Four Rules for Nursing Home Sales while Protecting Your Residents and Staff
Owners have contacted me about nursing home sales after the coronavirus pandemic settles down. If you’re thinking the same, you’re in the right place. With this purpose in mind, we’ll look at some key points you can follow to prepare on your own. So, without further ado, let us dive right into the what you must do to sell your nursing home.
Straightway, I will cover four rules to guide you with nursing home sales. Foremost, keep in mind that patience will be a huge benefit. Yes, this will be a long process. Without a doubt, most people miss opportunities because of lack of patience. Hopefully, you won’t be one of them. With this in mind, you just need to understand the process is lengthy but not impossible. To that end, I’ll help you prepare in advance.
The Four Rules of Nursing Home Sales
Rule Number 1 – Increase Your Nursing Home Value
Fortunately, there’re a few techniques to increase your nursing home value;
- First off; this is the perfect time to contact your referral sources. Contact them regularly; make yourself useful. In other words, provide helpful information on seniors, your events, and caregiver resources. Buyers see multiple referral sources as a big positive.
- Second; work with your staff to develop new methods to increase your census. Revenue growth is a priority for nursing home sales.
- Third; review your expenses. Definitely, halt unwanted expenses and review the impact with your staff. In addition, you want to eliminate unnecessary owner expenses.
- Fourth; examine your staff and eliminate unnecessary or add crucial positions that impact operations of your nursing home. Above all, improve quality of care.
- Fifth; inspect, examine and renovate your physical plant. If possible, replace your floors, roof and bathrooms. You must remember, buyers won’t be excited about a rundown building.
Rule Number 2 – Find The Perfect Buyer
Keep in mind, there are several ways to find buyers for your nursing home. Those being;
- Physicians: Sometimes, medical directors evolve to nursing home owners. In fact, Medicare doctors are viable candidates to buy your facility. If in doubt, ask them.
- National Investment Center for Seniors Housing & Care (NIC): NIC is a non-profit whose mission is to support access and choice for America’s seniors by providing data, analytics, and connections that bring together investors and providers. Without a doubt, NIC conferences are great networking events for nursing home operators, investors and suppliers. You never know; you may meet your next nursing home sales partner at NIC.
- Property Tax Appraisal District: In Texas, you can access county property tax databases through the Texas Comptroller of Public Accounts website. By examining the records, you learn who owns the nursing home real estate. It’s possible, someone who owns a nursing home might buy yours.
- State Regulatory Agencies: As you know, each state has a government agency that regulates senior housing. In Texas, it’s the Texas Health and Human Services. The agency can help find your potential buyer. These agencies manage, license, and track skilled nursing facilities. With this information, contact each nursing home owner and ask if they’re interested in owning yours.
- Senior Housing Contacts: Contact your colleagues and let them know that you’re selling. Here, be careful. For privacy, they need to sign a confidentiality agreement. In other words, don’t give everyone your secrets.
Rule number 3 – Don’t do these things while selling your nursing home
Balanced against what you need to do, there’re several things you shouldn’t do;
- Don’t tell everyone that you are selling: On the contrary, tell people who’ll buy your nursing home. Don’t let your line staff find out. Why? Your nurses & nurses assistants will start looking for other jobs.
- Don’t contact your local Realtor: Think about it, they sell real estate, not businesses. Senior Housing is real estate and more. So naturally, they won’t understand the concept of a 24/7 post-acute medical facility or how to sell it.
- Don’t let the buyer use their local bank: In reality, most banks have limited experience with nursing homes. To be honest, skilled nursing facilities don’t appeal to them. They like assisted and independent living facilities. Worst-case scenario, the local bank without experience will reject the loan.
- Don’t let your estate planning attorney handle the sale: They protect your estate, not your business. As a matter of fact, good attorneys tell you they don’t have nursing home experience and refer someone who does.
Rule number 4 – Avoid these common mistakes that delay nursing home sales
Without a doubt, these results in failed and delayed nursing home sales;
- Most importantly, avoid a team with no nursing home sales experience: Initially, they will slow down the sales process. They will learn on your dime and time. Eventually, they will frustrate you and your buyer. Undoubtably, they can kill your deal.
- Furthermore, avoid unorganized financials: First, you would want your financial statements to be as clean as possible. Second, you don’t want questions on your revenue and expenses. Third, double check the books before you begin the selling process.
- Moreover, avoid letting your census decline: Above all, the most important factor is your census. As you know, census is the driving force behind revenue. Trust me, stagnant revenue will never attract a buyer.
On the whole, following these rules will prepare you to sell your nursing home. Let’s face it; selling anything will be a challenge after the Coronavirus pandemic. A point often overlooked, a well run and maintained senior housing facility requires lots of hard work and a tenacious owner. Be that as it may, I know your will get it done. In conclusion, Good Luck and let me know if I can help.