Dear Joseph,

You replied: "I plan on being the person to fund the venture. I have
a friend who will be the Administrator and partner. She has 7yrs
experience as an Administrator in a Skilled nursing facility."

First, it's hard to make much profit, other than the real estate in a
6-bed facility, especially when you are not the owner/operator.
Secondly, why would a Licensed Nursing Homes Administrator want to
run a 6-bed facility, when she could be making a LOT more money
running a SNF? Just because she is an Administrator doesn't mean
that she's a good "hands on" caregiver. Many Administrators won't do
the "hands on" care, and that can increase your staffing cost
greatly. In a 6-bed facility she will have to do many things
herself, it's not like an SNF where you have people to do things for
you.

In California, the licensing agency hosts orientation classes for
those interested in getting into the business. I strongly recommend
you attend one, before going any further. You can find out about
those by becoming a free ProvidersWeb Member and click on "State
Pages" and finding the nearest licensing office to you. Contact them
to find out when the next class is.

You do need to look at the last three years of tax statements from
any business you buy. If the sellers say they made cash money not on
the books, I wouldn't believe it.

You can easily look at any facility's reputation by going to the
licensing district office and looking at their public file to see
what problems they have been having. It doesn't cost a thing, and it
is one of the most important things you can to when considering
buying an existing RCFE business. Most facilities that are up for
sale usually are being sold due to problems.

Remodeling can cost you. There are ramps, accessible bathrooms, fire
exits, and other costs to consider. The cost can range from $15,000
to over $50,000.

If you don't know how to do a Profit and Loss statement, that's one
of the first things you need to learn. I recommend you become a free
Member to www.ProvidersWeb.com, and download the following three
documents:


Getting Into Business - Free
http://www.ProvidersWeb.com/doc.aspx?id=1920

SBA Business Plans –Free
http://www.ProvidersWeb.com/doc.aspx?id=1928

Starting a 6 bed facility - Free
http://www.ProvidersWeb.com/doc.aspx?id=2811

Then if you are still serious, I recommend you join
www.ProvidersWeb.com and get a 6-month's Subscription for $189. Then
download these documents:

Building a Building
http://www.ProvidersWeb.com/doc.aspx?id=2869

Business Plans
http://www.ProvidersWeb.com/doc.aspx?id=1927

Business Ownership
http://www.ProvidersWeb.com/doc.aspx?id=1925

Business Legal Basics
http://www.ProvidersWeb.com/doc.aspx?id=1945

Monthly Operating Statement
http://www.ProvidersWeb.com/doc.aspx?id=1981

Financial Planning
http://www.ProvidersWeb.com/doc.aspx?id=2294

The legal responsibilities are different than other businesses. If
you are the licensee and you don't provide good care, you could be
held accountable legally. For example, if your facility is found
guilty of neglecting your residents, you could face a jail term. Not
to scare you, but if you are in it for the money, usually a 6-bed
facility is not worth it. If you are in the business because you
want to make the world a better place by helping people, and don't
mind not making very much money at it, then I would say you have a
chance for success.

Good Luck,
~Diane


--- In AskDianeProvidersWeb@yahoogroups.com, "Joseph_LD"
<joseph_ld@...> wrote:
>
> Hi Diane,
> Happy New year! Well let me answer your response.
>
> 1. No. I plan on being the person to fund the venture. I have a
> friend who will be the administrator and partner. She has 7yrs
> experience as an administrator in a Skilled nursing facility.
> 2. Yes, see #1 above.
> 3. No, my partner does.
> 4. Yes.
> 5. yes, I've calculated tax and insurance, except remodeling
> cost? How do I calculate that?
> 6. No, I don't know how to do a "real" P&L.
> 7. I've only seen ads and some advertise they will provide some
> training.
> 8. yes.
> 9. I don't know but I am sure you are correct.
> 10. No. I have only looked at ads. I am sure the 3yrs tax record
> is to analyze their profit and loss?
> 11. No. How do I check out the owners/facilities repuation?
> 12. I am not a member of providers.
>
> 2yrs on hand cash is a lot of money.
>
> Thanks for the detailed reply. I look forward to more of your
> response.
>
> Joseph
>
>
> --- In AskDianeProvidersWeb@yahoogroups.com, "Diane Morrow"
> <feathrstar@> wrote:
> >
> > Hi Joseph,
> >
> > Thank you for writing. The answer to your question is not easy.
> In
> > order to answer I need more information from you.
> > 1. How much experience do you have taking care of people?
> > 2. Do you have family or friends that can help you - that do have
> job
> > experience in caring for others?
> > 3. Do you have any experience in marketing?
> > 4. Is the primary reason you want to open an RCFE is to
> make "good"
> > money?
> > 5. Do you have a home in mind to buy? If so, have you calculated
> the
> > monthly payment, plus insurance, taxes and the cost to remodel?
> > 6. Have you ever been in business for yourself and do you know
how
> to
> > do a real profit and loss statement?
> > 7. If you were to buy the existing home, how much training will
> the
> > current owner provide for you?
> > 8. Since the current owner's mortgage payments, taxes and
> insurance
> > will be based on when the home was purchased, have you factored
in
> > the increases you will have to pay in your projected profit and
> loss?
> > 9. Is the current owner paying the live-in staff according to
> > federal and state law requirements? (In many cases, I have found
> > they are not. Check out ProvidersWeb's past newsletters for info
> on
> > live in wages.)
> > 10. Have you reviewed the last 3 years tax records of the
business
> > you want to buy?
> > 11. Have you checked out the reputation (from outside sources)
for
> > the business you are interested in buying?
> > 12. Are you a member of ProvidersWeb.com?
> >
> > By the way, if you are starting your own business, the rule of
> thumb
> > is to have enough money to carry your business for 2 years on
> hand,
> > and that is very important. You cannot run out of money for
food,
> > staff, utilities, etc.. when you are taking care of people.
> >
> > As for the questions about my two lawsuits, I will share more
> about
> > those in ProvidersWeb's January Newsletter.
> >
> > Sincerely,
> > ~Diane
> >
> >
> > --- In AskDianeProvidersWeb@yahoogroups.com, "Joseph_LD"
> > <joseph_ld@> wrote:
> > >
> > > Diane,
> > > I plan on starting an RCFE as a business owner, and hire an
> > > administrator to run the facility. From a cash flow stand
point,
> > will
> > > I net more monthly income if I purchase a 6bedroom RCFE that
> > already
> > > is 100% occupied or buy a home and turn it into a 6bedroom RCFE
> and
> > > have it fully occupied?
> > >
> > > Also, may you elaborate on the 2 lawsuits you had?
> > >
> > > thanks,
> > > Joseph
> > >
> >
>