Assisted Living: 10 Common Misconceptions Debunked

assisted living business startup care home estate investing funding grants licensing profitability real sba loans Apr 10, 2025

There’s a lot of misinformation out there about assisted living. Whether you're an investor, entrepreneur, or healthcare professional looking to start a facility, you’ve probably heard some myths that could make you second-guess your decision.

Let’s break down the 10 most common misconceptions and what the truth really is.

Check out this video, too:

1️⃣ You Need to Be a Nurse or Healthcare Professional

✅ Reality: You don’t need a medical background to own an assisted living facility. Your job is to own and operate the business, while your administrator and caregivers handle day-to-day resident care. Many successful ALF owners come from real estate or business backgrounds.

2️⃣ You Must Have Millions to Get Started

✅ Reality: Many owners start their facilities using SBA loans, grants, partnerships, and creative financing. I personally secured $1.5M in SBA funding and $1.2M in grants to scale my assisted living business.

3️⃣ Small Facilities Can’t Be Profitable

✅ Reality: Profitability depends on your numbers, not your facility size. While larger facilities often have better margins, small homes can still cash flow if you set your pricing right.

📌 Pro Tip: In high-demand areas, small facilities with premium services can charge higher rates and operate at a great profit.

4️⃣ You Have to Be Involved in Day-to-Day Operations

✅ Reality: You can set up your business to be hands-off. The key is hiring the right administrator to manage daily operations. Many owners spend only a few hours per month overseeing financials and strategy.

5️⃣ Banks Won’t Fund First-Time Owners

✅ Reality: If you have a strong business plan, lenders will take you seriously—even if this is your first facility. The key is showing them a well-structured, profitable model.

💡 Need help with your plan? I offer an Underwriting Calculator to help you build solid financial projections.

6️⃣ Licensing is Too Complicated

✅ Reality: Every state has its own licensing requirements, but it’s a step-by-step process—not an impossible hurdle. If you follow the right steps, you can get licensed without headaches.

7️⃣ You Can’t Compete with Large Corporate Facilities

✅ Reality: Smaller, home-like facilities are actually in high demand! Many families prefer them over large, institutional settings. Personalized care and a cozy atmosphere are major selling points.

8️⃣ It Takes Years to Become Profitable

✅ Reality: Many facilities cash flow within months of opening. It all comes down to underwriting your numbers correctly from the start.

📌 Pro Tip: Know your break-even point and price your services accordingly.

9️⃣ You Must Own the Property

✅ Reality: You don’t have to buy a property—you can rent and convert a home into an assisted living facility. Leasing allows you to start with lower upfront costs and test the market before committing to ownership.

💡 Alternative: Some investors even do lease-to-own agreements to minimize risk.

🔟 It’s a Business You Have to Stay in Forever

✅ Reality: Some investors build and sell facilities for a big payday, while others hold for long-term cash flow. You can structure your exit strategy however you want.

Final Thoughts

The assisted living industry is full of opportunities but also a lot of misinformation. Now that you know the truth, you can move forward with confidence.

Next Steps

📥 Download my Business Plan Checklist to make sure you’re set up for success.
🔥 Apply to my Assisted Living Investing Mastermind to get expert guidance on launching your facility.

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