Sell Your Nursing Home Faster | 5 Step Checklist To Answer All Your Buyer’s Questions

Selling your nursing home can be one of your biggest challenges as an owner. You’re not allowed to publicly promote that your nursing home is on the market.  Any moment a buyer’s contract could fall through.  How are you going to sell without telling anyone?  Helping you achieve financial success is the mission of Laurex Advisors.

Just running a nursing home can be stressful for a lot of reasons.  As the owner, the constant pressure from the government through regulations and inspections is enough to wear you down.  In addition, you don’t want to add more stress every time a buyer’s contract falls through

This article provides you a guide to Sell Your Nursing Home Faster.  It is meant to help make the selling process easier. Above all, buyers want to know about these 5 points.  Your ability to provide them will expedite the process to close the deal.

The 5 points are…

  1. Census Information
  2. Cost Reports
  3. Financials
  4. Market Information
  5. Physical Plant Information

Your end-goal is to be able to create a printable checklist and use it as a guide.  You can gather all the information about your nursing home and compile a complete report.  After that, you can give this report to potential buyers and speed up the process in whether they will buy or not.

This is what you will do:

  1. Print this checklist out.
  2. Gather all reports & information
  3. Make electronic copies for potential buyers

Census – 1st Point of the Checklist to Sell Your Nursing Home Faster

According to The Medical Dictionary of The Free Dictionary by Farlex, Census is:

  • An official count is the total number of patients admitted to the facility by midnight. 
  • Average Daily Census is the average number of patients per day over a given period of time.  Admitted patients and outpatients are counted separately.

The 5 things that you need to do:

  1. Breakdown the Census Reports by payer type
    • Medicare
    • Medicaid
    • Private Pay
    • VA
    • Other
  2. Breakdown the Census Reports by month
  3. Identify Quality Mix on the Census Reports
  4. Gather previous 3 years of Census Reports
  5. Gather current year-to-quarter of Census Reports

Good Job!  You have prepared the first section of your 5-Point Checklist.

Cost Reports – 2nd Point of the Checklist to Sell Your Nursing Home Faster

Cost Reports contain information such as facility characteristics, utilization data, cost and charges by cost center, Medicare settlement data, and financial statement data.  Source: CMS Medicare Provider Cost Report Public User Files

The 2 things that you need to gather:

  1. Provide Medicaid & Medicare reports.
  2. Provide the previous 3 reported years for each set of reports.

Excellent!  You have prepared the second section of your 5-Point Checklist.

Financials – 3rd Point of the Checklist

Financial Statements (or financial reports) are formal records of the financial activities and position of a skilled nursing facility.  They typically include four basic financial statements and we are going to focus on just one, the income statement or profit and loss report (P&L report).  The P&L report provides information on a skilled nursing facility’s income, expenses, and profits over a stated period of time.

The 3 things that you need to obtain:

  1. Income Statements.
  2. Provide the previous 3 years for each financial statement.
  3. Provide current year-to-quarter for each financial statement.

Great Work!  You have prepared the third section of your 5-Point Checklist.

Market – 4th Point of the Checklist to Sell Your Nursing Home Faster

Identifying the market area for your nursing home can be a difficult thing to do.  It is important to allow potential buyers to know who your target market or audience is.  This will allow them to quickly decide if your facility is the correct one to make an offer on.

The article by Tipping Point Communications titled: Identifying Your Audience: Skilled Nursing Homes provides 5 clear ways to answer these questions.

The 3 things that you need to collect:

  1. Provide a map with your skilled nursing facility target market area delineated.
  2. Provide demographic information for the target market or audience.
  3. Identify area hospitals within your market area or provide referrals to your nursing home.

Fantastic!  You have prepared the fourth section of your 5-Point Checklist.

Physical Plant – 5th Point of the Checklist

The physical plant is the component of the transaction that all buyers will pay close attention to.  The real estate will be an important part of the collateral for the bank loan.  The debt service will be one of the largest expenses and cause a great expense in terms of repairs and maintenance.  You need to make sure you provide accurate information on the physical plant.

The 5 things that you need to collect:

  1. Property ALTA Survey
  2. Facility Floorplan
  3. Major Capital Expenditures
  4. Aerial View
  5. Property Tax Record

You have prepared the fifth and final section of your 5 Point Checklist.  Now you can answer all your buyer’s questions.  Its time to celebrate – You are now ready to sell your nursing home faster.  Great Job!

Your 5 Point Check List to Sell Your Nursing Home Faster:

  1. Census Information
  2. Cost Reports
  3. Financials
  4. Market Information
  5. Physical Plant Information

What To Do Next?:

  1. Print this checklist out.
  2. Gather all reports & information
  3. Make electronic copies for potential buyers

You can also allow us to help you sell your nursing home faster: