Most care home operators sell their facilities after 5-7 years, although many others make this their lifetime endeavor. How do they sell their facilities?

Some operators negotiate directly with another operator to avoid paying commissions to a broker. That is okay as long as both parties are experienced and knowledgeable in real estate transactions or have access to a real estate attorney for advice.

Another variation of this scenario is when an employee purchases the facility directly from the Seller. Again, effective only if both parties are real estate savvy.

The more common way of course, is working with a real estate professional who is experienced and knowledgeable in the sale of care facilities. The commission paid is money well spent since your real estate specialist will handle not only the sales, marketing, financing and licensing process of the transaction but will also protect all parties from future problems by ensuring all disclosure requirements, due diligence, inspections and contracts are properly prepared and executed.

How long does it take to sell a facility? It takes any where from 3 months or longer, depending on how quickly we can find a buyer, and once escrow is open, how aggressively the buyer can attack both the financing and licensing application processes and how long it is taking for the licensing authority to process applications.

Lastly, most sellers who have been in business for a long time may have seen some appreciation in their property values. It will be wise to consult with their CPA to see how they can minimize capital gains taxes or else opt to defer tax payment through a 1031 tax deferred exchange.

Why do operators sell their facilities? For different reasons. Past clients have sold for one or more of the following:

1. To retire after long years in the business.
2. Unfortunate personal circumstances – divorce, bankruptcy, major illness or an untimely death in the family, especially a spouse.
3. To be able to spend more time with family or with a spouse who recently retired from full time employment.
4. To take advantage of appreciating real estate values and equity.
5. To upgrade to a bigger facility or a better location.
6. To relocate out of the area or out of state.
7. To raise capital for another business, college tuition, major medical expenses or other major expense.
8. To dissolve an unsuccessful business partnership.

WHY A REAL ESTATE SPECIALIST?

Ownership transfers of care facilities are a complex process, involving the sale not just of the real estate but of the existing business as well. Working with a real estate professional who is familiar with the many aspects of such a transaction will ensure a timely and successful close of escrow. Sellers can expect their facility to be competitively priced, based on both the facility’s real estate and business values. (Valuation is the toughest part of the sales process! It is difficult because there are many different ways to arrive at value.) A facility will be marketed in utmost confidentiality but effectively to the right buyer/investor pool, usually from a pre- qualified database of buyers or other existing operators looking for expansion opportunities. Like every real estate transaction, your broker will ensure that all real estate regulations and disclosure requirements are met to avoid problems during and especially after escrow. Lastly, an experienced real estate broker can help you purchase another piece of property (single family, apartment, retail, land, etc.) should you need to do so in order to defer payment of capital gains taxes. Your broker should be able to refer you to other specialists who could assist in your decision making process – attorneys, accountants, etc.

Please call us if you are ready to work with a real estate specialist whose main focus is the sale of health care facilities.

If you are interested to be on our mailing list for future listings, are looking for specific property to buy, or might consider selling soon, please click here to download our CLIENT QUESTIONNAIRE, print and complete, then email or fax back to us.

If you are interested in listing, please click here to download the PRE-LISTING EVALUATION FORM, print and complete, then fax back to us or return via email as a scanned document. You could also download PDF version from here.

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