How to Finance Every Stage of a Residential Assisted Living Project

Residential Assisted Living is a fast-growing real estate strategy that’s filling a critical gap in senior housing. With rising demand and limited supply, converting or building small-scale homes for shared senior living is quickly gaining momentum with investors.

But while the opportunity is strong, financing these projects is not straightforward. Residential Assisted Living properties don’t fit neatly into traditional loan categories. The buildings are residential, but the income model is commercial. There may be no existing tenants, and the home may not yet be licensed. For these reasons, most banks will decline the loan or delay funding beyond what’s practical for investors.

Alvear Lending is built specifically to solve this problem. We offer capital for the entire project lifecycle—from acquisition and construction to long-term refinance once the property is stabilized and cash flowing.

Here’s how we support each phase of a Residential Assisted Living investment.

Purchase Financing

Getting into the deal starts with securing the right property. Whether you’re buying an existing home for conversion or a teardown for new construction, we can fund a majority of the acquisition cost—even before the home is licensed or stabilized.

We finance up to 90 percent of the purchase price. No income or employment verification is required. We evaluate the real estate and project plan, not your personal tax returns.

This structure allows experienced investors and operators to act quickly in competitive markets and take control of high-potential properties.

Construction and Conversion Financing

Once the property is acquired, the next step is preparing it for use. That may involve cosmetic upgrades, ADA-compliant modifications, or ground-up development of a purpose-built Residential Assisted Living facility.

We fund 100 percent of construction costs. This includes vertical construction for those who already own the land.

Loan disbursements are made in draws, based on completed work and installed materials. This model supports both light renovations and complex buildouts. If timing or phasing becomes an issue, we can work with you on a tailored disbursement schedule.

Our focus is on making sure you can complete your project with the capital you need in place.

Operating Expenses and Working Capital

While construction is often the largest line item, investors should also plan for the operating costs required to get the property to stabilization.

This includes:

• Caregiver wages

• Licensing and regulatory fees

• Furnishings and equipment

• Utilities and insurance

• Marketing and lease-up costs

Alvear Lending does not include these working capital expenses in our loans. Borrowers will need to raise or allocate cash to cover these costs until the property is stabilized and qualifies for long-term financing.

One common structure used by investors is a master lease, where the property is leased to a healthcare or care management company, which in turn subleases the individual rooms to residents. This care company is often owned by the same investor or ownership group, allowing full control of both the real estate and the operations.

This model provides several advantages:

• Predictable rental income to the property entity

• Separation of liability between the real estate and the care operation

• Simpler underwriting for refinance once rental income is consistent

Once stabilized under a master lease, the property may qualify for a DSCR-based refinance based on the lease income.

Refinance After Stabilization

Once the Residential Assisted Living property is licensed, fully occupied, and generating steady income, Alvear Lending can provide a long-term refinance solution based on the cash flow of the property.

This is known as a DSCR loan (Debt Service Coverage Ratio). It allows you to refinance based on the income generated by the property—not your personal finances.

Key features include:

• Fixed-rate terms up to 30 years

• Interest-only options available

• No income, employment, or DTI requirements

• Cash-out options depending on property performance

This refinance option allows you to transition from short-term capital to a stable, long-term structure, and retain equity in the property while reducing your monthly expenses.

Crowdfunding Opportunities for Expansion

Once your Residential Assisted Living property is stabilized and generating consistent income, you may be thinking about what’s next. That’s where our affiliated platform, Alvear Ventures, comes in.

Alvear Ventures is a registered funding portal where qualified operators can raise equity from a pool of investors looking for real estate deals with a real track record behind them.

But we do things differently.

We only open up this opportunity to borrowers who’ve already completed at least one successful deal through our lending platform. That way, the investors on our portal are seeing projects from people who’ve already proven they can get a deal across the finish line.

We’ve found this helps everyone win:

• Operators can raise capital faster because they’ve earned trust

• Investors feel more confident backing deals with a history behind them

• The platform stays focused on real-world performance, not pitch decks

If you’ve closed a successful Residential Assisted Living project with us, this can be a natural next step giving you a path to grow without putting all the capital on your own shoulders.

Why Investors Work With Alvear Lending

Residential Assisted Living is a unique blend of real estate and operating business. Most lenders are not set up to understand or fund this type of deal. Alvear Lending is different.

We provide:

• Up to 90 percent financing on the purchase

• 100 percent financing on construction

• DSCR-based refinance once the property is stabilized

• A clear funding structure without junk fees

• Flexibility to meet the real demands of these projects

If you’re looking to enter the Residential Assisted Living space or scale your next project, we’re ready to help.

Let’s Talk

If you have a deal in motion or want to explore your options, we can walk you through how our programs work and what you’ll need to move forward. Whether you’re new to the space or scaling up, we can provide capital that moves at the speed you need.

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