I’m looking at starting a residential assisted living facility in the future. My experience as a nurse practitioner tells me that this could be a very successful business. In my planning I have figured that labor can go no higher than 40% of revenue in order to contain costs. The average rent for residents is about $3,800 per month. With a facility that would house 10 residents 1 facility could bring in between $38,000 and $30,400 monthly before all expenses considering an 80% occupancy rate. Labor costs would run about $15,200. This would leave between $22,800 and $15,200 to cover day to day expenses. I was figuring the split might go this way 40% for labor, 40% for expenses, and 20% profit. I was wondering what anyone thinks of this breakdown. I figured the labor costs as 40% of the full occupancy amount since the facility will need to be fully staffed 24/7. Any suggestions or ideas would be appreciated. Thanks in advance!
We have been examining the same things though smaller facilities as Florida can have 6 residents under the right circumstances. I was crunching your numbers using % is a good start but you need to look at how many staff you would need for 10 residents 24/7. Add up the number of hours for that coverage and divide the total into the 40% of your anticipated Gross Income. Feel free to message me. Just a note many times the 20% profit ends up being the salary for the nurse/owners salary or pay to a manager.
@Walter Beitusch l looked into a alf however went into Mfh. What I saw what's that an ALF was too intensive of a business. I was looking for a passive game.
@Walter Beitusch I would like to speak to you regarding this topic.
I went to a miniature version of Gene Guarino's ALF training today. It is super interesting to me and I'd love to get into it, but I feel overwhelmed with the amount of information that I need to learn! I honestly can't find much about this on the internet and many RE investors seem unfamiliar with it. I'd love to learn more from people who are already in the business and to network with others who are interested in ALFs.
Yes, my eyes were opened to this through Gene Gaurino. I am planning to attend the 3-day training in Phoenix at the beginning of Dec. I think the business model seems very solid, but there is no doubt this is a full-time business and a lot of work to start up. But, I think it really makes sense with the demographics with the baby boomers retiring, etc and what Gene calls the "silver tsunami." This business could be extremely successful, but definitely not a passive income situation.
Shazia, I was at the thing two weeks ago here in SLC. Lets connect. 8018707604
@Maria Fortner I’m sorry that I have not been on here in a while. I would be more than happy to discuss this with you sometime.
I am glad I came across this thread, I am interested in doing the same thing here in Kentucky. I met with the SBA on this pass Monday. Anyone have any updates they want to share?
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