Page 7 - Gracecare Homes Brochure

Licensing &
Oper ations
Our manager currently has a tier four residential facility operational. A tier
four license is very complex and difficult to obtain due to the vast experience in health care necessary to receive approval. The manager recognized the impor- tance of obtaining the most complex license from day one so that we have the flexibility of opening a tier one, two, three or four facility in the acquired prop- erties. There are numerous calculations that are taken into consideration when determining the reimbursement rate that the facility will receive for each new resident. Tier one and two facilities are designed two residents per room with
a payment rate of $1,069.37 per month tier one and $2,873 per month tier two. An individual plan is then created for each resident to determine the appro- priate level of additional care necessary for the resident to be as productive as possible and maintain an acceptable standard of living. This fee called a resi- dential habilitation fee is available to all tiers of residents and is $6.75 per fifteen minutes. These services require prior approval from Department of Health and Children Services (DHCS) and provides for addition appropriate assistance in acquiring, retaining, and improving the self-help, socialization, and adaptive skills as needed by the resident. DHCS structure is currently designed for tier one residents to receive one hour per day of these additional services giving an average cost per resident of $9,855 per year for these services. DHCS accounts for a twenty percent increase per tier. The baseline rate per month for tier three is $3,783, tier four is $6,182 and tier five is $7,912. In addition to the residen- tial habilitation services fee for the tier three and four residents the facility also receives an augmented plan of care rate. This is for time spent assessing and identifying a residents functional and dysfunctional behaviors, creating a plan for staff to modify dysfunctional behaviors monitor the effectiveness of the plan, and modify the plan if necessary. The rate for these services are $11.36 per fifteen minutes of service.
The manager will determine which tier of services will be offered in newly acquired facilities. There are numerous factors taken into consideration, it is our intent to diversify our holdings so that we own homes across the tiers in proportion to the percentage of placements made by the state. Currently the five year average of placement has been 20% tier one, 34% tier two, 19% tier three, 27% tier four and less than 1% tier five.
As a functional example, our current acquisition target is a tier two facility. The asking price of the property is $750,000 for the home and $400,000 for the business. The current owners are selling this home to obtain the funds necessary for the purchase of a building to open an adult day care facility. The current gross income of the property is $27,000 a month. They’re currently operating with vacancies and if the facility were 100% occupied at their average rate per client it would produce approximately $38,000 per month gross. The average facility is showing a net profit of 60% of gross. At their current occu- pancy rate and paying the full asking price for this acquisition it would show an ROI of 16.9% per year.
10,000 shares of class B Mem- bership invest (The “Shares”) at a price of $1000 per share
Gracecare Homes investment objective is always to provide a potentially high rate of re- turn through significant long-term capital appreciation, or a combination of competitive current income and long-term capital appreciation
OFFERING HIGHLIGHTS
Minimum Investment for Indi- vidual investors is twenty shares ($20,000)
Minimum Investment for insti- tutional investors is one hun- dred shares ($100,000)
INVESTOR SUITABILITY
Subscriptions will be accepted only from individual “Accredited Investors” or from “Institutional Investors.”
Gracecare Medical Holdings LLC., will act as Manager and make all business decisions on behalf of the company. *Gracecare Medical Holdings LLC., also manages Gracecare mobile response and United Mobile Response California limited liability companies, which are both operational non-emergency medical trans- portation companies. Gracecare Medical Holdings LLC., also owns two residential care facili- ties in the Los Angeles, CA area. As of date of this memorandum, one of the aforementioned resi- dential facilities is licensed and in operation, and the remaining facility is currently awaiting renovation and licensing
MANAGER