How Long Will It Take To Sell My Residential Assisted Living Home?
This is a great question, and one we hear often. Our answer always is - IT DEPENDS.
One thing we tell our clients right away is that this process can take time. You have built up a business and legacy at your assisted living home, and more often than not the process of transferring ownership to a new owner is more than signing a couple pieces of paper and closing in 30 days.
Here are some important factors that will affect your closing date:
1. How prepared YOU are. Do you have your tax returns, profit and losses and rent rolls ready to go? Buyers looking to make a serious investment in assisted living and pay for what you have built up are going to ask to see financials that prove profitability, and any financial instute will require these documents before approving the loan.
2. The listing price. This is by far the most important factor. The truth of the matter is that your care home is worth exactly what someone is willing to pay for it. Emmanuel and I have seen hundreds of care homes here in Arizona and we are well aware of the competition each city has. We've heard many people state 10 beds go for X, 5 beds go for Y. We highly disagree with this "method". Your home is licensed for 10, but does it have 5 bedrooms or 10 bedrooms? There is a vast difference between areas, and price points in this industry. Emmanuel and I get very specific when presenting you, as a seller, with the price we believe your home and business can be sold for. By having your home listed at an appropriate price, we ensure this will expedite the process of finding a serious buyer.
3. How the buyer plans on financing the purchase. Ideally as the seller, you would love someone to come in with a briefcase full of cash to buy your business with no questions asked. In reality, most buyers are going to be financing the real estate and the business. If they are doing an SBA loan, the average time range we've experience is between 3-6 months to close. If they are using hard money, the process can be faster although many buyers will avoid this if they can due to the higher interest rates a hard money loan entails. If you would like to close faster there are methods for doing so involving flexibility as the seller to carry back some or all of the business, which we can explain in great detail when meeting with you.
4. The condition and feel of the home. While assisted living sales are very different from a regular residential home, presentation matters for both. We had listed homes in the past that appeared unwelcoming to buyers and they ended up sitting on the market even if their financials were solid. Little things go a long way when presenting an assisted living: having the lights on, caregivers who are welcoming and offer guests water, air freshener throughout and tidiness in all common areas. A buyer should be able to walk through your assisted living and get excited to put their name on it as the owner.
These are just a few of the factors we bring to our clients attention. It is crucial to put your best foot forward when looking to sell your care home. Be as prepared as you can, and try to be patient throughout the process. It may take a few buyers coming through before you find a good match to carry on the legacy you've created.