Identifying markets to build Adult Family Homes

[Jessica Hicks]

Hello, I’m a new investor and have been searching for an investing strategy that is fairly recession proof. One of my friends invests in Adult Family Homes. I like the idea of this niche seeing as how baby boomers will soon be reaching nursing home age. She purchases single story homes, adds additional units (acting as her own contractor), then rents them to Adult Family Directors. She has offered to mentor me, which I’ve learned is GOLD in this field!

I live in the PNW where these units are popping up everywhere. Does anyone have experience with conducting market analysis for this Niche? My budget won’t afford me the ability to purchase close to Seattle so I will have to move a little outside.

[Rich Lathrop]

We bought a large home on acerage in a nice neighborhood in Spokane and converted it into an adult family home and are about 3 months into a 5 year lease with an experienced operator. We have a nice 5 year NNN lease at rates higher than we could have gotten for a traditional rental property. That said, there are bound to be more expenses as well with 6 residents and staff. The changes we made to accomodate folks in need of assistance such as widening door ways and adding grab bars, likely will make it more difficult to sell this home in the future as a normal house.

Next time I think I would build a home to suit this specific need rather than convert an existing building.