Your AFH Exit Plan: Start Now, Not Later

Why Every Adult Family Home Owner Needs a Plan — Even If You’re Not Retiring Yet

You’ve spent years building your Adult Family Home (AFH) with care — managing inspections, caring for residents, hiring staff, and navigating licensing renewals.

But here’s a question too many owners avoid until it’s too late:

👉 What’s your exit plan?

Whether you plan to retire in 2 years or 10, the time to prepare your AFH for sale or succession is now — not later.

The way you plan your exit will determine how much you walk away with, how smooth the transition is, and whether your years of hard work truly pay off.

What Is an AFH Exit Plan — and Why Does It Matter?

An exit plan is your strategy for how you’ll transition out of your AFH when the time comes. That could mean:

• Retiring and selling your business

• Leasing the home to another provider

• Transferring ownership to a family member or caregiver

• Or even closing down operations with confidence

Without a clear plan, you risk:

• Losing potential income from your AFH sale

• Facing unexpected tax bills or capital gains

• Struggling to meet lender or buyer requirements

• Leaving staff and residents in limbo

3 Reasons to Start Planning Early

1️⃣ Your AFH Is Likely Your Largest Asset

Your AFH business likely holds hundreds of thousands of dollars in combined value — between the home, the license, resident contracts, and goodwill. But you can only unlock that full value if your finances and documentation are in order.

2️⃣ Lenders Require Clean, Organized Financials

Buyers and their lenders will ask for:

• Rent rolls

• Debt schedules

• Recent tax returns

• Up-to-date Profit & Loss and Balance Sheet reports

If your books are not organized, it can take 12–24 months to clean up and prepare for a successful sale. That’s why working with an AFH accounting and tax professional early in the process is key.

3️⃣ You Have More Options When You Plan Ahead

Should you sell the AFH and lease the home? Sell both the property and business together? Transfer ownership to your child or a trusted caregiver?

Each path has tax, legal, and financial implications. Early planning allows you to compare your options, minimize taxes, and create the outcome that best fits your personal and financial goals.

What Your AFH Exit Plan Should Include

A well-crafted AFH exit plan should outline:

• Your target retirement or transition timeline

• Business valuation (what your AFH is worth today)

• Clean financial statements for the last 2–3 years

• Property and lease structure (own vs. rent vs. lease-to-buy)

• Successor or buyer plan (family, employee, or external sale)

• Tax strategy to reduce capital gains and recapture taxes

When I work with clients buying or selling an AFH, I act as their financial support person — working closely with lenders, brokers, and escrow officers to ensure every financial document aligns with the buyer’s loan requirements.

That includes:

✅ Rent rolls and income verification

✅ Debt schedules and payment history

✅ Historical Profit & Loss statements

✅ Tax returns with reconciled bookkeeping

Don’t Wait for Burnout or Crisis

Too many AFH owners delay planning until they’re overwhelmed, burned out, or facing a personal emergency. At that point, they often walk away with less than their business is worth — or lose the opportunity to sell altogether.

Even if you’re not ready to sell, starting your plan now protects your investment and gives you options. You’ll be able to:

• Identify your AFH’s true market value

• Strengthen your financial position

• Prepare for future buyers or successors

• Reduce stress when the time comes to exit

✅ Your Next Steps

Here’s how to begin preparing your AFH exit plan today:

1. Schedule a financial review – Are your books up to date and showing consistent profit?

2. Organize business documents – Gather licenses, contracts, tax returns, and financials.

3. Set a target timeline – 1 year? 3 years? 5 years?

4. Meet with an AFH accountant and tax advisor – Build a customized financial roadmap that meets lender and IRS requirements.

5. Discuss your goals with family or staff – If you plan to transfer ownership, get everyone on the same page early.

Final Thought

You’ve spent years building your Adult Family Home — serving residents, supporting staff, and creating stability for your family. Don’t let that legacy fade because you didn’t have a plan.

Whether you intend to sell, transfer, or step away someday, it all starts with one decision:

👉 Start your AFH exit plan now.

At Acuity Tax Group, we work alongside AFH owners and their lenders to make sure every financial requirement — from tax returns to debt schedules — is accurate, compliant, and ready for your next chapter.

📅 Schedule a free 15-minute consultation to get started call 564.888.1687.

Let’s create a step-by-step strategy that protects your AFH legacy and gives you peace of mind for years to come.