PRACTICAL STEPS WHEN BUYING A CARE HOME

Having supported many care home purchasers over the years the acquisition journey continues to evolve alongside regulation and the complexities of due diligence in support of a finance application.

Having supported many care home purchasers over the years the acquisition journey continues to evolve alongside regulation and the complexities of due diligence in support of a finance application.

PREPARATION

As with all business preparation is key alongside a well-prepared business plan.


When buying a care home consider all the options:

  • If a first-time buyer lenders will want to explore your motivation for venturing into the care home sector alongside related experience Consider the regulated activity at the core of the business proposition, with examples being: 
    • Nursing Personal care 
    • Residential dementia 
    • Supported living 
    • Extra care

  • Ensure that your CV (with no gaps) stacks up alongside any additional investors/shareholders 
  • Complete an assessment of your asset and liabilities, income and expenditure ensuring all are aligned for the business venture
  • Whether a first-time buyer or a multi site existing group seeking to expand, consider how the additional care home sits within your expectations or future plans:
    • The size and number of beds in a care home are important, with lenders continuously assessing their lending policy criteria
    • At the time of going to print care homes with 30 or more beds tend to be favoured by many lenders, with supported living housing smaller units
    • Smaller units may suit different services; older properties often needing investment to adapt to current trends may come to the market as vacant possession or alternative use
    • On the other hand, smaller units within a manageable distance continue to be bought by small group operators with combined operational synergies and potential boutique appeal
    • Location remains key

CARE HOME PROPERTY SEARCH

Care home searches are usually via an online search, such as Buyacarehome, and/or relationships built up with care home property agents and finance brokers.

Once you have found a potential care home, the next step will be to carry out some initial market research:

  • Look at all publicly available information 
  • If a company, review financial and nonfinancial history at Companies House
  • If the care home is listed as a confidential sale, you will most likely need to sign a Non-Disclosure Agreement when asking for further details about the property and current business
  • Collate initial due diligence about the care home 
  • Review the website and social media 
  • Google for news items 
  • Location  
  • Is the care home easily accessible 
  • Is the care home capable of being staffed locally 
  • Gauge the reputation and community involvement 
  • Download CQC/regulator reports 
  • Are local GP practices or clinics nearby 
  • Where are the nearest hospitals, both NHS and private