hiring assisted living facility hiring tips assisted living facility hoa issues assisted living facility idaho assisted living facility investment assisted living facility license assisted living facility licensing assisted living facility licensing requirements assisted living facility loans assisted living facility management assisted living facility owner assisted living facility pay structures assisted living facility procedures assisted living facility profits assisted living facility purchase assisted living facility regulations assisted living facility renovations assisted living facility requirements assisted living facility services assisted living facility start-up assisted living facility tips assisted living facility tour assisted living facility transition assisted living facility upgrades assisted living fee schedule assisted living fees assisted living finances assisted living financial management assisted living financial metrics assisted living financial model assisted living financial modeling assisted living financial planning assisted living financial planning tools assisted living financials assisted living financing assisted living financing options assisted living financing tips assisted living fire code assisted living fire department inspection assisted living fire drill assisted living fire prevention assisted living fire safety assisted living food budget assisted living food costs assisted living for disabilities assisted living for schizophrenia assisted living for tbi assisted living franchise vs. consultant assisted living funding assisted living funding options assisted living grant opportunities assisted living grants assisted living growth strategies assisted living hiring process assisted living hiring tips assisted living idaho assisted living in boise assisted living in boise medicaid assisted living in colorado springs assisted living in idaho assisted living in nampa assisted living in nampa medicaid assisted living in nampa. assisted living in treasure valley assisted living in treasure valley. assisted living in utah assisted living income assisted living income levers assisted living inspection tips assisted living insurance assisted living insurance expenses assisted living insurance requirements assisted living investing assisted living investing mastermind assisted living investing tips assisted living investing tools assisted living investment assisted living investment analysis assisted living investment banking assisted living investment in boise assisted living investment in nampa assisted living investment opportunities assisted living investment strategies assisted living investment strategy assisted living investment tips assisted living investment tools assisted living investor pitch assisted living job satisfaction assisted living joint venture assisted living kpis assisted living landlord assisted living launch formula assisted living launchpad assisted living lease agreement assisted living legal advice assisted living legal structure assisted living lenders assisted living levels assisted living liability assisted living liability protection assisted living license assisted living license application assisted living license application florida assisted living license application process assisted living license benefits assisted living license by state assisted living license checklist assisted living license documents assisted living license process assisted living licenses and permits assisted living licensing assisted living licensing and compliance assisted living licensing department assisted living licensing fees assisted living licensing process assisted living licensing requirements assisted living licensing rules assisted living llc assisted living llc setup assisted living llc vs s corp assisted living loan assisted living loan application assisted living location selection assisted living management assisted living management tips assisted living management tools assisted living market analysis assisted living market research assisted living market saturation assisted living marketing assisted living marketing strategies assisted living marketing strategy assisted living mastermind assisted living medicaid assisted living medicaid billing assisted living medicaid certification assisted living medicaid provider assisted living medicaid reimbursement assisted living mental health assisted living mentorship assisted living mortgage assisted living nampa assisted living net income assisted living network groups assisted living networking assisted living occupancy assisted living occupancy calculator assisted living operational guidelines assisted living operations assisted living operator assisted living operator lease assisted living operator salary assisted living options assisted living organizational chart assisted living organizational structure assisted living ownership assisted living ownership structure assisted living partnership assisted living partnership success assisted living partnerships assisted living payment methods assisted living payment models assisted living payment options assisted living payment systems assisted living payment tracking assisted living payments assisted living payroll assisted living payroll software assisted living payroll solutions assisted living placement agencies assisted living planning assisted living planning guide assisted living planning tools assisted living policies assisted living policies and procedures assisted living policies for tbi assisted living policy and procedure guide assisted living policy change assisted living policy creation assisted living procedures assisted living productivity tips assisted living profit assisted living profit margins assisted living profit medicaid assisted living profit model assisted living profit strategy assisted living profitability assisted living proforma projections assisted living property assisted living property conversion assisted living property search assisted living property selection assisted living property zoning assisted living purchasing process assisted living real estate assisted living referrals assisted living regulations assisted living regulations and licensing assisted living regulations idaho assisted living reimbursement assisted living reimbursement model assisted living reimbursement rates assisted living rental property assisted living resident engagement assisted living residents assisted living resources assisted living revenue streams assisted living roi assisted living roles assisted living safety assisted living safety regulations assisted living sba loans assisted living scalability assisted living services assisted living software assisted living staff assisted living staff compensation assisted living staff for mental health assisted living staff management assisted living staff pay assisted living staff promotion assisted living staff ratios assisted living staff retention assisted living staff training policies assisted living staff turnover assisted living staffing assisted living staffing challenges assisted living staffing costs assisted living staffing efficiency assisted living staffing requirements assisted living startup assisted living startup capital assisted living startup costs assisted living startup financing assisted living startup funding assisted living startup guidance assisted living startup guide assisted living startup loans assisted living startup options assisted living startup planning assisted living startup steps assisted living startup tips assisted living state survey preparation assisted living success assisted living success tips assisted living tax benefits assisted living tax deductions assisted living tax planning assisted living tips assisted living tools assisted living tour guide assisted living training assisted living underwriting assisted living underwriting calculator assisted living utilities assisted living vendor contracts assisted living vs nursing home assisted living without a license assisted living zoning laws assisted living zoning regulations assisted living zoning requirements assisted lving bullet journaling attract medicaid residents attract residents to assisted living attracting hospice residents avoiding bank fees for assisted living back billing medicaid backup plans for assisted living banking for assisted living banking for assisted living in boise barber shop assisted living becoming a medicaid provider beewell assisted living behavior plans for group homes behavioral issues tbi benefits of assisted living consultants benefits of business partnerships benefits of llc benefits of working with a broker best apps for care home management best bank for assisted living business best banks for sba loans best business entity for assisted living best business structures for assisted living best credit cards for assisted living owners best credit cards for groceries best credit cards for rewards best home for assisted living best location for assisted living best locations for assisted living homes best payroll software for small businesses best places for assisted living best places to find caregivers best software for senior care best states for assisted living big-box assisted living facility bizbuysell tutorial boise assisted living brain injury care policies brandon gustafson break even in assisted living broker payment structure budgeting for assisted living build assisted living facility build community in assisted living build reputation assisted living building a profitable assisted living facility building a successful assisted living facility building a team for assisted living building an assisted living empire building an assisted living home building business credit building business credit for startups building community relationships building relationships with case managers building relationships with private lenders building trust with lenders bullet journaling bullet journaling and google calendar bullet journaling for business bullet journaling for entrepreneurs bullet journaling for planning bullet journaling for small business owners bullet journaling in assisted living business business bank account business bank account for assisted living business banking for assisted living facilities business broker relationships business credit assisted living business credit card tips business credit cards business credit cards for assisted living business credit for assisted living business debit cards business development programs business entity for assisted living business entity formation business entity registration process business entity types business launchpad for assisted living business partner vetting business partnerships business plan business plan assisted living business plan checklist business plan checklist for lenders business plan for assisted living business plan for assisted living facility business plan template business planning business planning for assisted living business protection strategies business registration business startup business structure business structure for assisted living business structure for care home buy a business online buy an assisted living facility buy assisted living business buy assisted living facility buy assisted living home buy vs build assisted living buying an assisted living facility buying an existing business buying assisted living facilities buying assisted living facility buying property for assisted living buying vs building assisted living cap rate calculation for assisted living care assessment care facility management apps care home care home business care home business plan care home business tracking care home funding and grants care home insurance care home investing care home license care home profitability care home vs residential assisted living care plan documentation caregiver application form caregiver background check caregiver benefits caregiver cell phone guidelines caregiver certifications caregiver compensation caregiver hiring process caregiver job description caregiver loyalty caregiver onboarding caregiver pay rates caregiver responsibilities assisted living caregiver to resident ratio by state caregiver wages caregivers caregivers in assisted living cash back rewards cash flow analysis cashback credit cards for business owners certificate of occupancy certificate of occupancy requirements change of ownership (chow) assisted living checklist choosing a business credit card choosing a business partner choosing business partners choosing the right location for assisted living city and state registration for assisted living city planner role city regulations city zoning assisted living city zoning for care homes city-specific licensing closing process assisted living cloud storage for small business coaching for assisted living cognitive decline in elderly collect payments assisted living collect rent assisted living colorado assisted living facilities colorado medicaid assisted living commercial broker commercial insurance for assisted living commercial real estate loans assisted living communication in assisted living communication strategies for caregivers competition analysis compliance compliance in assisted living compliance in assisted living facilities conducting virtual tours consistent communication in assisted living construction for assisted living construction loans for assisted living construction loans for assisted living facilities consultant cost considerations contingency planning for assisted living conventional mortgage assisted living convert home into assisted living convert home to assisted living converting a home into assisted living converting a house to assisted living converting home into assisted living cost cost of staffing in assisted living creating a business partnership creating a vision for business creative financing for senior housing creative funding for assisted living credit credit card fees assisted living credit card point conversion credit card point values credit card reward comparison credit card reward systems credit card rewards credit card rewards for assisted living credit card rewards for small business credit card rewards for small businesses credit options for assisted living investors credit unions for assisted living business crime rates crowdfunding for assisted living daily life management tools daily organization methods daytime vs. nighttime caregivers debit vs. credit cards for entrepreneurs defining business goals delegating tasks in assisted living developing relationships with sellers dietitian for elderly differences between administrator and operator digital records direct deposit for assisted living direct deposit setup directed care assisted living discover strategies to mitigate turnover in assisted living facilities by fostering open communication do assisted living facilities need an npi do i need an attorney for assisted living does my care home need an npi down payment for assisted living facility due diligence assisted living due diligence process economies of scale in assisted living effective communication in assisted living effective daily planning effective underwriting tools for real estate efficiency in assisted living operations ehr for assisted living ehr system for residential care elder law attorney elderly care communication emergency exit requirements for assisted living emergency preparedness for staff emergency preparedness in assisted living employee benefits for caregivers employee documentation employee training records end-of-life care in assisted living enforcing workplace policies entrepreneur time management tools entrepreneurship lessons estate investing evaluating assisted living facilities executive director existing assisted living facility extra operating capital facility administrator facility administrator assisted living facility design facility due diligence facility evaluation facility inspection facility license timeline facility licensing process facility maintenance facility maintenance and updates fair housing act fair housing act assisted living family caregiver reimbursement family involvement assisted living fill assisted living beds filling assisted living beds filling assisted living vacancies financial agreements for business partners financial analysis for assisted living financial automation for assisted living financial calculator real estate underwriting financial considerations for hospice care financial freedom in assisted living financial management financial management for assisted living financial management in assisted living financial planning financial planning assisted living financial planning for assisted living financial planning in assisted living financial projections financial projections for lenders financial systems for care homes financial tips for assisted living investors financial tools for small businesses financial underwriting financial underwriting for assisted living financial underwriting for partnerships financing financing an assisted living facility financing assisted living financing for assisted living financing options for assisted living finding a business partner finding a partner for assisted living finding assisted living facility finding off-market deals finding property for assisted living finding residents for assisted living fire and safety regulations for assisted living fire department approval for assisted living fire department inspection assisted living fire extinguishers fire inspection checklist for assisted living fire marshal inspection fire marshals fire protection in assisted living fire safety compliance fire safety in assisted living fire safety regulations fire suppression fire suppression for assisted living homes fire suppression systems fire suppression systems for care facilities fire system installation fitness for seniors forming an llc franchise vs. established business free notion account funding funding an assisted living facility funding for assisted living funding for assisted living business funding for assisted living in treasure valley getting started google calendar google calendar productivity google calendar scheduling government grants for assisted living grandfathered in assisted living grant funding for assisted living grant proposal grant reporting grant writing for assisted living grant writing template grants grants for assisted living grants for assisted living business grants for assisted living facilities grants for assisted living startups grants for senior care gross income grove menus assisted living grow assisted living business growing assisted living facilities guaranteed payments guaranteed payments in assisted living gusto for small businesses gusto payroll for caregivers gusto payroll review gusto payroll tutorial gusto setup hard money loans hard money loans assisted living hard money loans for assisted living hard money loans for real estate hcbs medicaid health agency licensing health care facility license health department inspection assisted living healthcare access in senior living healthcare business opportunities healthcare compliance assisted living healthcare provider npi for assisted living healthcare service providers high-interest debt in business finance hiring a consultant for assisted living hiring a consultant for assisted living business hiring administrators hiring an assisted living administrator hiring an assisted living consultant hiring an assisted living facility administrator hiring assisted living staff hiring caregivers hiring for assisted living hiring for assisted living facilities hiring staff for assisted living hoa and assisted living hoa bylaws and business hoa cc&rs assisted living hoa restrictions home equity line of credit assisted living hospice care hospice care integration hospice care regulations hospice in assisted living hospice provider partnerships hospice services in assisted living hot to obtain license hourly vs. salary wages house manager how assisted living facilities get paid how long to profit in assisted living how many beds in assisted living how much does medicaid pay for assisted living how much to pay an assisted living administrator how to accept medicaid how to accept payments for private pay how to become a medicaid provider how to become an assisted living administrator how to buy an assisted living business how to choose an assisted living property how to connect with sellers how to create a business plan how to create assisted living policies how to fill assisted living beds how to fill beds in assisted living how to fill out assisted living forms how to finance assisted living how to find a business partner how to find an assisted living consultant how to find the right lenders how to fund an assisted living business how to fund assisted living how to get an assisted living license how to get an npi for assisted living how to get an sba loan how to get medicaid approved how to get medicaid certified assisted living how to get more residents how to get paid with medicaid in assisted living how to get va funding for assisted living how to hire an administrator how to hire an assisted living administrator how to hire caregivers how to invest in assisted living how to make money in assisted living how to manage resident care levels how to market a care home how to obtain an assisted living license how to open a care home how to open an assisted living facility how to open an assisted living home how to partner in assisted living how to pay assisted living operators how to pay for assisted living how to plan assisted living expenses how to qualify for assisted living loan how to raise medicaid rates in assisted living how to raise private capital how to register an llc for assisted living how to rent to assisted living operator how to run an assisted living facility how to run payroll in gusto how to scale care homes how to serve different populations in assisted living how to start a care home how to start an alf how to start an assisted living business how to start an assisted living business with a partner how to start an assisted living facility how to start an assisted living home how to start an assisted living home for veterans how to start an unlicensed care home how to start assisted living how to start assisted living business how to stay organized in assisted living how to track assisted living performance how to use notion for beginners how to work with brokers hud grants for assisted living hud loans assisted living hud loans for assisted living idaho medicaid for seniors idaho medicaid waiver ideal cities for assisted living identity protection implementing processes in assisted living in-person facility tours in-person meetings for assisted living in-person tour income ranges increase medicaid payments assisted living independent living options independent living vs assisted living institutional knowledge in assisted living insurance broker benefits intake form integrating hospice into assisted living integrating notion and google calendar intellectual disability home care internet marketing for assisted living investing in assisted living investing in senior housing investment investment property evaluation investment strategy investor partnerships invoicing software for assisted living joint venture in assisted living joint ventures key performance indicators for assisted living landlord assisted living launch a care home launching an assisted living business launching assisted living launching assisted living business lead magnet for care homes leadership in assisted living lease assisted living facility legal issues in assisted living legal partnership agreements legal protection for assisted living legal requirements for assisted living legal requirements for assisted living business legal requirements for hospice care legal structure for assisted living lender organizational chart lender relationships for assisted living lenders levels of care in assisted living liability insurance for assisted living liability protection liability protection in assisted living license for assisted living facility licensed administrator assisted living licensed assisted living facility licensed vs unlicensed care homes licensing licensing and regulations for assisted living licensing approval licensing assisted living facilities licensing for assisted living licensing for tbi care licensing process for assisted living licensing requirements life safety code limited liability company