All Forum Posts by: Zach Rynders

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@Dan V. My wife and I own a local Architecture firm and have been doing a lot of work on these conversions. Like Mitch said, it is different for every city and state. I can't speak to the values and appraisals but I can talk about some of the rents in Minnesota. We typically see 5 bedroom split level properties being converted. The reason for this is that split level will usually be at a discount to a regular SFH. 5 tenants are the maximum allowed in a facility in Minnesota without being considered commercial. Once it is commercial it is considered a higher risk and things like sprinkler systems and ramps need to be considered.

Rents depend on what whether the tenants are going to be private pay (out-of-pocket) or are going to be subsidized by the state. Depending on the city where the property is we are typically seeing that just the room is renting for $900-$1,000/month. This does not include any food, any of the ADL care or running errands for the patients. Those numbers we see be an additional $3-5k/month. The big caveat with these numbers is that our operators all only take patients that are self-sufficient and do not need 24/7 care or memory care as there are a lot less regulations.

We have an owner who owns many assisted living facilities but has some single family homes that he rents out to operators who then utilize them for assisted living facilities. He said that he charges $1,000/month/resident ($5,000 total) for rent to the operator as the assisted living facility will most likely gross somewhere around $30,000/month before expenses. The one thing to consider is as the owner you would need to significantly add to your homeowner's policy and probably need a commercial policy.

Like I said, the process is probably very different in Virginia from Minnesota but if you have any other questions about numbers or the process of conversion feel free to reach out.

Best,

Zach