Realtor · Phoenix, AZ · Member since 2026 · 8 posts · 5 votes
I came across a property that would be perfect for a group home, community residence, assisted care, ect. or similar type of property but don't want to actually run it. Another option is to master lease it to a group home operator but I don't know what that process looks like or how reasonable that is. Anyone have any experience or advice? Any advice on how to underwrite for this?
Find another investor that is self managing their own group homes in the area and if they can arbitrage the master lease with their subleases a lot will take that deal.
I can share how this looks from my side of the table. I'm in San Antonio and I'm building in the supportive housing space, so I talk to group home operators regularly.
The master lease structure is real and operators do sign them, but here's what I've learned they care about. They need a long enough term to justify licensing and setup costs, usually they're thinking years not months. They need control of the day to day inside the home. And the house has to fit their model, bedrooms, bathrooms, accessibility, neighborhood rules.
On underwriting, I'd work backwards from the operator's revenue. Their income is per resident, so the rent you can charge has to leave them a healthy margin after their staffing and care costs or no operator will touch it. If the numbers only work with the operator squeezed, it doesn't work.
Still learning this side myself, but that's the shape of it from the operators I talk to.