Residential Care For the Elderly

[jeff_socal]

Hello everyone my name is Jeff. I'm working out a deal to purchase a business with the owner of a small assisted living facility (residential 6Beds) Part of the deal would be to lease the facility with an option to buy. Once we sign the agreement my plan is to buy the real estate within a year or two (investment property) when seeking a loan does this fall under a commercial loan. Which SBA backed loan program is available to purchase this type of facility. I will be working as the administrator for the facility.

I can't seem to decide whether to quit my full time regular job because I'm afraid It will be hard to get approve for the future loan to purchase the property because of inconsistent job history. I'm willing to quit my job of 2.5 years because my passion is to help and make a difference in the life of other people particularly the elderly which is lacking in my current job. Any advice is much appreciated. Thank you.

BTW. The facility will be full capacity.

[vangogh]

A couple of thoughts. First don't count on a loan. I'm not saying you won't be able to get one, but I wouldn't plan on getting one. Plan on how you'll do this without a loan. I think it's dangerous to have your plans hinge on something that will be out of your control.

Second I think it would be difficult to run an assisted living facility while working another job. Some businesses you can start up part time. This doesn't sound like one of them. I wouldn't worry about your job history where a loan is concerned. A bank lends you money because they believe you'll be able to pay the loan back with whatever interest they're going to charge. They want to make sure you have assets worth the amount they're lending you so they can take those assets and recover what they can if you default. A bank will be more concerned with the financial history of the business you want to buy and evidence you can continue to run the business and maintain its profitability.

[MyITGuy]

Does this facility have staff in place that will be able to monitor/assist the residents, or will this be a part of your job duties?
Do you have any plans to grow this facility and does the current property allow for this?

[jeff_socal]

Vangogh- I will eventually want to own the facility and the possibility of happening as far as im concern would be to get a loan from a lender.
I want to keep a part time job so i can continue providing for my family and at the same time grow the profit of the business for future growth.

[jeff_socal]

MyITGuy- the facility have experienced staff that will care and supervise the residents. I will actually be the administrator but in my absence my wife who is a health care provider will be in the facility. She also works part time at a hospital so the duties of supervision and the running of the facility will be shared between the two of us.
The owner have 2 facilities she wants to sell and my goal is to acquire both of them in the next few years.

[MyITGuy]

MyITGuy- the facility have experienced staff that will care and supervise the residents. I will actually be the administrator but in my absence my wife who is a health care provider will be in the facility. She also works part time at a hospital so the duties of supervision and the running of the facility will be shared between the two of us.
The owner have 2 facilities she wants to sell and my goal is to acquire both of them in the next few years.

Based on that comment, and assuming the staff has the appropriate licenses/courses, I wouldn't see a need for you to quit your current job if you feel that is an issue. I would think that most of the tasks you would need to do could be performed within a few hours a week.

As far as advice - I would recommend sticking with a lease of the current property until you can find a suitable property to purchase and consolidate both locations into (I would think that 6 beds for the one location is at, if not below the break even point). This will give you time to save up some additional funds (Income from business and your job) while giving you multiple opportunities to reduce your operating costs (I.E. Insurance costs, reduced staff, utilities, meals, transportation, activities and etc...)

[jeff_socal]

Mr. Tysco, thank you for your advice. You're a big help!