Selling an Assisted Living Facility in Florida is not the same as selling a traditional house or a typical small business.
An ALF transaction may involve the real estate, the operating business, furniture and equipment, employees, residents, contracts, insurance, financing, licensing questions and the transition to a new owner.
The seller should understand exactly what is being sold before putting the facility on the market.
1. Decide What You Are Selling
Start by identifying whether the transaction includes the operating ALF business, the real estate, or both.
If the property is leased, review the lease term, renewal options, assignment provisions and landlord approval requirements. If the real estate is included, the property value and the business value should be considered separately.
2. Understand the Value of the Real Estate and the Business
Do not simply choose one number and call it the value of the ALF. A buyer will usually evaluate the real estate and the operating business differently.
Consider property value, revenue, operating expenses, occupancy, licensed bed count, staffing, lease terms when applicable, furniture and equipment, condition of the property and other assets included in the transaction.
3. Organize the Financial Information
Serious buyers will want to understand how the operation performs.
Depending on the transaction, sellers should be prepared to organize information such as gross revenue, operating expenses, payroll, rent or mortgage expense, insurance, utilities, food and supplies, occupancy and resident rates.
Accurate and organized information can help buyers evaluate the opportunity more efficiently.
4. Verify the License and Bed Count
Make sure the facility’s current licensing information and represented bed count are accurate.
Do not rely only on old marketing material or assumptions based on the number of bedrooms in the property.
5. Review the Property Before Marketing
Buyers may investigate the roof, electrical system, plumbing, HVAC, fire and life-safety features, permits, additions, conversions, accessibility, bedrooms, bathrooms, common areas and overall property condition.
It is better for the seller to identify important issues before the buyer discovers them during due diligence.
6. Decide What Assets Are Included
Clearly identify what is part of the sale.
Possible assets may include furniture, beds, appliances, office equipment, business name, phone numbers, website, inventory, vehicles and other operating assets.
Clarity helps reduce disputes later in the transaction.
7. Protect Confidential Information
An ALF sale can involve sensitive business and resident information.
Marketing should be handled carefully, and detailed financial or operational information should generally be shared in an appropriate manner with serious prospective buyers and professional advisors.
8. Choose Representation That Understands ALF Transactions
An ALF sale can involve both real estate and business considerations. A real estate professional familiar with Assisted Living Facility transactions can help coordinate the brokerage side of the deal and communicate with the other professionals involved.
Experience matters, but the seller should also understand the cost of representation.
Read: Before You Pay 6% Commission, Do the Math.
9. Prepare for Buyer Due Diligence
Expect the buyer to review the business, property, licensing information, financials, insurance needs, lease when applicable, permits, condition of the property and other transaction-specific matters.
Organizing the information in advance can help prevent unnecessary delays.
10. Evaluate Offers Beyond the Price
The highest offer is not always the strongest offer.
Consider financing, deposit, contingencies, inspection and due-diligence periods, closing timeline, assets included, seller obligations and the buyer’s ability to complete the transaction.
11. Plan the Transition
A successful closing may require coordination involving employees, vendors, utilities, insurance, property access, records, business accounts and other operational matters.
Legal, accounting, licensing and regulatory questions should be handled by the appropriate qualified professionals.
12. Know What You Are Paying to Sell
Before signing a listing agreement, calculate the commission in actual dollars, not just percentages.
On a $1,000,000 transaction, every 1% equals $10,000. That makes it important to understand exactly what services are being provided and what the total cost of representation will be.
Questions Sellers Should Answer Before Listing
- Am I selling the business, real estate or both?
- Is the property owned or leased?
- What is the current licensed bed count?
- What is the current occupancy?
- What are the revenues and operating expenses?
- What assets are included?
- Are there open permits or property issues?
- What employees or vendors may remain after closing?
- What price am I asking for the real estate?
- What value am I assigning to the operating business?
- What commission am I agreeing to pay?
- What will I actually net after the transaction?
The Bottom Line
Selling an Assisted Living Facility in Florida requires more preparation than simply placing a property on the market.
The seller should understand the real estate, business, financials, licensing information, assets, property condition, transaction structure and cost of representation before accepting an offer.
At ALF For Sale in Miami / Carmona Real Estate Group, we assist ALF owners with the real estate brokerage side of these transactions and help organize the transaction so buyers can better understand what is being offered.
For insurance needs, Florida FairPrice Insurance can separately assist with available ALF insurance options.
For legal, accounting, tax, licensing and regulatory matters, sellers should work with the appropriate qualified professionals.
Thinking About Selling Your ALF?
Tell us the location, licensed bed count, whether the real estate is included, whether the property is owned or leased and the price you are considering.
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