Residential Assisted Living- What is up with this?

Atlanta, Georgia
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Residential Assisted Living- What is up with this?

Lexi Blevins
Member since 2023 · 9 posts · 8 votes

Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one! 

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Lovenia Chead
Member since 2023 · 7 posts · 11 votes
2y

it's great to hear about your property renovation! I suggest starting with an unlicensed group home. It's a simpler entry point and aligns well with serving protected classes like veterans, seniors, and single mothers—key to ensuring stability against HOA or city issues.

Begin connecting with non-profits and agencies that help these groups find housing. They're often on the lookout for properties like yours and have the funds but lack real estate connections. This relationship guarantees income, as payments come directly from these organizations, not the individuals.

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  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y
    Quote from @Lexi Blevins:

    Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one! 


     My partner & I are familiar with this strategy.  I'll reach out via DM.

    312-681-7487
    1Reply
  • Lexi Blevins
    OP
    Member since 2023 · 9 posts · 8 votes
    2y
    Quote from @Crystal Smith:
    Quote from @Lexi Blevins:

    Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one! 


     My partner & I are familiar with this strategy.  I'll reach out via DM.


     Thank you!!!!

    0Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    2y
    Quote from @Crystal Smith:
    Quote from @Lexi Blevins:

    Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one! 


     My partner & I are familiar with this strategy.  I'll reach out via DM.


     I’m ears too!!:)

    2Reply
  • Michael Dumler
    Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    @Lexi Blevins, if you haven't already, explore the investment strategy of rent-by-the-room. Depending on the property's location, it could perform very well as a co-living asset (3x of a traditional rental). Companies such as HomeRoom and PadSplit will help you get started and source tenants. If you are interested, I'd be happy to make intros. 

    Unfortunately, I'm not well-versed in assisted living but I understand the strategy can be lucrative. 

    I hope this provides some guidance and clarity! 

    5Reply
  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    2y

    Hey @Lexi Blevins! You're going to want to start by checking with local zoning and planning to determine is the home can become residential assisted living. Sometimes it has to be zoned properly or it might need to be a specific distance from an already licensed home.

    Then you need to determine the licensing requirements and see if you can meet those. Often times there are bedroom size requirements, residential sprinkler system requirements, among others.

    You'll want to then check the state regulation agency and review their requirements and licensing process. 

    If you plan to operate the entire business, that will be work. But if there are enough bedrooms or you get multiple homes, you will be able to support hiring a local manager to manage daily operations. 

    You can also do what I do and lease the home TO an operator. Make the home licensable and tailored to residential assisted living, and then lease it at a higher than market rate to an operator who will run their own business out of your home. Finding the right operator is the key here but once you do it's passive for 3-5 years as a commercially leased home. They even handle most maintenance and all utilities. Pretty sweet arrangement! 

    The RAL Room Assisted Living Mastermind
    WebsiteView Page
    7Reply
  • Ian Martin
    Developer · Boston, MA · Member since 2016 · 76 posts · 31 votes
    2y
    Quote from @Charlie Cameron:

    Hey @Lexi Blevins! You're going to want to start by checking with local zoning and planning to determine is the home can become residential assisted living. Sometimes it has to be zoned properly or it might need to be a specific distance from an already licensed home.

    Then you need to determine the licensing requirements and see if you can meet those. Often times there are bedroom size requirements, residential sprinkler system requirements, among others.

    You'll want to then check the state regulation agency and review their requirements and licensing process. 

    If you plan to operate the entire business, that will be work. But if there are enough bedrooms or you get multiple homes, you will be able to support hiring a local manager to manage daily operations. 

    You can also do what I do and lease the home TO an operator. Make the home licensable and tailored to residential assisted living, and then lease it at a higher than market rate to an operator who will run their own business out of your home. Finding the right operator is the key here but once you do it's passive for 3-5 years as a commercially leased home. They even handle most maintenance and all utilities. Pretty sweet arrangement! 

    Hey Charlie, where are your assisted living facilities and how much over market rate rent are you able to get for them vs renting them as long term rentals? 

    0Reply
  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    2y

    @Ian Martin It's going to depend heavily on what the home can be licensed for, the finish of the home, and how many residents it can be licensed for. But it ends up being around 3X the long term rent. 
    Having been heavily in short term rentals for a while, I've found this to be about as much work up front, but we don't have to furnish, we don't have the management nightmares that STRs bring, we make as much or more cash flow, and we handle less maintenance than a traditional SFR. We're signing 3-5 year escalating commercial leases, which is awesome.

    Generally, what we've been estimating is that if this is a pretty nice residential assisted living home, that we will get $800-1100 PER resident. 

    The hard parts are ensuring you can have a home that can be licensed for as many residents as possible (comfortably) and finding a well qualified operator to lease it to. Licensing requirements vary heavily by locality and usually the home will need to have a sprinkler system, bedroom size requirements, there may need to be min distance to any other licensed homes, etc.

    The RAL Room Assisted Living Mastermind
    WebsiteView Page
    2Reply
  • Lovenia Chead
    Member since 2023 · 7 posts · 11 votes
    2y

    it's great to hear about your property renovation! I suggest starting with an unlicensed group home. It's a simpler entry point and aligns well with serving protected classes like veterans, seniors, and single mothers—key to ensuring stability against HOA or city issues.

    Begin connecting with non-profits and agencies that help these groups find housing. They're often on the lookout for properties like yours and have the funds but lack real estate connections. This relationship guarantees income, as payments come directly from these organizations, not the individuals.

    9Reply
    • Kevin Dehesa
      Investor · BAY AREA · Member since 2017 · 81 posts · 21 votes
      1y
      Quote from @Lovenia Chead:

      it's great to hear about your property renovation! I suggest starting with an unlicensed group home. It's a simpler entry point and aligns well with serving protected classes like veterans, seniors, and single mothers—key to ensuring stability against HOA or city issues.

      Begin connecting with non-profits and agencies that help these groups find housing. They're often on the lookout for properties like yours and have the funds but lack real estate connections. This relationship guarantees income, as payments come directly from these organizations, not the individuals.


       Unlicensed group home,  would I need an Admin cert?

      0Reply
  • Douglas Olson
    Real Estate Broker · Member since 2024 · 1 post · 1 vote
    2y

    I'm fascinated by this RAL concept and wonder if any of you are serious about moving forward or maybe are in process? So many steps but potentially very lucrative.

    1Reply
    • Isabelle Guarino
      Real Estate Consultant · Gilbert, AZ · Member since 2022 · 12 posts · 4 votes
      1y
      Quote from @Douglas Olson:

      I'm fascinated by this RAL concept and wonder if any of you are serious about moving forward or maybe are in process? So many steps but potentially very lucrative.


       Did you move forward? You're right to be hesitant and do education first before getting started. Let me know if you want any info, I own and operate 3 care homes and have taught 1000's how to do the same too!

      0Reply
    • Kevin Dehesa
      Investor · BAY AREA · Member since 2017 · 81 posts · 21 votes
      1y
      Quote from @Isabelle Guarino:
      Quote from @Douglas Olson:

      I'm fascinated by this RAL concept and wonder if any of you are serious about moving forward or maybe are in process? So many steps but potentially very lucrative.


       Did you move forward? You're right to be hesitant and do education first before getting started. Let me know if you want any info, I own and operate 3 care homes and have taught 1000's how to do the same too!


       Hi would love to connect with you!

      0Reply
  • Laura Chotkevys
    Member since 2024 · 7 posts · 11 votes
    2y

    I own and operate Platinum Resort Assisted Living in Georgetown, Texas. I am VERY familiar with this strategy

    4Reply
    • Kevin Dehesa
      Investor · BAY AREA · Member since 2017 · 81 posts · 21 votes
      1y
      Quote from @Laura Chotkevys:

      I own and operate Platinum Resort Assisted Living in Georgetown, Texas. I am VERY familiar with this strategy


       Hi, can we connect?

      0Reply
  • Rachel Davis
    Rental Property Investor · Brevard County, FL · Member since 2024 · 9 posts · 16 votes
    2y

    Whoever said that an assisted living facility is a passive real estate investment is lying. It's a full-blown business with staff. 

    The medical industry is fueled by referrals, so you'll need to get out there and build relationships that will keep your facility full. 

    It's also about filling the gap in your area for insurance. For example, in your area are there no assisted livings that will accept Medicaid, Blue Cross Blue Shield, etc.? These days insurance companies have the reputation for paying you for the service and then trying to claw back the money later. 

    Can you make money? Absolutely! Is it passive? No.

    2Reply
  • Twannisha Jackson
    Rental Property Investor · Cleves · Member since 2023 · 132 posts · 82 votes
    2y
    Quote from @Lexi Blevins:

    Hey y’all currently in the process of renovating a 5B 3B house for rent. My original plan was just to flip this like everything else. I recently heard about residential assisted living facilities. Has anyone actually started one of these? Are they as passive as I have heard about? Would love to pick your brain if you have actually done one! 


     i’m looking into this as well. I have a property with a concrete wheelchair ramp. figured someone would love this. 

    0Reply
  • Rodolfo LoureiroPro Member
    Member since 2021 · 4 posts · 3 votes
    2y

    I have also been looking into this strategy in Florida and would love to connect with anyone who has experience with this.

    1Reply
  • D. Dee
    Member since 2024 · 9 posts · 1 vote
    2y

    @Lovenia Chead are you currently doing this? I would love to hear more of your experience.

    0Reply
  • D. Dee
    Member since 2024 · 9 posts · 1 vote
    2y

    @Laura Chotkevys how much capital would you recommend for starting this type of business?

    0Reply
  • Alex Lee
    Realtor · New York City · Member since 2021 · 35 posts · 16 votes
    2y

    This is something I've been mulling over and I admit that I'm kind of curious to know how it all works (regulations, certifications, process) 

    0Reply
  • Laura Chotkevys
    Member since 2024 · 7 posts · 11 votes
    1y
    Quote from @D. Dee:

    @Laura Chotkevys how much capital would you recommend for starting this type of business?


     We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k.  On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.  

    1Reply
    • Kaila Epps
      New to Real Estate · IN · Member since 2021 · 8 posts · 7 votes
      1y
      Quote from @Laura Chotkevys:
      Quote from @D. Dee:

      @Laura Chotkevys how much capital would you recommend for starting this type of business?


       We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k.  On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.  

       @Laura Chotkevys - do you have tips for how you got your first deal with $0 of your own money down? That is exactly where I am currently. I've been scoping areas in my city/surrounding cities and began the process with a franchise - but the upfront $50k and other cost are what are holding me back. SBA 7A from some lenders want to see that YOU owned and operated a home previously (which I have not) so I'm trying to figure out an option to get investments from others for both the business and property.

      0Reply
    • Kevin Dehesa
      Investor · BAY AREA · Member since 2017 · 81 posts · 21 votes
      1y
      Quote from @Kaila Epps:
      Quote from @Laura Chotkevys:
      Quote from @D. Dee:

      @Laura Chotkevys how much capital would you recommend for starting this type of business?


       We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k.  On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.  

       @Laura Chotkevys - do you have tips for how you got your first deal with $0 of your own money down? That is exactly where I am currently. I've been scoping areas in my city/surrounding cities and began the process with a franchise - but the upfront $50k and other cost are what are holding me back. SBA 7A from some lenders want to see that YOU owned and operated a home previously (which I have not) so I'm trying to figure out an option to get investments from others for both the business and property.


       have you looked into crowdfunding?  Would you be able to pass me those franchises contact information?

      0Reply
  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    1y
    Quote from @Laura Chotkevys:
    Quote from @D. Dee:

    @Laura Chotkevys how much capital would you recommend for starting this type of business?


     We partner with individuals who want to start their own Assisted Living Mansion. The upfront capital needed is around 50k.  On our first deal we used $0 of our own money. We raised money for the gap funds on our deal.  

     Laura and Brett are the real deal! Looking forward to my podcast interview with Brett next week! Like @Laura Chotkevys said, you can raise money, creatively finance from the seller, partner, get lower money down loans (SBA - although this is harder for the first deal sometimes), get a private note... lots of ways to go about this with low money down if you put in the work and know how much you need. 

    The RAL Room Assisted Living Mastermind
    WebsiteView Page
    0Reply
  • Nichole KinardPro Member
    Member since 2024 · 13 posts · 9 votes
    1y

    @Charlie Cameron What's your podcast?

    1Reply
  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    1y
    Quote from @Nichole Kinard:

    @Charlie Cameron What's your podcast?

     Hey Nicole! It is launching in about a week. The RAL Room assisted living Podcast. 

    The RAL Room Assisted Living Mastermind
    WebsiteView Page
    3Reply
  • Joena Mureithi
    Boston, MA · Member since 2026 · 13 posts · 4 votes
    2d

    I agree, it’s definitely not as passive as the “passive income” framing makes it sound. One thing I’d add is that even a small home has medication-management requirements. In California, unlicensed staff can assist with self-administered medications, but they need specific training, including 10 hours for homes with 15 or fewer residents, so that’s something to plan for from the start. This is one of those state-specific details that’s easy to overlook.

    0Reply
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