How to Start an Assisted Living Business

Welcome back to Assisted Living Investing, where we guide you through the process of starting and growing a successful assisted living business. Today, we’ll discuss how to start your own assisted living facility, including crucial steps to help you achieve financial freedom, support your family, and set yourself up for a profitable exit strategy.

Step 1: Getting Started with Assisted Living
If you're asking, How do I open an assisted living facility or memory care mansion?, it all starts with careful planning. I break this process into four key frameworks, each with its own sub-steps. In today’s post, we’ll focus on the first and most critical step: choosing the right location.

Choosing the Best Location for Your Assisted Living Facility
Before raising money, hiring contractors, or obtaining licenses, you need to select the best location for your facility. This is the foundation of your business, and it's essential to get it right. Here are the two sides to consider:

Business Considerations:
What is the average bed rate in your target market?
What are the projected costs for staffing, land acquisition, and construction?
How competitive is the market, and what are your potential returns?

Regulatory Requirements:
What local regulations will you face from the city, county, or health department?
What will the fire marshal, zoning laws, and other regulatory bodies require?
Are there any deal-breaking issues like zoning restrictions or licensing roadblocks?
By understanding these factors, you can make informed decisions and avoid costly mistakes as you move forward with your assisted living investment.


There's gonna be so many things we'll unpack in this framework because this is where a lot of the roadblocks start. This is why it's so important that you learn this step because here's where the deal killers are.


This is where you can buy the wrong property, where you could spend hundreds of thousands or millions of dollars, and then get stuck, right? Where the city says, "Oh, no, by the way, you should have probably talked to us first because you can't do this in this location." Or,
"Yes, you can do this, but you can only have six or eight beds." And then you look at your numbers and you're like, "This doesn't pencil. Now I got a losing deal." Right? Right, there's so many potential deal killers that we can unpack over the next few weeks because I'm gonna break this into a series.


So Today, let's first talk about where you start. What is step number one? So we're gonna start with online research now. The best thing about this is if you are Considering doing this in your own backyard. It's right there, but you can also be looking at other places all over the country So we're gonna start with online on the computer. What can we figure out and learn about our market?

So it is gonna be all state dependent from your licensure standpoint

So we're gonna start there:
What is the state that I'm in? Require as far as licensure. So it's fantastic because the state wants to give you this information. It's online. If you simply just Google search the state name and assisted living regulations or end -of -life care or Department of Aging, something to that effect you will in five minutes find your department that will handle end -of -life. So it'll be nursing homes, assisted living, it may be adult daycares, and then click over to the assisted living section.

If that's what we're looking at, what does that say because they should give you several different things there. They are trying to provide this to you as a resident of the state. They want to give you the information that you need.

How to Research Licensure and Regulations for Assisted Living
When starting an assisted living facility, one of the first things you’ll need to do is locate key information online, including a list of licensed assisted living facilities in your state. These facilities are registered and have met the state's licensure requirements. It's important to find this list and understand the rules and regulations you’ll need to follow when opening your own facility.

Step 1: Find Licensure Requirements
Before you start comparing competitors or deciding on your market strategy, you need to understand the foundational rules. All of these regulations are available online, and it shouldn't take more than one research session to locate them. Once you've found the information, print out the documents. For me, this was a 50-page packet that I spent the next two weeks reviewing, highlighting key sections, and breaking it down.
I encourage you to do the same—take the time to familiarize yourself with the market and the licensure requirements. As the business owner or real estate developer, it’s important that you understand these regulations yourself rather than relying solely on consultants or third-party agencies. They may know most of the details, but there’s always the potential for something to be overlooked. Taking responsibility for this knowledge will ensure you’re fully informed and prepared.

Step 2: Key Areas to Focus On
There are three main categories you need to understand when reviewing the regulations:

Building Requirements
These regulations will outline specific building codes, including:
ADA compliance
Minimum bedroom sizes
Bathroom-to-resident ratios
Parking requirements
Understanding these requirements early on will help you plan your facility layout and ensure compliance from the start.

Staffing Requirements
You’ll also need to understand the staffing regulations, which may include:
Required training or certifications for caregivers and managers
Whether certain licenses or degrees are necessary
Specific training for Alzheimer’s or dementia care
Additionally, you’ll want to know the staff-to-resident ratios and required working hours, as these will impact your hiring and operational strategies.

Resident Care Requirements
Finally, it’s important to understand the rules around the types of residents your facility can admit. There may be regulations regarding:
The level of care required for residents
Whether residents need to be able to evacuate the building within a certain amount of time
Whether bedridden residents are allowed
Knowing these regulations will help you determine what level of care your facility will provide and what type of residents you can accept.

Step 3: Take Notes and Highlight Key Sections
​As you review these documents, take your time to highlight important sections and make notes. Familiarizing yourself with the rules now will make it easier to apply them later in the process. Understanding the key requirements for building, staffing, and resident care will set you up for success as you move forward in your assisted living journey.