The fire marshal decides between six beds and ten either way

Before the fire marshal, the zoning gate. A lot of states have statutory protections that require municipalities to treat small group homes as a residential use up to some resident count, and above that count you're in a conditional use hearing with neighbors in the room. Some of those same statutes carry spacing rules, so many feet between licensed homes, which rules out addresses that otherwise look perfect. Nothing warns you in advance either, you find out from a rejection letter.

Pull the actual ordinance text for both parcels and check the state statute it has to comply with. If House B is over the protected count in your state, your Friday deadline is meaningless because the hearing calendar sets your timeline, not you.

The sprinkler quote spread you got is hiding the real number. Ask specifically who pays for the water service upsize and the meter, and whether the municipality charges a capacity or tap fee on the larger service. On a conversion I scoped, the sprinkler contractor's number was 38k and the water district's side of it added 19k that nobody mentioned until we applied. Also ask if a backflow assembly and an annual inspection contract are in the price.

And on the split level, a platform lift at 22k installed is a number for the lift. It is not the number for cutting a landing, pouring it, moving the electrical panel that is always exactly where the landing needs to go, and re-framing the door head.

I'd ask what each house is worth the day the license goes away. House A with 62k of work is still a four bedroom ranch somebody's family would buy. House B with sprinklers, a lift, commercial-grade egress and ten small bedrooms is a purpose-built facility in a residential neighborhood, and the buyer pool for that is other operators. That's a thinner market and it prices like one.

I hold things for a long time, so I care more about the floor than the ceiling. The 6 bed has a floor.

Staffing is where 6 and 10 stop being comparable, and it doesn't go the way people expect. Six residents with moderate needs still needs someone awake overnight in most states, so you're already paying for 24 hour coverage against six rent checks. Ten residents spreads that same overnight cost across four more payers. That's the whole argument for the bigger house.

What the bigger house also buys you is a real schedule with call-offs, overtime, and a person whose job is filling shifts. At six beds you are that person, at ten you are paying somebody 52k to 68k to be that person or you are working every gap yourself. Budget the manager on day one either way, otherwise the House B pro forma is fiction. Parcel is right that the hearing calendar decides your date, orchard is right about resale, and both of those are more binding than the code question.

Which state? The answer changes completely and half the replies here are guessing at your rules.

Also, have you had an actual pre-application conversation with the licensing agency about both addresses, or only the building department? Two calls and a 2019 PDF is not enough to spend 610k against. Most agencies will do a consultation, some will do a walkthrough before you own the building, and if there's a rule change pending they're the only people who can tell you what tier the new draft puts 10 beds in.

Adding to quill, can you order a pre-license inspection or a code review as a contingency inside the contract period, and who pays if the seller has to let inspectors in? That's the version of this I'd try. Extend the option period, pay for the review, and let the report tell you which house to release rather than Friday telling you.

What's the extension cost? If it's 5k of hard money to avoid a 145k surprise I'd take that trade every time. If the seller won't extend, that's information too.

The "occupancy group" part is what I keep tripping over. Does that just mean the building code stops treating the house as a house? And if so, is that automatic at a resident count or is it someone's judgment call?

@juniper it's the code's category for what a building is used for. A single family house sits in the residential category, a facility where people who can't self-evacuate sleep sits in an institutional one, and the trigger is usually a mix of resident count and how much help residents need to get out of the building. Which means it's partly a count and partly an evaluator's judgment about your residents, and it varies by state and by adopted code year.

Halyard, the thing that broke for me going from one property to a small group wasn't code, it was that the second building doubled the number of people I had to supervise while adding no supervisory capacity. Ten beds in one house is one roof, one schedule, one manager. That's cleaner than two 6 bed houses ever gets. If the code number comes back under 120k I'd take House B on that basis alone.