CLHF Micro-Facility Conversion

Anaheim, Orange County, CA

Investment thesis

Conversion of a residential property into a small six-bed Congregate Living Health Facility (CLHF) - a higher-acuity, CDPH-licensed care setting. CLHF supply is constrained, and a successful conversion can command stronger rent coverage than a standard RCFE, at correspondingly higher execution complexity.

Property overview

2,400 sq ft home identified for conversion to a six-bed CLHF. Pre-buildout: plans are being finalized and the CDPH licensing pathway is being scoped. Buildout has not yet begun.

Healthcare use case

A CLHF is a medical facility licensed by the California Department of Public Health that serves medically fragile or higher-acuity residents in a homelike setting - bridging the gap between an RCFE and a skilled nursing facility. Demand outstrips the limited licensed supply.

Operator / tenant

Clinical operator (in discussion)

CLHF requires a clinically capable operator. Operator selection and CDPH licensing are the central execution risks at this stage.

Stage 1 · Pre-Buildout

Stage 1 - Pre-buildout details

You are participating before the buildout is complete and before lease income exists. Higher target upside, higher execution risk.

Purchase price

$455,000

Estimated buildout cost

$215,000

Plan approval status

Plans in progress · CDPH licensing pathway being scoped

Projected post-buildout value

$1,010,000

Expected tenant rent

$13,500 / mo

Expected stabilization

~14–18 months from buildout start

Target investor return

18%–24% target IRR (illustrative)

Key risks

Construction / buildout

CLHF buildout is more clinical and costly than an RCFE; overruns and delays are a heightened risk.

Licensing

CDPH CLHF licensing is more involved than RCFE licensing and can be slow or uncertain.

Tenant placement

A clinically qualified CLHF operator must be placed; the operator pool is smaller than for RCFEs.

Timeline

Longer entitlement, construction, and licensing timelines increase the risk of schedule slippage.

Financing

Higher project cost increases sensitivity to financing terms and availability.

Reimbursement / regulatory

CLHF economics can depend on waiver programs and clinical reimbursement that are subject to change.

This is a prototype using fictional data. Nothing here is an offer to sell or a solicitation of an offer to buy any security, and no money can be invested. Targeted returns are illustrative, not guaranteed, and actual results may differ materially.