The Business: Can all those gray hairs possibly pay off? Absolutely, if you stop worrying about yours and start worrying about other people's instead. Consider this 45-bed nursing home, whose selling points include comprehensive care, an appealing location in an upscale suburb, and a home state that the owner says is noted for its high level of regulated patient fees and tight control of new-facility licenses. With nearly 12,000 square feet of space, this home offers rooms ranging from singles to quads. Prices average $94.31 per day for Medicaid patients (the vast majority) and $102 per day for private patients. The current owner has retired, but the 60 or so staffers shouldn't check out on you anytime soon.

Price: $1.4 million

Outlook: The aging of America has turned elder care into a robust business, so nursing homes have become popular consolidation plays. Although this 65-year-old facility shows its own signs of maturity (with its smallish rooms and renovated, but still dated, infrastructure), it has plenty of growth potential, including the possibility of expanding to accommodate 14 new beds. If you want to push growth further by diversifying into related lines such as adult day care or home health care, you'll probably need to relocate because of restrictive zoning rules. But don't get scared off: the current owner says that state regulations might make it much easier to get started by buying an existing facility and then moving your patients, rather than by applying for a new license.

Price Rationale: At $1.4 million, this nursing home is priced so nicely that it could practically drag someone out of retirement. Here's why: A recent appraisal valued this facility's buildings and land at more than $900,000; its total replacement cost is estimated at nearly $1.5 million. Subtract the real estate, and the business itself is basically priced at $500,000--roughly two times recast earnings. Why so low? The aging facility and potential complications from the state licensing board and zoning regulators have made the seller realize he needs to be flexible. So act quickly. This price could rise rapidly if large consolidators become interested.

Pros: With rates regulated by a generous state and a customer base that will continue to grow, you'll never turn gray worrying about future business.

Cons: On the other hand, all those state nursing-home regulations--and the all-too-predictable cash-flow delays from Medicaid--could put you under. --Jill Andresky Fraser

Gross Revenues Recast Earnings*
1995 $1,373,875 $199,613
1996 $1,449,399 $233,332
1997 $1,451,903 $259,654

*Before interest, taxes, depreciation, and owner's compensation.

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Marc Dosik, VR Business Brokers, at 410-772-0006.