Adult Foster Care Home

[CindyR]

Exactly what is an 'adult foster care home'?? Is that where grown ups go when they can no longer live with their mommy and daddy? we have adult care homes and senior care homes and rehabilitation type homes and disabled people homes but when do adults go to foster homes?

And another question for the OP to consider is who is the intended user and what is the intended use of the appraisal. I did some of these residential care homes for Fannie Mae foreclosure analysis. They only cared about the real estate because the home was not going to be a care facility when they got it back.

 

[Meandering]

California
http://www.ccld.ca.gov/res/pdf/ASC.pdf
and the facility is licensed
http://ccld.ca.gov/PG4872.htm

Colorado
https://www.colorado.gov/pacific/cdphe/assisted-living-provider-resources\
and
Alternative Care Facility (ACF) Medicaid certification

 

[Meandering]

And Medicare as it's own requirements (surprised?)

The basic life safety from fire requirement for facilities participating in the Medicare and Medicaid programs is compliance with the 2000 edition of the NFPA LSC. CMS partners with State Agencies (SA) to assess facilities for compliance with the LSC requirements. SAs may enter into subagreements or contracts with the State Fire Marshal offices or other State agencies responsible for enforcing State fire code requirements. Under these agreements, the designated State fire authority generally agrees to:

https://www.cms.gov/Medicare/Provid...tification/CertificationandComplianc/LSC.html

 

[hastalavista]

Marion-

I think we've talked about this before?
For small residential care facilities, the license does not transfer with the property. If someone wants to purchase the home and continue to operate it as a care facility, they first need to get licensed and then the house gets its care facility permit (presuming it meets the requirements... which for continued operation would be the expectation).
A house cannot be permitted to operate as a care facility unless the owner is licensed first. The permit does not run with the property; it is specific to the ownership. If the licensed operator wants to relocate to another house, then they will submit an application to get the new house permitted; when they leave the existing house, it loses its care facility permit.

The income stream as a care facility is linked to the BEV of the operation.
The value of the real property would not include BEV or FF&E. The non-BEV income producing capability of the property would be that of a residential rental. Without the specific owner being licensed to operate the property as a care facility, there is no care facility.

At least, that is the way it works in California. As I said, a particular appraiser must check their own local laws/regulations.

 

[Gobears81]

Marion-

I think we've talked about this before?
For small residential care facilities, the license does not transfer with the property. If someone wants to purchase the home and continue to operate it as a care facility, they first need to get licensed and then the house gets its care facility permit (presuming it meets the requirements... which for continued operation would be the expectation).
A house cannot be permitted to operate as a care facility unless the owner is licensed first. The permit does not run with the property; it is specific to the ownership. If the licensed operator wants to relocate to another house, then they will submit an application to get the new house permitted; when they leave the existing house, it loses its care facility permit.

The income stream as a care facility is linked to the BEV of the operation.
The value of the real property would not include BEV or FF&E. The non-BEV income producing capability of the property would be that of a residential rental. Without the specific owner being licensed to operate the property as a care facility, there is no care facility.

At least, that is the way it works in California. As I said, a particular appraiser must check their own local laws/regulations.

I suppose that it depends on the most likely purchaser and highest and best use. If the residence was designed as a single family residence, there is some chance that it would be purchased for re-conversion back to SF. But, depending on how it was converted from a residence, items such as sprinkler system and the type of finish out would be probably be an adversity, rather than an accepted market standard (again, depending on the market and the specific characteristics of the property). But these conversions in themselves require some knowledge of the adult foster care market (I use that term loosely since that is the title of this thread) to determine the highest and best use and the most likely purchaser. If the property was designed for an adult foster care residence, there are a lot of different options if it is converted, and based on my experience (property designs and markets may vary of course), conversion to single-family residential or even some sort of group house (such as those leased to multiple college students, rather than an alternative type of foster home) is unlikely. Changes in governmental regulations (including the aforementioned court ruling affecting developmentally disabled residential options in Illinois, as well as late payments by governmental entities) increase the need for appraiser comprehension of said items.

With all of that said, if this is truly a single-family residence that has not undergone significant conversions, I can see the argument. From a banking standpoint, if a property is at risk of getting foreclosed on because of factors resulting in a shift in the market for adult foster care, I'd probably rather have an appraiser that understood some of those implications, but maybe that's just me.

 

[Meandering]

Slow down D,

First let's agree.

Both the owner AND the facility (building) must be licensed, as the "facility" needs to meet certain specific requirements, without regard to the owner's license to operate, yes?

So as a vacant building which previously had been licensed as a day care, or assisted living facility, it is available to the market as either/or:
1. SFR
2. SFR Rental
3. Licensable care facility, - given a care business owner license,
4. Leasing as a Licensable care facility - given the lease(e) has a care business license.

Not all SFR qualify for use as care facilities, that's why there are special requirements for licensure of the facility. Agree? Things such as zoning, HOA's, Steps, ingress, egress, ADA compliance and such, limit the availability of some properties for this use, yes?

Given the greater utility of the real estate, over typical SFRs, how can you say H&B is SFR while ignoring a current or previous facility license?

I know more than a few people in the healthcare industry that are currently looking for licensable care facilities both to buy and to rent.

Every 3 months or so, colleges and trade schools are graduating CNA's LPNs RNs, PAs, MDs and even social workers that can partner to get the right mix of professionals needed for a license.

There is demand for such properties, over an above SFR, as they are now specialty properties, being available for licensure.

The number of old people is increasing, and you can search the state's websites for the various "needs" surveys, and the state's 2020 plans for Alzheimer's community care, yada, yada. The government push to keep old people in communities and outside of nursing homes is giant.

You might also consider this federal update:

U.S. Department of Health & Human ServicesOffice of the Assistant Secretary for Planning
And Evaluation National Plan to Address Alzheimer’s Disease: (2015). 2015 Update. Washington DC. Retrieved from: https://aspe.hhs.gov/national-plan-address-alzheimer’s-disease-2015-update



.

 

[hastalavista]

Marion

I thought I covered all that in my first post when I said HBU will determine if the subject is an SFR?

 

[Meandering]

Marion

I thought I covered all that in my first post when I said HBU will determine if the subject is an SFR?

Mine as well. Have done a number of these. H&BU is residential.

Nope. you just said H&B is residential.

Not that it "can be", or even if there was an analysis concerning other properties that were licensable for similar use as an adult day care facility.

Sorry.

.

 

[George Hatch]

The house is fairly typical when it comes to rooms and baths, nothing out of the ordinary.

IN THIS REGION, the above description would virtually always lead to an HBU conclusion as an SFR. If the property is under lease that might affect the value of the property rights appraised but other than that a lender getting one of these back isn't getting everything it takes to operate the business, certainly not the licensing and probably not the stabilized occupancy. If there's nothing else about the property that distinguishes it for this use then it's got no more nor less potential for this occupancy than any other home.

With that said it would still be smart to check on sales of properties that have mention of group home occupancy in their MLS listings. Depending on your MLS you can always look at old business interest listings and check the sales histories on those properties to isolate any spiffs they might demonstrate for the non-realty interests.

The HBU conclusion is an opinion to be developed, not an assumption to make.

 

[JTip]

Both the owner AND the facility (building) must be licensed, as the "facility" needs to meet certain specific requirements, without regard to the owner's license to operate, yes?

To comply with state codes, local ordinances (zoning or not), you have to be accessible. Door widths and thresholds, at grade access or ramps, big bath for turning radius..... Converting a single family improvement to comply with code is expensive. Been there, done that. A plastic, compliant braille exit sign cost me $40 x two doors. And that was only the beginning of the money storm.

I changed H&BU that day. Don't want to do that again.