Avatar's Blog
» Why Are Assisted Living Facilities So Hard to Fund
Posted on 11/2/2004
Very few lenders - including hard money lenders, are willing to fund assisted living facilities. The reason has to do with the value of the property vs. the value of the business.
The value of an assistend living facility is almost always extremely high compared to the actual value of the property if it were not being used as an assisted living facility. The value is strongly linked to the licenses and zoning issues that permit the property to function as an assisted living facility. In the event that any permits are lost or zoning ordinances change, the value of the property would plummet. Hence, the hesitation on the part of lenders who understand that fickle nature of local government, as well as the myriad regulatory requirements that such facilities can run afoul of, even without being seriously remiss in the care they provide.
Posted in Miscellaneous
The value of an assistend living facility is almost always extremely high compared to the actual value of the property if it were not being used as an assisted living facility. The value is strongly linked to the licenses and zoning issues that permit the property to function as an assisted living facility. In the event that any permits are lost or zoning ordinances change, the value of the property would plummet. Hence, the hesitation on the part of lenders who understand that fickle nature of local government, as well as the myriad regulatory requirements that such facilities can run afoul of, even without being seriously remiss in the care they provide.
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