Assisted Living Investing: How to Get Started the Right Way

Welcome back to Assisted Living Investing with me, Bret Chotkevys, where I guide you on how to achieve financial freedom through the lucrative field of assisted living. I've personally achieved financial independence and built wealth through this niche, and my wife and I continue to grow our assisted living businesses.

In today’s post, I want to share how you can successfully navigate this journey because there’s a lot of misinformation in the assisted living space. Many people believe they can simply take any house and turn it into an assisted living facility, but it’s not that simple. Let’s walk through the critical steps and potential deal-breakers when starting your first assisted living business.

The First Steps to Opening Your Assisted Living Facility

We are currently discussing the essential first steps for opening your first assisted living home, focusing on identifying potential deal killers that could block your success. The first major step is talking to your city’s planning and zoning department. This is crucial to ensure the property you're interested in is zoned for assisted living.

Avoid Costly Mistakes in Property Selection

One of the biggest mistakes new investors make is purchasing the wrong property without understanding local zoning requirements. At this stage, you should have already met with the city’s planning department to confirm that the zoning aligns with your business plans. If you haven’t done this, you risk wasting money on properties that cannot legally operate as assisted living facilities.

Once you’ve cleared zoning, the next step is to meet with the building department. Planning and zoning is one side of the equation; the building department is the other. These two departments operate independently, so it’s critical to go through your due diligence with both.

Key Questions to Ask During Due Diligence

When meeting with the building department, here are the questions you should ask:
What Permits Do I Need? Depending on whether you're doing a new build, a remodel, or an expansion, you'll need various permits—ranging from demolition to electrical and plumbing. Knowing this upfront will help you avoid surprises.

How Will You Classify My Building? It’s essential to clarify whether your property will be classified as residential, commercial, or institutional. This classification will determine the types of permits and building requirements needed. Misclassification can lead to costly setbacks.

What Are the Code Requirements? Make sure to ask which building codes your city follows (e.g., 2022 or 2018 IBC, Texas Building Code). This is crucial for both your architect and contractor, ensuring they design according to the current standards.
Do I Need Full Architectural Plans? If you’re remodeling an existing home, ask if you need full architectural and engineering plans, especially if you're changing the layout or adding features like new bathrooms or larger bedrooms.

Utilities and Infrastructure Considerations

Another key aspect of due diligence is understanding the utility requirements for your property:
Water and Sewer Lines: Can your property connect to the city’s water and sewer system? If not, you may need to consider installing a septic system, which requires significant land.

Electrical Capacity: Does the property have sufficient electrical infrastructure? For example, if you’re operating a large facility with multiple HVAC systems, you may need to upgrade the transformers.
Don’t Forget the Fire Marshal

One of the most critical—but often overlooked—steps is speaking with the fire marshal. The fire marshal can impose requirements that could be potential deal killers. They might require upgrades like fire suppression systems or specific building alterations, which can be costly or even impossible based on the existing structure.
In the next blog post, we’ll dive deeper into how to prepare for your meeting with the fire marshal and what specific questions to ask to ensure your property is up to code.

Free Training and Resources

If you’re looking for more in-depth guidance, I offer a free Foundations Training Course that covers 15 lessons on city planning, fire marshal requirements, building permits, zoning, raising capital, and much more. If you're serious about building a profitable assisted living business, click the link below for access to the free training.