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Kansas Assisted Living with 11 Rooms

CASH FLOW
$37,756

Specifications

  • Price
    $113,000

  • Cash Flow
    $37,756

  • Revenue
    $287,134

  • Intangible Assets
    Quality care, great reputation, positive resident history, deficiency free

  • Employees
    4FT (CMAs), 3 PRN (1 LPN, 2CNAs)

  • Profit Margin
    13%

  • Valuation
    $113,268

  • Location
    Independence, Kansas

  • Reason for Sale
    Career Change

 

This assisted living facility is comfortably located in a converted 8,000 sq. ft. home.  This is a major benefit for those looking to live in a more personal, home-like atmosphere without sacrificing the level of care and attention to detail.  The assets include the appliances in a full kitchen used for daily meals, and all rooms are fully-furnished.  There are currently 4 CMA’s and 3 PRN’s.  A new owner does not need to be a nurse to own and operate this business.  The staff is dedicated and reliable, with very low turnover and many employees have been employed 4-10 years.

 

This is located on several acres, so it would be a huge benefit to purchase the land as well (in a separate transaction) to build further accommodations.

 

This comfortable home has several resident rooms that include ADA restrooms, large closets, and individual heating and air.  It also has shared areas that include an informal dining room, a formal dining room, an activity room, fireplace, a front porch, a large covered deck with ramp, and a garden.   Facilities also include a kitchen, laundry area, pantry, and storage. 

 

The residents are mostly independent and do not require full time nursing assistance.  Transportation is offered to those residents who request such a service, but most residents are autonomous or seek out help from family.  All daily meals are provided on site in the shared dining room.  Extended care services are brought in as needed and can include OT, PT, therapists, home health, and hospice.  This is not a locked-door facility.  All residents are currently private pay.

Business Overview

This assisted living facility is comfortably located in a converted 8,000 sq. ft. home.  This is a major benefit for those looking to live in a more personal, home-like atmosphere without sacrificing the level of care and attention to detail.  The assets include the appliances in a full kitchen used for daily meals, and all rooms are fully-furnished.  There are currently 4 CMA’s and 3 PRN’s.  A new owner does not need to be a nurse to own and operate this business.  The staff is dedicated and reliable, with very low turnover and many employees have been employed 4-10 years.

 

This is located on several acres, so it would be a huge benefit to purchase the land as well (in a separate transaction) to build further accommodations.

 

This comfortable home has several resident rooms that include ADA restrooms, large closets, and individual heating and air.  It also has shared areas that include an informal dining room, a formal dining room, an activity room, fireplace, a front porch, a large covered deck with ramp, and a garden.   Facilities also include a kitchen, laundry area, pantry, and storage. 

 

The residents are mostly independent and do not require full time nursing assistance.  Transportation is offered to those residents who request such a service, but most residents are autonomous or seek out help from family.  All daily meals are provided on site in the shared dining room.  Extended care services are brought in as needed and can include OT, PT, therapists, home health, and hospice.  This is not a locked-door facility.  All residents are currently private pay.

Business Highlights

  • Year Established: 1996
  • Location: Independence, Kansas
  • Service Area: Local residents
  • Clients: Seniors who need light supports
  • Services: Residential retirement facility
  • Building: 8,104 sq. ft., *Building sale handled outside of business sale
  • Reason for Selling: Focus on family
  • Employees: 4 FT (CMAs), 3 PRN (1 LPN, 2CNAs)
  • Seller Training Period: 90-day training
  • Growth Opportunities: Add on to facility, accept different type of patients i.e.: greater level of care
  • Current Owner’s Responsibilities: Ensure regulations are met, financial management, addresses maintenance issues, currently is a nurse for the facility

Financial Highlights

  • List Price: $113,000
  • Gross Sales:
    • 2018: $287,134
    • 2017: $326,149
    • 2016: $291,171
    • 2015: $317,390
    • 2014: $295,106
  • Cash Flow:
    • 2018: $37,756
  • Assets Included in Purchase*
    • Equipment: Full kitchen, dining room and shared area furniture and fixtures
    • Intangible Assets: Quality care, great reputation, positive resident history, deficiency free
    • Estimated Building Value: $500,000
    • Currently operating at capacity

*amounts may vary

Services

This business is a residential care facility and is not a locked door facility.  Many of the residents are fairly independent, but may require assistance with tasks throughout the day.  Services provided to residents include:

  • Room to residents includes:
    • ADA bathroom with walk-in shower
    • Generous-sized room; closet, ceiling fan, individual heating and air in addition to central heating and air
  • All meals provided to residents
  • Transportation provided as needed
  • Medication management
  • Scheduling extended care services
    • Occupational therapy
    • Physical therapy
    • Hospice care
    • Nursing services, etc.

Employees

  • 4 FT employees
    • CMAs
  • 3PRN employees
    • CNA - 2 employees soon to have CMA license
    • LPN – 1 employee

Growth Opportunities

  • Expand facilities

 

  • Expand services offered

 

  • Work with Medicaid and Medicare

Valuation Details

The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business. 

The formula used is as follows:

Cash Flow       x          Prescribed Multiple     =          Fair Market Value

Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.

For this business, a 2018 Cash Flow was used with a prescribed multiple is 3.  With this information, the computation is as follows:

$37,756           x          3          =          $113,268

The Fair Market Value found above positions the business List Price at $113,000.

Funding Example

Purchase Price:                       $113,000

25%Buyer Down Payment:     $28,250

25%Seller Financing:               $28,250

50%Bank Loan:                        $56,500

Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $527.

Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $825.

After business expenses and loan payments, a buyer with a 25% down payment of $28,250 would retain a profit of $21,531 which results in a 76% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $113,000 with the terms listed above, the coverage ratio is 2.33. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

Purchase Price:

$113,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2018 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2018 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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