Buy Or Rent Your First Group Home?

8 Aug 2013 by ">Admin

Do I Need To Own The Property to Start My First Group Home?

This is another very common question, and honestly a matter that keeps most people out of business and therefore out of money and without the ability to help people! Folks, what are you doing! You need to get creative. This is America! If you don’t have money, use your mind! Find others with the money you need or get creative and figure out how to do it without any of your funds….let’s dive into this in more detail.


First of all, you need to understand that some of the largest companies in the world don’t own the buildings where they operate. Take Walgreens and CVS. These are two of the United States’ largest companies, yet most of the property they operate out of is leased! Why bother weighing down your balance sheet with unnecessary debt and tie up cash in down payments when you can get a better return simply by opening up a new facility or location?

Think about it this way. If it costs $20,000 to purchase and outfit a simple home (care-home) or a small commercial building for a nursing home or assisted living center versus simply leasing it for a total cost (including improvements) of $5,000, then why would you do it? Well, many of you are under the impression that real estate is the only way to go….I am here to tell you; it is not! Look, the real money is made in the businesses that USE the real estate.

These businesses then purchase the real estate as a place to store their wealth. Over time it most likely will go up in value. But in the interim, rather than spending $20,000 on one location and cash flowing $2,500 per month after all expenses the smart owner/operator of a group home, care home or assisted living center will simply lease 4 of this location and generate themselves a hefty profit of $10,000 per month after expenses!

Well, yes. I can hear your questions: What about the mortgage interest write off? What about the depreciation? What about me missing out on additional tax breaks? OK, these are all valid questions that should be addressed with a pen and paper (or if you can’t do it on your own, then with your accountant) however, by and large it is going to take you a minimum of 6 months to negotiate, finance and finish out a building that you wind up buying versus probably 1-2 months when you lease! How much is your time worth?

You need to take all of this into consideration when evaluating your lease or buy decision. That all being said, the important point to remember is that you can get into a lease of your first care home literally in 1-3 weeks and have it ready to be occupied by week four if you hustle. This leads me to believe that the smartest, fastest and most intelligent decision to make if you don’t have a lot of capital available is to sign a lease!

In the next article, we will discuss ways that you can take advantage of the upside appreciation of your group home, boarding home, rooming house, assisted living care home or transitional housing home by doing what is referred to as a lease-option – or an LEASE-To-OWN!

If you are looking for additional information on how to start a group home, halfway home, transitional living home, sober home, foster home, ICF/MR home, DADS Home or other type of care home for people with disabilities; check out our free course on starting your very own income-generating group home by entering your email below.

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