https://awadcapitaladvisors.com/blog/ An ongoing set of articles on how deals actually get underwritten and financed, what the market is doing, and the parts of this business that stay behind the curtain. en-us https://awadcapitaladvisors.com/blog/sba-7a-vs-504-assisted-living-acquisition/ https://awadcapitaladvisors.com/blog/sba-7a-vs-504-assisted-living-acquisition/ Assisted Living SBA Financing The 504 gives you a cheaper fixed rate on the building but will not touch the business, the license value or your working capital, and most care acquisitions need all three financed. https://awadcapitaladvisors.com/blog/how-to-buy-an-assisted-living-facility/ https://awadcapitaladvisors.com/blog/how-to-buy-an-assisted-living-facility/ Assisted Living Due Diligence Financing You are buying a building, a business, and a license at once, and each one can fail on its own at closing. https://awadcapitaladvisors.com/blog/hud-232-minimum-loan-size/ https://awadcapitaladvisors.com/blog/hud-232-minimum-loan-size/ Assisted Living HUD and Agency Financing HUD does not set a minimum loan size, but the economics of the program quietly do, and smaller buyers need a different plan. https://awadcapitaladvisors.com/blog/payroll-census-acuity-assisted-living/ https://awadcapitaladvisors.com/blog/payroll-census-acuity-assisted-living/ Assisted Living Underwriting Underwriting assisted living expenses per square foot is a multifamily habit that hides the largest cost in the building. https://awadcapitaladvisors.com/blog/independent-living-vs-multifamily-underwriting/ https://awadcapitaladvisors.com/blog/independent-living-vs-multifamily-underwriting/ Independent Living Multifamily Underwriting A community full of apartments can still be an operating business, and the underwriting, the lender, and the risks all follow from that. https://awadcapitaladvisors.com/blog/rent-roll-vs-offering-memorandum/ https://awadcapitaladvisors.com/blog/rent-roll-vs-offering-memorandum/ Multifamily Due Diligence Underwriting The offering memorandum tells the story the seller wants told, and the rent roll is where that story gets checked. https://awadcapitaladvisors.com/blog/sba-personal-guarantee/ https://awadcapitaladvisors.com/blog/sba-personal-guarantee/ SBA Financing Structure The SBA guarantee is unlimited, but how far it reaches depends on your ownership share, your home equity, and who else signs. https://awadcapitaladvisors.com/blog/multifamily-operating-expenses-per-unit/ https://awadcapitaladvisors.com/blog/multifamily-operating-expenses-per-unit/ Multifamily Underwriting The seller's expenses reflect the seller's taxes, insurance, and habits, and none of those come with the building. https://awadcapitaladvisors.com/blog/debt-yield-vs-dscr/ https://awadcapitaladvisors.com/blog/debt-yield-vs-dscr/ Financing Underwriting DSCR moves with the interest rate and the loan terms, while debt yield does not, which is exactly why lenders use it to cap your loan. https://awadcapitaladvisors.com/blog/michigan-property-tax-uncapping/ https://awadcapitaladvisors.com/blog/michigan-property-tax-uncapping/ Due Diligence Underwriting The seller's tax bill is built on a capped value that resets the year after you buy, and the jump can erase your first year of cash flow. https://awadcapitaladvisors.com/blog/michigan-adult-foster-care-vs-home-for-the-aged/ https://awadcapitaladvisors.com/blog/michigan-adult-foster-care-vs-home-for-the-aged/ Assisted Living Due Diligence Most small care homes listed as assisted living are licensed as adult foster care, and the license decides who you can serve, how far you can grow and who has to live in the house. https://awadcapitaladvisors.com/blog/sba-loan-independent-living/ https://awadcapitaladvisors.com/blog/sba-loan-independent-living/ Independent Living SBA Financing SBA will lend on assisted living because it delivers care, and it will not lend on independent living because, under its rules, renting apartments to seniors is still renting apartments. https://awadcapitaladvisors.com/blog/value-add-renovation-premium/ https://awadcapitaladvisors.com/blog/value-add-renovation-premium/ Multifamily Underwriting A value-add plan only creates value if renovated units rent for enough more to pay back the work, and the market sets that number, not the pro forma. https://awadcapitaladvisors.com/blog/commercial-real-estate-due-diligence-checklist/ https://awadcapitaladvisors.com/blog/commercial-real-estate-due-diligence-checklist/ Due Diligence Every checklist covers the rent roll and the T12, and the deals that go wrong usually go wrong in the contracts, deposits and records nobody requested until a week before closing. https://awadcapitaladvisors.com/blog/sba-owner-occupancy-rule/ https://awadcapitaladvisors.com/blog/sba-owner-occupancy-rule/ Financing SBA SBA will finance a building you share with tenants, but only if your business fills enough of it, and the measurement is stricter than most buyers expect. https://awadcapitaladvisors.com/blog/hud-232-loan-assisted-living/ https://awadcapitaladvisors.com/blog/hud-232-loan-assisted-living/ Financing HUD and Agency Assisted Living HUD 232 debt is long, fixed and non-recourse, and you pay for it with a slow approval, strict eligibility and a property that has to prove itself first. https://awadcapitaladvisors.com/blog/assisted-living-labor-cost-percentage/ https://awadcapitaladvisors.com/blog/assisted-living-labor-cost-percentage/ Assisted Living Underwriting Labor is the largest expense in assisted living, and a seller's margin is only believable once you rebuild payroll for the staff you will actually have to hire. https://awadcapitaladvisors.com/blog/memory-care-vs-assisted-living-cost/ https://awadcapitaladvisors.com/blog/memory-care-vs-assisted-living-cost/ Assisted Living Memory Care Underwriting Memory care charges more per resident than assisted living, and the extra staffing, training and secured space can absorb most of that premium before it reaches your margin. https://awadcapitaladvisors.com/blog/minnesota-assisted-living-dementia-care-license/ https://awadcapitaladvisors.com/blog/minnesota-assisted-living-dementia-care-license/ Assisted Living Memory Care Due Diligence The state licenses two kinds of assisted living, and the one you need depends on whether the building has a secured dementia care unit, not on what the seller calls it. https://awadcapitaladvisors.com/blog/senior-housing-turnover-vs-apartment-turnover/ https://awadcapitaladvisors.com/blog/senior-housing-turnover-vs-apartment-turnover/ Independent Living Underwriting Senior housing residents stay longer than apartment tenants, but they leave for reasons no rent cut can fix, and every vacancy takes longer and costs more to fill. https://awadcapitaladvisors.com/blog/rubs-income-lender/ https://awadcapitaladvisors.com/blog/rubs-income-lender/ Multifamily Financing Underwriting A ratio utility billing program can add real income to an apartment building, but lenders count what tenants have actually paid, not what the seller says the formula should bring in. https://awadcapitaladvisors.com/blog/colorado-for-cause-eviction-law/ https://awadcapitaladvisors.com/blog/colorado-for-cause-eviction-law/ Multifamily Due Diligence Since April 2024, a landlord needs a legal reason to evict most long-term tenants or decline to renew their leases, and that changes how fast a new owner can reposition a building. https://awadcapitaladvisors.com/blog/tennessee-franchise-excise-tax-rental-llc/ https://awadcapitaladvisors.com/blog/tennessee-franchise-excise-tax-rental-llc/ Due Diligence Underwriting There is no tax on your wages, but the LLC that owns your apartment building pays tax on its earnings and its net worth every year, and on its gain when you sell. https://awadcapitaladvisors.com/blog/south-carolina-property-tax-after-sale/ https://awadcapitaladvisors.com/blog/south-carolina-property-tax-after-sale/ Due Diligence Underwriting A sale resets your rental or commercial property to full market value, but an exemption most buyers never claim can take a quarter off that value if you apply on time. https://awadcapitaladvisors.com/blog/sba-loan-adult-day-care/ https://awadcapitaladvisors.com/blog/sba-loan-adult-day-care/ Financing Adult Day Care SBA An adult day care center qualifies for SBA financing, but approval turns on licensing, payer contracts, your own cash and how the lender reads your experience. https://awadcapitaladvisors.com/blog/interest-only-period-ending/ https://awadcapitaladvisors.com/blog/interest-only-period-ending/ Financing Structure Interest-only years make a deal look stronger than it is, and the payment jump when amortization starts can cut cash flow by close to half. https://awadcapitaladvisors.com/blog/assisted-living-level-of-care-fees/ https://awadcapitaladvisors.com/blog/assisted-living-level-of-care-fees/ Assisted Living Underwriting Due Diligence Care fees can carry a large share of assisted living revenue, and they are among the easiest numbers in a seller's statements to inflate. https://awadcapitaladvisors.com/blog/arizona-assisted-living-license-transfer/ https://awadcapitaladvisors.com/blog/arizona-assisted-living-license-transfer/ Assisted Living Due Diligence The license stays with the seller, so the buyer applies for its own and cannot operate a single day until the state issues it. https://awadcapitaladvisors.com/blog/illinois-supportive-living-program/ https://awadcapitaladvisors.com/blog/illinois-supportive-living-program/ Assisted Living Underwriting The state pays for services in certified supportive living buildings through a Medicaid waiver tied to nursing home rates, while residents pay a capped amount for room and board. https://awadcapitaladvisors.com/blog/independent-living-dining-costs/ https://awadcapitaladvisors.com/blog/independent-living-dining-costs/ Independent Living Underwriting Dining is the largest service cost in most independent living communities, and its mostly fixed labor makes margins sensitive to every empty apartment. https://awadcapitaladvisors.com/blog/first-time-apartment-sponsor-lender/ https://awadcapitaladvisors.com/blog/first-time-apartment-sponsor-lender/ Multifamily Financing The building has to qualify, but so do you, and the net worth, liquidity and experience tests decide whether a first deal gets financed at all. https://awadcapitaladvisors.com/blog/multifamily-insurance-cost/ https://awadcapitaladvisors.com/blog/multifamily-insurance-cost/ Multifamily Underwriting Due Diligence Insurance has been the fastest-rising apartment expense, and the premium on a seller's T12 reflects a history, a policy and a market that may not carry over to you. https://awadcapitaladvisors.com/blog/florida-property-tax-after-you-buy/ https://awadcapitaladvisors.com/blog/florida-property-tax-after-you-buy/ Due Diligence Underwriting The cap that held the seller's assessment down resets when you buy, and the jump to market value shows up on the first bill after your first January 1. https://awadcapitaladvisors.com/blog/washington-real-estate-excise-tax-apartment-sale/ https://awadcapitaladvisors.com/blog/washington-real-estate-excise-tax-apartment-sale/ Due Diligence Multifamily The state taxes every apartment sale on a graduated scale that tops out at 3 percent, and selling or buying a controlling interest in the LLC triggers the same tax as a deed. https://awadcapitaladvisors.com/blog/texas-assisted-living-change-of-ownership/ https://awadcapitaladvisors.com/blog/texas-assisted-living-change-of-ownership/ Assisted Living Due Diligence The buyer needs its own temporary license, then a three-year license after an inspection, and the paperwork has to reach the state at least 30 days before the sale. https://awadcapitaladvisors.com/blog/north-carolina-certificate-of-need-adult-care-homes/ https://awadcapitaladvisors.com/blog/north-carolina-certificate-of-need-adult-care-homes/ Due Diligence Assisted Living Adding beds requires state approval that is only available where the state projects a need, so the licensed beds in an existing home are a scarce asset you are buying along with the building. https://awadcapitaladvisors.com/blog/oregon-assisted-living-acuity-based-staffing/ https://awadcapitaladvisors.com/blog/oregon-assisted-living-acuity-based-staffing/ Assisted Living Memory Care Underwriting Staffing is set by each resident's measured care needs rather than a fixed ratio, so payroll rises as residents age in place and a seller's schedule can understate what the building really needs. https://awadcapitaladvisors.com/blog/buying-an-adult-day-care-in-texas/ https://awadcapitaladvisors.com/blog/buying-an-adult-day-care-in-texas/ Adult Day Care Due Diligence The license stays with the seller, the buyer works through a 90-day temporary license and an inspection, and the Medicaid contract that pays most centers has to move separately. https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-equity-injection/ https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-equity-injection/ Financing SBA Structure The 10 percent minimum on a first business purchase can no longer be waived, at least half of it has to be money that is genuinely yours, and some costs buyers used to count no longer qualify. https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-dscr/ https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-dscr/ Financing SBA Underwriting First-time buyers now need 1.25 times coverage measured on the business's past results, and projections can no longer carry a loan that the history does not support. https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-quality-of-earnings/ https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-quality-of-earnings/ Financing SBA Due Diligence Acquisitions and expansions with a business price of $3 million or more now require an independent review that tests the seller's earnings against the bank records, and the lender has to size your loan on what that review finds. https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-seller-consulting/ https://awadcapitaladvisors.com/blog/sba-sop-50-10-8-1-seller-consulting/ Financing SBA Structure A seller can now stay on for up to two years after the sale instead of one, which gives buyers of relationship-driven businesses more time but brings new questions about payment and control. https://awadcapitaladvisors.com/blog/1031-exchange-after-2025-tax-law/ https://awadcapitaladvisors.com/blog/1031-exchange-after-2025-tax-law/ Due Diligence Structure The exchange rules for real estate came through the 2025 tax law untouched, but permanent bonus depreciation and a rebuilt opportunity zone program change how sellers and buyers should think about them.