Senior Facility Bed Expansion

A story about how Shaan's father-in-law runs a successful senior living facility business by finding undervalued properties and expanding their capacity.

"My father-in-law has senior living facilities. His model is he'll buy one that has, say, 32 beds but it's permitted for up to 80. The current owner doesn't have the motivation or construction experience to expand. He looks for that specifically - a good business where he can double the number of beds, which will double the net income, which will double the value of the property.

So if he's buying it for 4 million, it will be worth 8-10 million when he's done with it, and he has to put in 2 million in construction. Then he has a management company that actually runs the thing. I asked him 'Do you know how to run a senior living facility? Isn't that hard?' He said he doesn't go there - he found one really good property management company and they run all his properties. She's been doing this for 30 years.

It's all about occupancy. Every bed pays on average 6-8 thousand dollars per month. So just getting 4 more bookings adds an extra $30,000 a month to revenue. Every time I ask how business is going, he just says 'It's good, we lost 2 clients, we're gonna place another one today.'"