Ground up construction for residential assisted living.

Dustin Randy · 2025-06-04T09:07:47-07:00

We are planning on building two residential assisted living and memory care homes here in Las Vegas/Henderson. The current state of assisted living is largely the big box multilevel facilities where care and personal attention to the residents tends to suffer. We will be building smaller scale buildings where seniors can age in place in a more home-like environment with personalized care. We have partnered with an experienced operator/mentor out of Texas who recently finished completion of two more 16 bedroom homes and will be utilizing his blueprints which will need to be adapted for Nevada compliance and local aesthetics. His organization provides access to development, operations, and marketing experience. We are new to development though my wife and I have about 30 years of healthcare experience between us as a Physician Assistant and Nurse Practitioner. We love the idea of investing in this area as it is not only highly lucrative but provides a much needed service for seniors who are being poorly served.We were initially planning on using SBA financing to acquire the land and fund the construction and working capital all in one and have been in talks with a few SBA lenders who are comfortable with this business model. However, given the realistic timelines of the rezoning and permitting process as SBA needs all that done prior to funding, it's not going to be feasible to find a seller willing to have a property under contract for that length of time. Our two paths forward look like getting a property under contract through the 4-6 months for rezoning then closing with a bridge loan which will later be subsumed with SBA funding, vs seller funding or JV with a current property owner.We could use advice on the best way to obtain funding for the land acquisition. Funds for the down payment will be raised from investors so we don't have the cash on hand, but we both have stable W2 jobs with ~400k household income and credit scores over 800.We would also welcome advice on what a JV split would look like with a property owner.

Mike H.

Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes

1y

I guess I'm seeing some key data points missing. But the other most important thing is that you absolutely need to find a seller of the land that will wait for your rezoning process before you close. Or else you should keep looking. So stick with the sba loan and just find the right seller - even if you have to offer him a little more on the purchase price for the wait.

You absolutely don't want to risk buying the land and then having it turned down in the permitting process for your use. Then what are you going to do with the land. The idea that any village or county is just going to rubber stamp your approval for rezoning is not an assumption you want to make.

Some of the other questions are How much is the land itself? And the other is with 400k in income how do you not have any cash in the bank to invest with? At some point, you might be able to pull this off with little to no money out of your own pocket. But you're going to hit some roadblocks if you're looking to do something of this scale with no money of your own.

And You're wanting to build two RAL homes? Are they going to need to be on the same piece of land? Are they both going to be 16 room homes or similar in size? What are the estimated build costs? Can you do one at a time? Can you do them on separate pieces of land?

It would seem better to me to do one home at a time - Each on its own piece of land so that you can minimize your holding costs as you do your build. And then once you're done with the first one and the home is stabilized with residents and income, you could use some of that income to make your interest payments on the second home project.

Looks like a fascinating project. And its good you have a mentor on the deal with experience. Having 400k in income will help but its going to be something that comes up if you say you don't have cash on hand. Most investors and/or the sba is going to want to see you have some real skin in the game on any loan they do.

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Dustin Randy
OP
Member since 2022 · 2 posts · 1 vote
1y
Quote from @Mike H.:

I guess I'm seeing some key data points missing. But the other most important thing is that you absolutely need to find a seller of the land that will wait for your rezoning process before you close. Or else you should keep looking. So stick with the sba loan and just find the right seller - even if you have to offer him a little more on the purchase price for the wait.

You absolutely don't want to risk buying the land and then having it turned down in the permitting process for your use. Then what are you going to do with the land. The idea that any village or county is just going to rubber stamp your approval for rezoning is not an assumption you want to make.

Some of the other questions are How much is the land itself? And the other is with 400k in income how do you not have any cash in the bank to invest with? At some point, you might be able to pull this off with little to no money out of your own pocket. But you're going to hit some roadblocks if you're looking to do something of this scale with no money of your own.

And You're wanting to build two RAL homes? Are they going to need to be on the same piece of land? Are they both going to be 16 room homes or similar in size? What are the estimated build costs? Can you do one at a time? Can you do them on separate pieces of land?

It would seem better to me to do one home at a time - Each on its own piece of land so that you can minimize your holding costs as you do your build. And then once you're done with the first one and the home is stabilized with residents and income, you could use some of that income to make your interest payments on the second home project.

Looks like a fascinating project. And its good you have a mentor on the deal with experience. Having 400k in income will help but its going to be something that comes up if you say you don't have cash on hand. Most investors and/or the sba is going to want to see you have some real skin in the game on any loan they do.

Hey Mike, thanks for your response.
The special use permit for the zoning is expected to take 4-6 months, and what local developers and an experienced land use attorney have told us is that permitting through the county is realistically going to take at least a year, maybe 18 months. I don't think it's going to be possible to find any seller willing to hold the land under contract for 1.5-2 years, so that really ties our hands with regard to buying the land through SBA.
We have an offer on a parcel at 2.5 acres for $1.1mil, with zoning and financing contingencies so we would only close on the property if the SUP has been granted. We feel that most of the risk will of buying the property will have been mitigated once zoning is granted. The current owner had been planning on splitting the lot into 4 ~ 0.5 acre parcels on a Cul-du-sac, so that gives us an alternate exit if for some reason the building/civil permits couldn't be granted.
It's a fair question about our savings, but we've only been at this income level the last ~1.5 years and are coming off several years of partial single income due to me being in school and us having 5 kids within a 3.5 year period, so she wasn't working for a lot of that time. Most of the initial higher income has been paying off debt and buying our primary residence so we're building the cash reserves now. We will be into this deal at least $100k ourselves.
These will be two 18 bedroom homes, expanding on the 16 bed model to maximize the required caregiver-resident ratios, on the 2.5 acres. Estimated build cost is ~$2.3mil per home. While it initially made sense to do one home at a time, what other operators doing a similar model have found is that given the high up front costs of the land, permitting, licensing, and civil work, a single home would have difficulty meeting the SBA lenders DSCR targets. They ended up being debt limited and would have had to raise a huge amount and give away an unacceptable amount of equity. Building two homes allows the up front costs to be spread over the two homes.
I'm happy to share any further info, this is an incredibly lucrative and rewarding investing path. Our chief roadblock at this time is finding a lender for the takedown loan of the land.
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Parker Schultz

Lender · San Diego · Member since 2025 · 39 posts · 6 votes

1y

Nevada requires your lender to have a brick and mortar office in the state in order to lend there. This drastically reduces the lending pool, as a private lender myself, I just simply can't lend in Nevada given my operations so I pass on it.

Raw, untitled land is getting around 40% financing now a days of the AS-IS value. Up to 50% for highly desirable markets.

Is your partner/mentor contributing any cash into the deal or signing any guarentees? It sounds like they are just giving you the plans and maybe some construction oversight. Are they a licensed general contractor in Texas? if so, probably not in Nevada.

Whats the budget here? Current land value, land value after receiving permits, and completed value?

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Ki C Chan

Member since 2021 · 13 posts · 3 votes

1y

Why not just purchase a home and do the assisting living space? one step at the time, instead of jumping all in. I guess I know whose the mentor or group that you were referring to. I was think about the same thing in Las vegas since the LTR is not going to let you cash flow. I was thinking buy a home and rent to the operator

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Henry T.
Member since 2022 · 1k+ posts · 1k+ votes
1y
Quote from @Ki C Chan:

Why not just purchase a home and do the assisting living space? one step at the time, instead of jumping all in. I guess I know whose the mentor or group that you were referring to. I was think about the same thing in Las vegas since the LTR is not going to let you cash flow. I was thinking buy a home and rent to the operator
I was thinking the same thing. Just remodel the bathrooms for walk in shower/wheelchair, tile floors, whatever, larger eating area perhaps. I don't know about Vegas, but in Hawaii and Washington, residential care homes are limited to 5 clients, and must have at minimum a registered nurse on call. Rezone not required. This is a much needed service and I commend the OP for considering this venture. Best of luck to them.
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Duc Ong

Real Estate Agent · Honolulu, HI · Member since 2015 · 450 posts · 196 votes

1y

This is a really exciting project, @Dustin Randy. Smaller-scale RAL models fill such an important gap, and I’ve seen demand only increase in markets I work in (I’m a broker/investor out in Honolulu).

On the financing side, a few quick thoughts:

Bridge + SBA is usually the cleanest way to go for ground-up, since SBA won’t fund pre-entitlement. Private or local banks sometimes step in on the land takedown if you’ve got strong W-2s and some equity in.
JV with a landowner often looks like crediting the land in as equity; say $1.1M land into a $6–7M deal = ~15–20% ownership.
Building two homes makes sense for economies of scale, but I’d still model a one-home-at-a-time approach in case equity raising or lender appetite changes.

The fact that you’ve got alternate exit strategies (like subdividing) will help a lot with both investors and lenders. From my side of the world, projects with clear backup options always get more traction.

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Ground up construction for residential assisted living.

Ground up construction for residential assisted living.

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