At a glance
A 24-bed Washington facility needs roughly $1.7M before opening
Plan on about $1.705 million of total project cash for the Typical scope, with a defensible founder-scale range of about $1.245 million to $2.310 million for the same 24-bed physical configuration. The statewide Base model produces $160,140 monthly earned revenue at 85% occupancy and a $7,850 blended resident-month rate, leaving $13,340 per month of normalized passive-owner cash operating profit before D&A. A qualified working owner who replaces the paid administrator has a modeled pre-tax business cash benefit of $23,840 per month, but $10,500 of that is the market-value labor being supplied by the owner rather than a return on capital.
This is a Washington statewide planning model, not a city forecast. Pricing is anchored to CareScout's 2025 statewide assisted-living median of $7,600 per month for a private one-bedroom; the Base rate of $7,850 is a modeled 2026 planning rate, not a published 2026 statewide average. Occupancy, build-out, insurance and local approvals remain quote- or address-dependent.
Configuration fingerprint
The 24-bed configuration stays fixed across all scopes and scenarios. A 2025 state report counted 556 assisted living facilities with 38,928 beds, averaging 70 beds and ranging from 7 to 253. This model is smaller than the statewide average, making 24/7 staffing coverage and occupancy especially sensitive.
Startup scope
Capital is driven by the building – not the license fee
The model assumes a lease rather than a property purchase. Lean means a previously care-compatible building with light code work; Typical means moderate renovation of an existing institutional or residential-care shell; Premium means a deeper conversion and higher-spec fit-out. Capacity remains 24 beds in every scope, so the extra Premium dollars do not automatically buy more revenue.
| Use of funds | Lean | Typical | Premium |
|---|---|---|---|
| Site & fit-out | |||
| Refundable lease / security deposit | $50,000 | $60,000 | $75,000 |
| Prepaid rent and opening occupancy | $25,000 | $30,000 | $35,000 |
| Renovation, fire/life-safety and accessibility work | $250,000 | $520,000 | $850,000 |
| Furniture, resident rooms, kitchen, laundry and clinical equipment | $190,000 | $260,000 | $350,000 |
| IT, nurse-call, access control and security | $55,000 | $70,000 | $95,000 |
| Launch & compliance | |||
| State licensing, construction review and local permit allowance | $30,000 | $40,000 | $60,000 |
| Design, legal, accounting and other professional work | $50,000 | $75,000 | $110,000 |
| Insurance deposit / binders – local quote required | $20,000 | $20,000 | $25,000 |
| Pre-opening payroll, recruitment and training | $100,000 | $120,000 | $140,000 |
| Opening supplies and launch marketing | $45,000 | $50,000 | $60,000 |
| Liquidity | |||
| Initial net working capital, excluding opening supplies above | $30,000 | $30,000 | $30,000 |
| Opening operating-cash reserve | $340,000 | $340,000 | $340,000 |
| Contingency | $60,000 | $90,000 | $140,000 |
| Total project cost / founder cash required before financing | $1,245,000 | $1,705,000 | $2,310,000 |
Washington's annual ALF licensing fee is $381 per licensed bed, or $9,144 for 24 beds. That fee sits inside the regulatory allowance; plan-review charges depend on project valuation under the Department of Health Construction Review Services fee schedule, while local permits and food approvals vary by address and are not treated as zero.
No debt, landlord allowance or grant is assumed, so founder cash required and peak interim cash both equal project cost. External funding reduces permanent equity only when it is contractually available before the related bills; later reimbursements do not reduce peak interim cash.
Licensing and launch
The license path is a 9 – 15 month dependency chain
Washington requires a complete ALF license application at least 90 days before the proposed effective date. The project still depends on site control, zoning, design, renovation, staffing and final approvals.
2 – 6 weeks; site should remain contingent on use, physical feasibility and financing.
4 – 10 weeks to document the 24-bed program, food service, life safety and resident spaces.
Agency processing SLA varies or is not published; run in parallel where allowed.
About 4 – 7 months in the Typical model; hidden conditions can extend this materially.
File the complete DSHS package at least 90 days ahead and build the 24/7 roster concurrently.
Close construction, occupancy, fire, food-service and licensing conditions before admitting residents.
| Requirement / deliverable | Authority / level | Fee or cost basis | Timing | Dependency / evidence |
|---|---|---|---|---|
| EIN and employer setup | IRS / Federal | No federal EIN fee | Before payroll / banking | Official EIN guidance; federal labor and workplace rules also apply once hiring begins. |
| Domestic LLC plus Washington business-license account | Secretary of State + DOR / State | $180 formation; $90 Business License Application; $70 annual LLC report | Early; standard entity filing typically 7 – 10 business days | SOS fees and state BLA fee. |
| DSHS Assisted Living Facility license | Residential Care Services / State | $381 per bed annually; $9,144 at 24 beds | Complete application ≥90 days before proposed effective date | Construction plans must be approved as required; application must be complete. RCW 18.20.050. |
| Construction Review Services approval | Department of Health / State | Per official construction-value fee schedule; exact project fee requires plan valuation | Not published as one universal SLA | Site plans and scope first; approval is a licensing dependency when review is required. The state Certificate of Need list does not identify ordinary ALFs as a covered facility category. |
| Zoning, building, occupancy, fire and signage approvals | City / county / fire authority | Varies by city/county; local quote required | Address- and scope-dependent | Confirm permitted use before nonrefundable lease/build-out commitments; final occupancy and fire sign-offs precede opening. |
| Food-service compliance and food worker cards | State food code + local health regulatory authority | Varies by local permit and food-worker card process | Before kitchen operation | ALF food service must meet WAC 388-78A-2305 and chapter 246-215 WAC. |
| Background checks, credentials and training | DSHS / State | Vendor / fingerprint / training costs vary | Before unsupervised access or required duties | Background checks, administrator qualification and long-term-care training are staffing gates. |
| Required liability coverage | DSHS rule / State | Premium quote required | Obtain upon licensure and maintain | Commercial liability minimum is $1M per occurrence / $2M aggregate; professional liability applies when the rule's conditions are met. |
Operating economics
Washington pricing works, but 24 beds leave a thin passive margin
Revenue is built from occupied resident-months, not a national revenue multiple. The Base calculation is 24 beds × 85% stabilized occupancy × $7,850 earned monthly resident rate = $160,140 per month. The $7,850 rate is net of modeled discounts, credits and bad debt; sales/use tax collected on separate taxable transactions would be a liability, not revenue.
| Metric | Downside | Base | Upside |
|---|---|---|---|
| Stabilized occupancy | 70.0% | 85.0% | 94.0% |
| Occupied resident-months | 16.80 | 20.40 | 22.56 |
| Blended earned rate / resident-month | $7,100 | $7,850 | $8,650 |
| Monthly revenue | $119,280 | $160,140 | $195,144 |
| Variable cost / resident-month | $1,550 | $1,500 | $1,525 |
| Fixed / step-fixed cash operating costs | $114,000 | $116,200 | $123,000 |
| Passive-owner cash operating profit before D&A | – $20,760 | $13,340 | $37,740 |
| Cash operating margin | – 17.4% | 8.3% | 19.3% |
| Annual revenue | $1,431,360 | $1,921,680 | $2,341,728 |
| Annual passive cash operating profit | – $249,120 | $160,080 | $452,880 |
CareScout's 2025 survey ranks Washington tenth-highest among states at $7,600 per month. The model does not assume every resident pays one sticker price: it treats $7,850 as the blended earned rate across room, board and care intensity after normal credits. The state tax treatment also matters. Washington DOR lists a specialized 0.275% B&O rate for Assisted Living Facilities. Under WAC 458-20-168, room and domiciliary-care gross income is reported in that classification, and meals furnished to residents as part of the service are not treated as retail meal sales. Separately sold tangible goods or visitor meals can have different tax treatment, so separate revenue streams should be coded distinctly.
Labor and cost control
Labor coverage is the operating fulcrum
Washington does not give this model a simple resident-to-staff ratio. The rule instead requires sufficient trained staff to meet resident service agreements, keep the facility safe and implement the disaster plan. For a 24-bed home, that means a base 24/7 coverage layer persists even when occupancy falls, which is why the Downside scenario loses money quickly.
| Cost family | Monthly amount | Basis |
|---|---|---|
| Resident-variable food, care increments, supplies, activity/transport, credits and B&O | $30,600 | $1,500 × 20.4 occupied resident-months |
| Baseline direct-care staffing coverage | $29,000 | Step-fixed 24/7 coverage layer; modeled wage schedule |
| Hospitality and clinical-support payroll | $23,000 | Kitchen, housekeeping, activities and nursing oversight |
| Administrator replacement payroll | $10,500 | $105,000 salary planning allowance + 20% load |
| Rent / CAM / occupancy cost | $30,000 | 16,000 SF × about $22.50/SF/year all-in modeled occupancy |
| Utilities, insurance, maintenance and waste | $14,000 | Insurance is a planning allowance; local broker quote required |
| Software, marketing and professional services | $6,000 | Resident records, communications, lead generation, accounting/legal |
| Licensing/training plus fixed transport and miscellaneous | $3,700 | Includes annual ALF license accrual and continuing compliance allowance |
| Total cash operating costs | $146,800 | Revenue $160,140 less costs = $13,340 passive cash operating profit |
The front-line wage plan uses roughly $27 per hour of cash wage and a modeled 22% payroll/benefit load for the core care schedule. That 22% is not a statutory tax rate: it is a planning bundle for employer payroll taxes, workers' compensation and benefits/leave. Washington's 2026 minimum wage is $17.13 per hour, while the state's current OEWS dataset should be used to benchmark each occupation. The model deliberately budgets above the statutory floor because continuous care cannot be staffed to a legal minimum-wage spreadsheet assumption.
Washington L&I's 2026 State Fund table lists risk class 6509, “Assisted Living, Adult Family Homes, Retirement Centers,” at a $0.8789 composite base rate per hour worked, up 12% from 2025. Actual employer premiums vary by experience and class details, so the model treats the official rate as an input to payroll burden, not a universal quoted premium.
Unit economics and owner income
Each occupied bed contributes $6,350 before fixed overhead
The natural unit is one occupied resident-month. Because the founder is not assumed to provide direct care in the manager-operated Base, there is no variable owner-replacement labor inside unit contribution. The paid administrator is fixed replacement labor and stays in the passive-owner fixed-cost base.
| Metric | Base value | Formula / interpretation |
|---|---|---|
| Earned revenue / occupied resident-month | $7,850 | Blended 2026 planning rate, net of discounts/credits |
| Food and resident consumables | $600 | Variable per occupied resident-month |
| Incremental care / acuity labor | $550 | Only occupancy-sensitive care time; baseline coverage stays fixed |
| Supplies, activities / transport, credits and B&O | $350 | $125 + $75 + $129 + about $21 B&O per resident-month |
| Passive / economic contribution | $6,350 | $7,850 – $1,500 variable costs; 80.9% contribution margin |
| Passive-owner cash operating profit | $13,340/mo. | $129,540 contribution – $116,200 fixed / step-fixed costs |
| Working-owner imputed administrator labor | $10,500/mo. | Avoided fully loaded administrator replacement cost |
| Working-owner pre-tax business cash benefit | $23,840/mo. | $13,340 residual business profit + $10,500 value of owner labor |
| Potential passive cash available after maintenance reserve | $10,840/mo. | $13,340 – $2,500 maintenance-capex reserve; before tax and financing |
What “owner income” means here
A distribution is not an expense. The passive-owner result includes a market replacement administrator before profit. The working-owner result adds back that one avoided payroll role only if the founder is qualified and actually performs it. It does not add back caregiver, nursing, kitchen or housekeeping labor. The $23,840 therefore should not be described as a salary or guaranteed take-home; $10,500 is labor value and $13,340 is residual operating return.
$160,140 – $30,600 – $116,200 = $13,340
Normalized passive-owner cash operating profit before D&A. Depreciation is not fabricated because asset tax lives and book basis are not modeled. Debt service and income-tax reserves are also excluded from operating costs.
The primary model is unlevered, so scheduled debt principal and interest are $0. Maintenance capex is shown below operating profit at $2,500 per month. No owner income-tax reserve is modeled because entity elections and the founder's federal/state tax position are not specified. Additional net working capital after stabilization is assumed $0 in the Base; if receivables, prepaids or resident deposits change, that change belongs in the cash schedule rather than being hidden inside operating expenses.
Break-even and payback
Break-even arrives around 76% occupancy
At the Base $6,350 passive contribution per resident-month, the paid-manager model needs 18.30 occupied beds on average to cover $116,200 of fixed and step-fixed operating costs. That is 76.2% of the 24-bed capacity. The 85% Base therefore has only an 8.8-point occupancy cushion before passive operating profit disappears.
16.65 residents; paid administrator removed from fixed cost.
18.30 residents; includes replacement administrator.
20.40 residents; modeled monthly revenue $160,140.
Passive break-even = $116,200 ÷ 80.89% = $143,649 / month
Equivalent to 18.30 occupied beds or 76.2% occupancy. Including the $2,500 monthly maintenance-capex reserve lifts the passive cash threshold to about $146,739, or 77.9% occupancy.
Runway and payback use the monthly cash schedule
The Base opening ramp starts at 35% occupancy, reaches 72% in month 6 and 85% by month 11. Manager-operated project cash reaches its deepest cumulative deficit at about $166,900 in month 7, then improves. The $340,000 opening reserve stays above the $100,000 minimum-cash floor throughout that modeled ramp.
Starting at the full $1.705 million Typical project capital contribution in month 0, then adding monthly project cash after the $2,500 maintenance-capex reserve, cumulative unlevered Base payback occurs in month 181, about 15.1 years. With no debt, that is also the founder-equity payback in the primary model. If a qualified founder replaces the administrator after opening, the labor-inclusive owner cash schedule reaches payback in month 92, about 7.7 years. That second figure is not a passive investment return: it includes $10,500 per month of owner labor that would otherwise be paid to an administrator. The prefunded reserve is counted once at month 0; ramp losses paid from it are not treated as new capital contributions.
State market context
The state has demand depth, but no public revenue series proves a statewide TAM
A reliable Washington assisted-living market-revenue amount is not publicly determinable from current public category data. Facility and bed counts do not reveal statewide occupied private-pay resident-months or realized rates, so multiplying licensed beds by one price would overstate revenue.
The most current DSHS 2026 small-business analysis cites 557 licensed ALFs and 38,379 licensed beds. Census QuickFacts reports a July 2025 state population estimate of 8,001,020 and 18.3% age 65 or older. Those are demand and supply proxies, not market revenue. A site-specific trade-area study should test referrals, competitor occupancy, waitlists, move-in velocity and accepted rates.
Local variation and address checks
Local rules are shown only to prove the range. They do not create the statewide Base case. The three rent observations are active commercial-listing averages observed Aug. 28, 2026; they are not assisted-living leases, and the mix of property types differs among markets.
| Example jurisdiction | Local operating / occupancy check | Active commercial avg. ask | Planning implication |
|---|---|---|---|
| Seattle | General business license tax certificate; land-use/use review; certificate of occupancy and final approvals as applicable. | $38/SF/yr | 2026 license fee schedule; listing average. Higher local costs must not be generalized statewide. |
| Spokane | $131 regular business registration; certificate of occupancy required before use and coordinated with final inspections. | $19/SF/yr | Registration; occupancy; listing average. |
| Yakima | City business license required for businesses located or operating in city limits; permit and licensing fees changed in 2026. | $16/SF/yr | Local license page; listing average. Confirm zoning, building, fire, health and utility requirements at the exact parcel. |
Sensitivity and risk
Three variables can erase the Base case quickly
The critical sensitivities are occupancy, payroll coverage and realized rate. Track them weekly during lease-up and monthly after stabilization.
Base margin disappears near 76.2% passive occupancy. Early-warning KPI: occupied beds, inquiries-to-tours, tours-to-deposits, move-outs and 30/60/90-day pipeline. A three-resident shortfall from Base is financially material.
Baseline 24/7 coverage is step-fixed while higher-acuity residents add variable labor. Early-warning KPI: care hours per resident-day, overtime, agency hours, call-offs and loaded labor cost per occupied resident-month.
The Base rate is only $250 above the published 2025 statewide median after a modest 2026 planning uplift. Early-warning KPI: net earned rate by care tier, concessions, credits, bad debt and share of residents below underwriting rate.
Build-out is the largest pre-opening uncertainty. The $520,000 Typical allowance equals $32.50 per gross square foot for an existing care-compatible shell; it does not cover ground-up construction or major structural, sprinkler, elevator or utility replacement. Obtain code review, contractor pricing and a landlord work letter before the lease becomes noncontingent.
Insurance also requires a quote. State rules set coverage limits, not premiums. The Base model's $4,500 monthly allowance and $20,000 startup binder/deposit are planning assumptions; replace them with a broker proposal for the actual exposures.
Sources and method
What is observed, official, derived and still uncertain
Research was reviewed Aug. 28, 2026, with outputs in 2026 planning dollars. Official fees and rules come from issuing authorities; pricing and supply use the cited periods. Construction, insurance, ramp and staffing mix remain modeled assumptions requiring address-level quotes.
| Source / publisher | Geography / period | Evidence type | How used / limitation |
|---|---|---|---|
| DSHS ALF 2026-014 + WAC 388-78A-3230 | Washington; effective July 1, 2026 | Official fee / rule – High | $381 annual fee per licensed bed; 24-bed total derived. |
| DSHS license application rule + staffing rule | Washington; current rules | Official rule – High | 90-day filing floor and staffing obligations; 9 – 15 months is modeled. |
| WA DOH Construction Review Services | Washington; current | Official fee schedule – High | Project-specific plan-review fee method; not a construction-cost benchmark. |
| CareScout 2025 Cost of Care Survey | Washington; survey Jul. – Nov. 2025 | Published benchmark – Moderate | $7,600 private one-bedroom median; Base models $7,850 for 2026. |
| DSHS 2026 ALF rule analysis + LTSS workforce report | Washington; 2025 – 2026 | Reported government data – High | Facility/bed supply and memory-care change; counts vary by snapshot date. |
| U.S. Census Bureau QuickFacts | Washington; 2025 estimate | Reported government data – High | Population and 65+ share; demand proxies only. |
| WA L&I minimum wage + workers' compensation rates | Washington; 2026 | Official wage floor / rate – High | $17.13 wage floor and class 6509 $0.8789/hour base rate. |
| WA Employment Security Department OEWS | Washington; 2026 publication using spring 2024 survey | Reported government data – High | Occupation-wage benchmarks; ALF staffing mix remains modeled. |
| WA Secretary of State + WA Department of Revenue | Washington; current 2026 pages | Official fees / tax rule – High | $180 LLC filing, $70 annual report, 0.275% ALF B&O rate. |
| DSHS food sanitation rule + WA Retail Food Code | Washington; current code framework | Official rule – High | Kitchen compliance; local permit fees remain jurisdiction-specific. |
| LoopNet state planning basket | Three Washington markets; observed Aug. 28, 2026 | Observed market quote family – Low | $38/$19/$16 listing averages; median $19 plus disclosed suitability/CAM load. |
| Local-government examples | Three Washington jurisdictions; 2026 | Official local rules – High locally | Shows local licensing, occupancy, zoning and fee variation; not statewide law. |
Confidence is highest for official fees, licensing rules, the wage floor, workers' compensation rates and tax classification; the consumer-price survey is a benchmark, not a provider revenue series. Build-out, insurance, rent uplift, staffing mix and occupancy ramp remain model-dependent. Replace them with site-specific bids, quotes, recruiting tests, permit checks and competitor/referral research before committing capital. This is a planning model, not legal, tax, architectural or clinical advice.