AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 23, 2004
                                                      REGISTRATION NO. 333-08415
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                        POST-EFFECTIVE AMENDMENT NO. 1 TO

                                    FORM S-3

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                        OMEGA HEALTHCARE INVESTORS, INC.
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             (Exact Name of Registrant as Specified in Its Charter)

                                    MARYLAND
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         (State or Other Jurisdiction of Incorporation or Organization)

                                   38-3041398
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                     (I.R.S. Employer Identification Number)

                          9690 Deereco Road, Suite 100
                            Timonium, Maryland 21093
                                 (410) 427-1700
--------------------------------------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
 of Registrant's Principal Executive Offices)

                                C. Taylor Pickett
                             Chief Executive Officer
                        Omega Healthcare Investors, Inc.
                          9690 Deereco Road, Suite 100
                            Timonium, Maryland 21093
                                 (410) 427-1700
--------------------------------------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
 of Agent for Service)

                                  with copy to:
                             Eliot W. Robinson, Esq.
                            Michael J. Delaney, Esq.
                              Powell Goldstein LLP
                               One Atlantic Center
                                   Suite 1400
                        1201 West Peachtree Street, N.W.
                             Atlanta, Georgia 30309
                                 (404) 572-6600

     Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

     If the only  securities  being  registered  on this Form are being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. |_|




     If any of the securities being registered on this Form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plan, check the following box. |X|
                                             -

     If this Form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering. |_|

     If this Form is a post-effective amendment filed pursuant to Section 462(c)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering. |_|

     If delivery of the  prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|




                         CALCULATION OF REGISTRATION FEE

======================================   =================   ======================== ===================== =======================
          Title of Each Class                Amount to Be        Proposed Maximum         Proposed Maximum   Amount of Registration
    of Securities to Be Registered            Registered      Offering Price Per Unit    Aggregate Offering          Fee
                                                                                              Price
======================================   =================   ======================== ===================== =======================
                                                                                                          
Common Stock, par value $.10 per share         N/A (1)               N/A (1)                 N/A (1)                 N/A (1)
======================================   =================   ======================== ===================== =======================



(1)  A registration  fee of $19,483 was paid in connection with the Registration
     Statement No. 333-08415 on Form S-3 of Omega Healthcare Investors,  Inc., a
     Delaware  corporation (the "Registrant"),  as filed with the Securities and
     Exchange  Commission July 19, 1996. Of the 2,000,000 shares of Common Stock
     originally  registered  pursuant to Registration  Statement No.  333-08415,
     1,650,466 shares remain unsold.



PROSPECTUS

                        OMEGA HEALTHCARE INVESTORS, INC.
                                2,000,000 SHARES

                                  COMMON STOCK
                            Par Value $.10 Per Share

              DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN

                          ----------------------------

     We  hereby  offer  participation  in  our  enhanced  and  updated  Dividend
Reinvestment  and Common Stock  Purchase  Plan,  or the Plan.  The Plan is being
administered by EquiServe Trust Company,  N.A., or the administrator.  To enroll
in the Plan, a participant must complete and return an Enrollment  Authorization
Form to the  administrator.  Our  common  stock is listed on the New York  Stock
Exchange,  or the NYSE,  under the symbol  "OHI." On November 22, 2004, the last
reported  sale price of our common  stock on the NYSE was $12.06 per share.  Our
principal  executive  offices  are  located  at 9690  Deereco  Road,  Suite 100,
Timonium, Maryland 21093, and our telephone number is (410) 427-1700.

     Some of the significant features of the Plan include:

     o    If you are an existing stockholder, you may purchase additional shares
          of common stock by  automatically  reinvesting  all or any part of the
          cash  dividends  paid on your shares of our common stock.  There is no
          minimum  or maximum  limitation  on the  amount of  dividends  you may
          reinvest in the Plan.

     o    If you are an existing stockholder, you may purchase additional shares
          of common stock by making  optional cash  purchases of between $50 and
          $6,250 in any  calendar  month,  for an  annual  maximum  of  $75,000.
          Optional cash  purchases of our common stock in excess of this maximum
          may only be made pursuant to a written request for waiver and with our
          prior written consent.

     o    If you are not an existing  stockholder,  you may make an initial cash
          purchase  of common  stock of at least  $250 with a maximum of $6,250.
          Initial  optional cash purchases of our common stock in excess of this
          maximum may only be made pursuant to a written  request for waiver and
          with our prior written consent.

     o    We may sell newly  issued  shares  directly  to the  administrator  or
          instruct the  administrator  to purchase  shares in the open market or
          privately  negotiated  transactions,  or elect a combination  of these
          alternatives.

     o    You can purchase  shares of our common stock without  brokerage  fees,
          commissions  or  charges.  We will bear the  expenses  for open market
          purchases.

     o    The purchase  price for newly issued shares of common stock  purchased
          directly from us will be the market price less a discount ranging from
          0% to 5%,  determined  from time to time by us in accordance  with the
          terms of the Plan.  This  discount  applies  to either  optional  cash
          purchases  or  reinvested  dividends.  However,  no  discount  will be
          available  for  common  stock  purchased  in  the  open  market  or in
          privately negotiated transactions.



     o    Beneficial owners  (stockholders  whose shares of our common stock are
          registered in a name other than his or her name;  for example,  in the
          name of a broker,  bank or  nominee)  may  participate  in the Plan by
          instructing their brokers, banks or nominees to reinvest dividends and
          make optional cash purchases on their behalf.

     o    You may also make automatic monthly investments by authorizing monthly
          automatic  deductions from your designated U.S. bank account.  You may
          make automatic  deductions  for as little as $50 per month,  after the
          initial investment, but in no case for more than $6,250 per month.

     Participation in the Plan is entirely voluntary, and you may terminate your
participation  at any time. Once enrolled,  your  participation in the Plan will
continue  unless you  affirmatively  withdraw from the Plan. You may also change
your dividend election at any time. Those holders of our common stock who do not
wish to  participate  in the Plan will continue to receive cash dividends in the
usual manner.

                          ----------------------------

     Investing  in our common  stock  involves  risks that are  described in the
section entitled "Risk Factors" beginning on page 5 of this prospectus.

                          ----------------------------

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

                          ----------------------------

                The date of this prospectus is November 23, 2004.

                                      -2-


     You should rely only on the information provided in this prospectus and the
information  incorporated by reference. We have not authorized anyone to provide
you with different  information.  You should not assume that the  information in
this prospectus or in the documents  incorporated by reference is accurate as of
any date other than the date on the front of this prospectus or those documents,
as applicable.

                                     SUMMARY

     The  following  summary  may not contain  all the  information  that may be
important  to you.  You should  read the  entire  prospectus  and the  documents
incorporated  by reference in the prospectus  before making a decision to invest
in our common stock.

     All  references  to "you" in this  prospectus  refer to those  persons  who
invest in the securities being offered by this prospectus, and all references to
"we," "us" and "our" in this  prospectus  refer to Omega  Healthcare  Investors,
Inc., a Maryland corporation, and its subsidiaries.

                           FORWARD-LOOKING INFORMATION

     We make  statements  about our business in our filings with the  Securities
and  Exchange  Commission,  or the SEC,  that are  "forward-looking"  within the
meaning  of  Section  27A of the  Securities  Act of 1933,  as  amended,  or the
Securities  Act,  and Section 21E of the  Securities  Exchange  Act of 1934,  as
amended, or the Exchange Act, and which are subject to the "safe harbor" created
by those  sections.  Forward-looking  statements  include,  among other  things:
expressions of the "belief,"  "anticipation,"  or  "expectations" of management,
statements as to industry  trends or future results of operations of our company
and its  subsidiaries,  and  other  statements  that  are not  historical  fact.
Forward-looking  statements  are based on various  assumptions by management and
are subject to risks and uncertainties that could cause actual results to differ
materially  from those in the  forward-looking  statements.  Among the risks and
uncertainties which can affect our future performance are:

     o    competitive pressures;

     o    uncertainties  relating to the business operations of the operators of
          our assets,  including those relating to  reimbursement by third-party
          payors, regulatory matters and occupancy levels;

     o    the ability of any operators in bankruptcy to reject  unexpired  lease
          obligations,  modify the terms of our mortgages and impede our ability
          to collect unpaid rent or interest  during the process of a bankruptcy
          proceeding and retain security deposits for the debtor's obligations;

     o    our ability to sell closed  assets on a timely basis and on terms that
          allow us to realize the carrying value of these assets;

     o    our  ability  to  negotiate,   if  and  when  necessary,   appropriate
          modifications to the terms of our credit facility;

     o    our  ability  to  manage,  re-lease  or sell any  owned  and  operated
          facilities;

                                      -3-


     o    the availability and cost of capital;

     o    competition in the financing of healthcare facilities;

     o    regulatory and other changes in the healthcare sector;

     o    the effect of  economic  and market  conditions  generally  and in the
          healthcare industry particularly;

     o    changes in interest rates;

     o    the amount and yield of any additional investments;

     o    changes in tax laws and regulations  affecting real estate  investment
          trusts;

     o    changes in the ratings of our debt and preferred securities;

     o    legal and  regulatory  proceedings,  including  the  impact of ongoing
          litigation;

     o    extraordinary items;

     o    the ability to recruit and replace key personnel; and

     o    the impact of existing, modified, or new strategic initiatives.

     These and other risks and  uncertainties are described in our annual report
to stockholders included in our annual report on Form 10-K, quarterly reports on
Form 10-Q and current  reports on Form 8-K.  Readers are  cautioned not to place
undue  reliance on any  forward-looking  statement,  which speaks only as of the
date thereof,  and are urged to read carefully all of these risk factors and the
risks  described  in the section  entitled  "Risk  Factors"  beginning on page 5
below. We undertake no obligation to update any forward-looking statements.

                                   THE COMPANY

     We were  incorporated  in the State of Maryland on March 31, 1992. We are a
self-administered   real  estate  investment   trust,  or  REIT,   investing  in
income-producing  healthcare  facilities,  principally long-term care facilities
located  in the  United  States.  We  provide  lease or  mortgage  financing  to
qualified  operators  of skilled  nursing  facilities  and, to a lesser  extent,
assisted  living  and  acute  care  facilities.  We have  historically  financed
investments  through borrowings under our revolving credit  facilities,  private
placements or public offerings of debt or equity  securities,  the assumption of
secured indebtedness, or a combination of these methods.

     As of September  30, 2004,  our portfolio of  investments  consisted of 208
healthcare  facilities,  located in 29 states  and  operated  by 39  third-party
operators.  Our gross  investment in these  facilities,  net of impairments  and
before reserve for uncollectible  loans, totaled $843.3 million at September 30,
2004,  with  97.2% of our real  estate  investments  related to  long-term  care
facilities. This portfolio is made up of 157 long-term healthcare facilities and
two  rehabilitation  hospitals  owned and  leased to third  parties,  fixed rate
mortgages on 46 long-term  healthcare  facilities and three long-term healthcare
facilities  that were  recovered  from  customers and are currently  closed.  At
September  30,  2004,  we also held other  investments  of  approximately  $34.4
million, including $21.7 million of notes receivable, net of allowance.

                                      -4-


                                  RISK FACTORS

     Before  you decide to  participate  in the Plan and invest in shares of our
common stock, you should be aware of the following material risks in making such
an investment.  You should  carefully  consider the risks described below before
you decide to participate  in the Plan and purchase  shares of our common stock.
In addition,  you should  consult your own financial and legal  advisors  before
making any investment decisions.

Risks Associated with the Plan

     You will not know the price of the shares you are purchasing under the Plan
at the time you  authorize  the  investment  or  elect  to have  your  dividends
reinvested.

     The  price of our  shares  may  fluctuate  between  the time you  decide to
purchase  shares  under the Plan and the time of actual  purchase.  In addition,
during this time period,  you may become aware of  additional  information  that
might affect your investment decision.

     If you instruct the  administrator  to sell shares under the Plan, you will
not be able to direct the time or price at which your shares are sold. The price
of our shares may  decline  between  the time you decide to sell  shares and the
time of actual sale.

Risks Associated with Our Company

     Generally speaking,  the risks facing our company fall into two categories:
(i) risks related to the operations of our  operators,  and (ii) risks unique to
our company and operations.  These risks and uncertainties are not the only ones
facing us and there may be additional  matters that we are unaware of or that we
currently consider immaterial. All of these could adversely affect our business,
financial  condition,  results of  operations  and cash flows  and,  thus,  your
investment in our company.

         Risks Related to the Operators of Our Facilities

Our recent efforts to restructure and stabilize our portfolio may not prove to 
be successful.
        
     In large part as a result of the 1997 changes in Medicare  reimbursement of
services provided by skilled nursing  facilities and reimbursement  cuts imposed
under state  Medicaid  programs,  a number of operators of our  properties  have
encountered significant financial difficulties during the last several years. In
1999,  our  investment  portfolio  consisted of 216  properties  and our largest
public  operators  (by  investment)  were Sun  Healthcare  Group,  Inc., or Sun,
Integrated  Health  Services,  or IHS,  Advocat,  Inc., or Advocat,  and Mariner
Health Care, Inc., or Mariner.  Some of these operators,  including Sun, IHS and
Mariner,  subsequently filed for bankruptcy protection. Our other operators were
required to undertake  significant  restructuring  efforts. We have restructured
our arrangements with many of our operators  whereby we have renegotiated  lease
and mortgage terms, re-leased properties to new operators and have closed and/or
disposed of properties.


                                      -5-


     We  continue  to have  ongoing  restructuring  discussions  with  Claremont
regarding two  facilities  Claremont  currently  leases from us. We might not be
successful in reaching a definitive agreement with Claremont.  We are also aware
of  four  properties  in  our  portfolio  located  in  Illinois  where  facility
operations are currently  insufficient  to meet rental  payments due to us under
our leases for these  facilities.  These lease payments are currently being paid
by the lessee from funds other than those  generated  by the  facilities.  It is
possible  that we will need to take  steps to  restructure  this  portion of our
portfolio  or other  properties  in our  portfolio  with  respect  to which  our
operators encounter financial  difficulty.  We cannot assure you that our recent
efforts to restructure and stabilize our property portfolio will be successful.

The bankruptcy, insolvency or financial deterioration of our operators could
delay our ability to collect unpaid rents or require us to find new operators 
for rejected facilities.
        
     We are exposed to the risk that our operators may not be able to meet their
obligations,  which may result in their  bankruptcy or insolvency.  Although our
leases and loans provide us with the right to terminate an investment,  evict an
operator,  demand  immediate  repayment and other remedies,  the bankruptcy laws
afford certain  protections  to a party that has filed for  bankruptcy  that may
render these remedies unenforceable.  In addition, an operator in bankruptcy may
be able to  restrict  our ability to collect  unpaid  rent or mortgage  payments
during the bankruptcy case.
        
     When one of our lessees seeks bankruptcy protection, Title 11 of the United
States Code, or the Bankruptcy Code, provides that a trustee in a liquidation or
reorganization  case under the Bankruptcy Code, or a  debtor-in-possession  in a
reorganization  case  under the  Bankruptcy  Code,  has the  option to assume or
reject the unexpired lease  obligations of a debtor-lessee.  However,  our lease
arrangements  with  operators  who operate more than one of our  facilities  are
generally made pursuant to a single master lease covering all of that operator's
facilities  leased from us.  Subject to certain  restrictions,  a  debtor-lessee
under a master lease agreement would generally be required to assume or reject a
master   lease   as  a  whole,   rather   than   making   the   decision   on  a
facility-by-facility  basis,  thereby preventing the debtor-lessee from assuming
only the better  performing  facilities and terminating the leasing  arrangement
with respect to the poorer performing  facilities.  Whether or not a court would
require a master  lease  agreement  to be assumed or  rejected  as a whole would
depend on a number of factors,  including  applicable  state law,  the  parties'
intent,  whether the master lease agreement and related  documents were executed
contemporaneously,  the nature and purpose of the  relevant  documents,  whether
there was separate and distinct consideration for each lease, and the provisions
contained in the relevant  documents,  including whether the relevant  documents
are  interrelated  and  contain  ample  cross-references.  Therefore,  it is not
possible to predict how a bankruptcy court would decide this issue.

o    Assumption of Leases. In the event that an unexpired lease is assumed by or
     on behalf of the debtor-lessee,  any defaults,  other than those created by
     the  financial  condition of the  debtor-lessee,  the  commencement  of its
     bankruptcy case or the appointment of a trustee, would have to be cured and
     all the rental  obligations  thereunder  generally  would be  entitled to a
     priority over other unsecured claims.  Generally,  unexpired leases must be
     assumed in their  totality.  However,  a bankruptcy  court has the power to
     refuse to enforce  certain  provisions  of a lease,  such as  cross-default
     provisions or penalty provisions, that would otherwise prevent or limit the
     ability of a  debtor-lessee  from  assuming or assuming and  assigning  the
     unexpired lease to another party.

o    Rejection of Leases.  Generally, the debtor-lessee is required to make rent
     payments to us during its bankruptcy unless and until it rejects the lease.
     The rejection of a lease is deemed to be a pre-petition breach of the lease
     and the lessor will be allowed a pre-petition  general unsecured claim that


                                      -6-


     will be limited to any unpaid rent  already due plus an amount equal to the
     rent reserved under the lease, without acceleration, for the greater of (a)
     one year, or (b) fifteen  percent (15%),  not to exceed three years, of the
     remaining  term of such lease,  following  the earlier of (i) the  petition
     date, or (ii)  repossession or surrender of the leased  property.  Although
     the  amount of a lease  rejection  claim is subject  to the  statutory  cap
     described above, the lessor should receive the same percentage  recovery on
     account of its claim as other  holders of  allowed  pre-petition  unsecured
     claims receive from the bankruptcy estate. If the debtor-lessee rejects the
     lease,  the  facility  would be returned  to us. In that event,  if we were
     unable to re-lease the  facility to a new  operator on  favorable  terms or
     only after a significant delay, we could lose some or all of the associated
     revenue from that facility for an extended period of time.
        
     If an operator  defaults  under one of our mortgage  loans,  we may have to
foreclose  on the  mortgage or protect our  interest by  acquiring  title to the
property and thereafter making  substantial  improvements or repairs in order to
maximize the facility's investment potential.  Operators may contest enforcement
of  foreclosure  or other  remedies,  seek  bankruptcy  protection  against  our
exercise  of  enforcement  or other  remedies  and/or  bring  claims  for lender
liability in response to actions to enforce mortgage obligations. If an operator
seeks  bankruptcy  protection,  the automatic stay  provisions of the Bankruptcy
Code would preclude us from enforcing  foreclosure or other remedies against the
operator  unless relief is obtained from the court.  High "loan to value" ratios
or declines in the value of the facility may prevent us from realizing an amount
equal to our mortgage loan upon foreclosure.
        
     The receipt of liquidation  proceeds or the replacement of an operator that
has  defaulted  on its  lease  or loan  could be  delayed  by the  approval  and
licensure  process  of any  federal,  state or local  agency  necessary  for the
replacement of the previous  operator  licensed to manage the facility.  In some
instances,  we may take possession of a property and such action could expose us
to successor liabilities.  These events, if they were to occur, could reduce our
revenue and operating cash flow.

Operators that fail to comply with the requirements of  governmental 
reimbursement programs such as Medicare or Medicaid, licensing and certification
requirements, fraud and abuse regulations or new legislative developments may be
unable to meet their obligations to us.

     Our  operators  are subject to numerous  federal,  state and local laws and
regulations  that are subject to frequent  and  substantial  changes  (sometimes
applied  retroactively)  resulting  from  legislation,  adoption  of  rules  and
regulations,  and administrative  and judicial  interpretations of existing law.
The  ultimate  timing or  effect of these  changes  cannot be  predicted.  These
changes may have a dramatic effect on our operators' costs of doing business and
the amount of reimbursement by both government and other third-party payors. The
failure of any of our  operators  to comply  with these laws,  requirements  and
regulations  could adversely  affect their ability to meet their  obligations to
us. In particular:

o    Medicare  and  Medicaid.  A  significant  portion  of our  skilled  nursing
     facility   operators'   revenue  is  derived   from   governmentally-funded
     reimbursement  programs,  primarily  Medicare and Medicaid,  and failure to
     maintain  certification and accreditation in these programs would result in
     a  loss  of  funding  from  such  programs.   Loss  of   certification   or
     accreditation  could  cause  the  revenues  of our  operators  to  decline,
     potentially  jeopardizing their ability to meet their obligations to us. In
     that event,  our revenues  from those  facilities  could be reduced,  which
     could in turn cause the value of our affected properties to decline.  State
     licensing and Medicare and Medicaid laws also require  operators of nursing
     homes and assisted  living  facilities to comply with  extensive  standards


                                      -7-


     governing operations.  Federal and state agencies  administering those laws
     regularly inspect such facilities and investigate complaints. Our operators
     and their managers receive notices of potential sanctions and remedies from
     time to time,  and such  sanctions  have been  imposed from time to time on
     facilities  operated by them. If they are unable to cure deficiencies which
     have been identified or which are identified in the future,  such sanctions
     may be imposed  and,  if  imposed,  may  adversely  affect  our  operators'
     revenues,  potentially jeopardizing their ability to meet their obligations
     to us.

o    Licensing and  Certification.  Our operators and  facilities are subject to
     regulatory  and  licensing   requirements  of  federal,   state  and  local
     authorities  and are  periodically  audited by them to confirm  compliance.
     Failure  to obtain  licensure  or loss or  suspension  of  licensure  would
     prevent  a  facility   from   operating  or  result  in  a  suspension   of
     reimbursement  payments  until all licensure  issues have been resolved and
     the  necessary  licenses  obtained  or  reinstated.   Our  skilled  nursing
     facilities require governmental  approval,  in the form of a certificate of
     need that generally varies by state and is subject to change,  prior to the
     addition or  construction  of new beds, the addition of services or certain
     capital  expenditures.  Some of our  facilities  may be unable  to  satisfy
     current and future certificate of need requirements and may for this reason
     be unable to continue  operating in the future. In such event, our revenues
     from those facilities could be reduced or eliminated for an extended period
     of time.

o    Fraud and  Abuse  Regulations.  There are  various  extremely  complex  and
     largely  uninterpreted  federal  and state laws  governing  a wide array of
     referrals,   relationships   and  arrangements  and  prohibiting  fraud  by
     healthcare  providers,  including criminal  provisions that prohibit filing
     false claims or making false statements to receive payment or certification
     under Medicare and Medicaid,  or failing to refund overpayments or improper
     payments.  Governments are devoting  increasing  attention and resources to
     anti-fraud  initiatives against healthcare providers.  The Health Insurance
     Portability and  Accountability  Act of 1996 and the Balanced Budget Act of
     1997  expanded  the  penalties  for  healthcare  fraud,  including  broader
     provisions  for the  exclusion of providers  from the Medicare and Medicaid
     programs.  Furthermore,  the  Office  of  Inspector  General  of  the  U.S.
     Department of Health and Human Services,  in cooperation with other federal
     and state agencies, continues to focus on the activities of skilled nursing
     facilities in certain states in which we have properties.  In addition, the
     federal  False  Claims Act allows a private  individual  with  knowledge of
     fraud to bring a claim  on  behalf  of the  federal  government  and earn a
     percentage  of  the  federal  government's   recovery.   Because  of  these
     incentives,   these  so-called   "whistleblower"  suits  have  become  more
     frequent.  The  violation  of any of these  regulations  by an operator may
     result in the imposition of fines or other penalties that could  jeopardize
     that  operator's  ability to make lease or  mortgage  payments  to us or to
     continue operating its facility.

o    Legislative and Regulatory  Developments.  Each year, legislative proposals
     are introduced or proposed in Congress and in some state  legislatures that
     would affect major changes in the healthcare  system,  either nationally or
     at  the  state  level.  The  Medicare  Prescription  Drug  Improvement  and
     Modernization  Act of 2003,  Pub. L. 108-173,  which is one example of such
     legislation,  was enacted in late 2003. The Medicare  reimbursement changes
     for the skilled nursing  facility  industry under this law are limited to a
     temporary  increase  in  the  per  diem  amount  paid  to  skilled  nursing
     facilities for residents who have AIDS. The significant  expansion of other


                                      -8-


     Medicare benefits under this legislation, such as the expanded prescription
     drug benefit,  could result in financial  pressures on the Medicare program
     that might result in future legislative and regulatory changes with impacts
     for our operators.  Other proposals under consideration  include efforts by
     individual   states  to  control   costs  by  decreasing   state   Medicaid
     reimbursements;  a federal "Patient Protection Act" to protect consumers in
     managed care plans,  efforts to improve quality of care, report performance
     measures  relating  to quality and reduce  medical  errors  throughout  the
     healthcare industry;  and hospital  cost-containment  initiatives by public
     and private payors. We cannot accurately predict whether any proposals will
     be adopted or, if adopted,  what effect, if any, these proposals would have
     on operators and, thus, our business.

     Regulatory  proposals  and rules are released on an ongoing  basis that may
have a major impact on the healthcare  system  generally and the skilled nursing
and long-term care industries particularly.

Our operators depend on reimbursement from governmental and other third-party
payors and reimbursement rates from such payors may be reduced.

     Changes in the  reimbursement  rate or methods of payment from  third-party
payors,  including the Medicare and Medicaid programs,  or the implementation of
other measures to reduce  reimbursements  for services provided by our operators
has in the past, and could in the future,  result in a substantial  reduction in
our  operators'  revenues  and  operating  margins.  Additionally,  net  revenue
realizable under  third-party  payor agreements can change after examination and
retroactive  adjustment by payors during the claims settlement processes or as a
result of post-payment  audits.  Payors may disallow  requests for reimbursement
based on determinations that certain costs are not reimbursable or reasonable or
because  additional  documentation is necessary or because certain services were
not  covered or were not  medically  necessary.  There also  continue  to be new
legislative  and regulatory  proposals that could impose further  limitations on
government and private payments to healthcare  providers.  In some cases, states
have  enacted or are  considering  enacting  measures  designed to reduce  their
Medicaid  expenditures and to make changes to private healthcare  insurance.  We
cannot  assure  you that  adequate  reimbursement  levels  will  continue  to be
available for the services provided by our operators,  which are currently being
reimbursed by Medicare,  Medicaid or private third-party payors.  Further limits
on the scope of  services  reimbursed  and on  reimbursement  rates could have a
material  adverse effect on our operators'  liquidity,  financial  condition and
results of  operations,  which could  cause the  revenues  of our  operators  to
decline and potentially  jeopardize  their ability to meet their  obligations to
us.

Our operators may be subject to significant legal actions that could subject
them to increased operating costs and substantial uninsured liabilities, which
may affect their ability to pay their lease and mortgage payments to us.

     As is typical in the healthcare  industry,  our operators are often subject
to claims that their services have resulted in resident  injury or other adverse
effects.  Many of these  operators have  experienced an increasing  trend in the
frequency and severity of professional liability and general liability insurance
claims and litigation  asserted against them. The insurance coverage  maintained
by our  operators  may not cover all claims made against them nor continue to be
available at a reasonable  cost, if at all. In some states,  insurance  coverage
for the risk of punitive damages arising from professional liability and general
liability  claims and/or  litigation may not, in certain cases,  be available to
operators due to state law  prohibitions  or limitations of  availability.  As a
result,  our  operators  operating  in these  states may be liable for  punitive
damage  awards that are either not  covered or are in excess of their  insurance
policy limits.  We also believe that there has been, and will continue to be, an
increase  in   governmental   investigations   of  long-term   care   providers,
particularly  in the  area  of  Medicare/Medicaid  false  claims,  as well as an


                                      -9-


increase in enforcement actions resulting from these  investigations.  Insurance
is not  available to cover such  losses.  Any adverse  determination  in a legal
proceeding or governmental investigation,  whether currently asserted or arising
in the future,  could have a material adverse effect on an operator's  financial
condition. If an operator is unable to obtain or maintain insurance coverage, if
judgments  are obtained in excess of the insurance  coverage,  if an operator is
required to pay uninsured  punitive damages,  or if an operator is subject to an
uninsurable  government  enforcement  action,  the operator  could be exposed to
substantial additional liabilities.

Increased competition as well as increased operating costs have resulted in 
lower revenues for some of our operators and may affect the ability of our
tenants to meet their payment obligations to us.
        
     The healthcare  industry is highly  competitive  and we expect that it will
likely become more  competitive in the future.  Our operators are competing with
numerous other companies  providing similar healthcare  services or alternatives
such  as home  health  agencies,  life  care at  home,  community-based  service
programs,  retirement communities and convalescent centers. We cannot be certain
the  operators of all of our  facilities  will be able to achieve  occupancy and
rate levels that will  enable them to meet all of their  obligations  to us. Our
operators may  encounter  increased  competition  in the future that could limit
their  ability to attract  residents or expand their  businesses  and  therefore
affect their ability to pay their lease or mortgage payments.
        
     The market for qualified  nurses,  healthcare  professionals  and other key
personnel is highly competitive and our operators may experience difficulties in
attracting and retaining  qualified  personnel.  Increases in labor costs due to
higher  wages and greater  benefits  required  to attract  and retain  qualified
healthcare personnel incurred by our operators could affect their ability to pay
their lease or mortgage payments.  This situation could be particularly acute in
certain  states that have  enacted  legislation  establishing  minimum  staffing
requirements.

         Risks Unique to Our Company and Operations

     In addition to the operator  related  risks  discussed  above,  there are a
number of risks directly associated with our company and operations.


                                      -10-


We rely on external  sources of capital to fund future capital needs,  and if we
encounter  difficulty  in  obtaining  such  capital,  we may not be able to make
future investments necessary to grow our business or meet maturing commitments.
        
     In order to qualify as a REIT under the Internal  Revenue Code of 1986,  as
amended,  or the Internal Revenue Code, we are required,  among other things, to
distribute  each  year to our  stockholders  at least  90% of our  REIT  taxable
income.  Because of this distribution  requirement,  we may not be able to fund,
from cash retained from operations,  all future capital needs, including capital
needs to make investments and to satisfy or refinance maturing commitments. As a
result,  we rely on  external  sources  of  capital.  If we are unable to obtain
needed capital at all or only on unfavorable terms from these sources,  we might
not be able to make the investments needed to grow our business,  or to meet our
obligations and commitments as they mature,  which could  negatively  affect the
ratings of our debt and even,  in extreme  circumstances,  affect our ability to
continue operations. Our access to capital depends upon a number of factors over
which we have little or no  control,  including,  but not  limited  to,  general
market conditions,  the market's perception of our growth potential, our current
and potential  future earnings and cash  distributions,  and the market price of
the shares of our capital stock.  Generally  speaking,  difficult capital market
conditions  in our  industry  during  the  past  several  years  and our need to
stabilize  our  portfolio  have  limited  our access to capital.  Our  potential
capital sources include, but are not limited to, the following transactions:
        
     Equity Financing. As with other publicly-traded companies, the availability
of equity capital will depend,  in part, on the market price of our common stock
which,  in turn,  will depend upon various  market  conditions and other factors
that may change from time to time including:

     o    the extent of investor interest;

     o    the general reputation of REITs and the attractiveness of their equity
          securities  in  comparison  to  other  equity  securities,   including
          securities issued by other real estate-based companies;

     o    our financial performance and that of our operators;

     o    the contents of analyst reports about us and the REIT industry;

     o    general  stock  and  bond  market  conditions,  including  changes  in
          interest rates on fixed income securities,  which may lead prospective
          purchasers  of our common  stock to demand a higher  annual yield from
          future distributions;

     o    our failure to maintain or increase our dividend,  which is dependent,
          to a large  part,  on growth of funds  from  operations  which in turn
          depends upon increased revenues from additional investments and rental
          increases; and

     o    other factors, including governmental regulatory action and changes in
          REIT tax laws.

     The market value of the equity securities of a REIT is generally based upon
the  market's  perception  of the REIT's  growth  potential  and its current and
potential  future  earnings  and cash  distributions.  Our  failure  to meet the
market's expectation with regard to future earnings and cash distributions would
likely adversely affect the market price of our common stock.


                                      -11-


     Debt Financing/Leverage.  Financing for future investments and our maturing
commitments  may be provided by  borrowings  under our senior  credit  facility,
private or public  offerings of debt,  the  assumption of secured  indebtedness,
mortgage  financing  on a  portion  of our  owned  portfolio  or  through  joint
ventures.  We are  subject to risks  normally  associated  with debt  financing,
including  the  risks  that our cash flow will be  insufficient  to make  timely
payments of interest, that we will be unable to refinance existing indebtedness,
and that the  terms of  refinancing  will not be as  favorable  as the  terms of
existing  indebtedness.  If we are  unable  to  refinance  or  extend  principal
payments  due  at  maturity  or  pay  them  with  proceeds  from  other  capital
transactions,  our  cash  flow  may  not  be  sufficient  in  all  years  to pay
distributions to our  stockholders and to repay all maturing debt.  Furthermore,
if prevailing  interest  rates,  changes in our debt ratings or other factors at
the time of refinancing  result in higher interest rates imposed on refinancing,
the interest  expense relating to that refinanced  indebtedness  would increase,
which could reduce our  profitability and the amount of dividends we are able to
pay. Moreover, additional debt financing increases the amount of our leverage.

Certain of our operators account for a significant percentage of our revenues.
        
     Based  on  existing  contractual  rent and  lease  payments  regarding  the
restructuring of certain existing investments,  Advocat and Sun each account for
over 10% of our current  contractual  monthly revenues,  with Sun accounting for
over 20% of our current contractual monthly revenues. Additionally, our top five
operators  account  for  approximately  55% of our current  contractual  monthly
revenues.  The  failure  or  inability  of any of these  operators  to pay their
obligations  to us could  materially  reduce our revenues and net income,  which
could in turn reduce the amount of dividends we pay and cause our stock price to
decline.

Unforeseen  costs associated with the acquisition of new properties could reduce
our profitability.
        
     Our business strategy  contemplates  future acquisitions that may not prove
to be successful. For example, we might encounter unanticipated difficulties and
expenditures   relating  to  any  acquired   properties,   including  contingent
liabilities,  or newly acquired properties might require significant  management
attention that would otherwise be devoted to our ongoing  business.  If we agree
to provide funding to enable healthcare  operators to build,  expand or renovate
facilities  on our  properties  and the  project is not  completed,  we could be
forced to become  involved in the  development to ensure  completion or we could
lose the property. These costs may negatively affect our results of operations.

Our assets may be subject to impairment charges.
        
     We  periodically,  but not less than  annually,  evaluate  our real  estate
investments and other assets for impairment  indicators.  The judgment regarding
the  existence  of  impairment  indicators  is based on  factors  such as market
conditions,  operator  performance and legal  structure.  If we determine that a
significant  impairment has occurred, we would be required to make an adjustment
to the net  carrying  value of the asset,  which  could have a material  adverse
affect on our results of operations  and funds from  operations in the period in
which the write-off occurs.

We may not be able to sell certain closed facilities for their book value.
        
     From time to time, we close  facilities and actively market such facilities
for sale.  To the  extent we are unable to sell  these  properties  for our book
value,  we may be required to take a non-cash  impairment  charge or loss on the
sale, either of which would reduce our net income.


                                      -12-


Our real estate investments are relatively illiquid.
        
     Real estate  investments are relatively  illiquid and,  therefore,  tend to
limit our  ability to vary our  portfolio  promptly  in  response  to changes in
economic  or other  conditions.  All of our  properties  are  "special  purpose"
properties that could not be readily converted to general residential, retail or
office use. Healthcare  facilities that participate in Medicare or Medicaid must
meet extensive program  requirements,  including  physical plant and operational
requirements, which are revised from time to time. Such requirements may include
a duty to admit  Medicare  and  Medicaid  patients,  limiting the ability of the
facility to increase its private pay census beyond certain limits.  Medicare and
Medicaid facilities are regularly inspected to determine compliance,  and may be
excluded from the programs - in some cases without a prior hearing - for failure
to meet program requirements. Transfers of operations of nursing homes and other
healthcare-related  facilities are subject to regulatory  approvals not required
for  transfers of other types of commercial  operations  and other types of real
estate. Thus, if the operation of any of our properties becomes unprofitable due
to  competition,  age of  improvements  or other factors such that our lessee or
mortgagor  becomes unable to meet its obligations on the lease or mortgage loan,
the liquidation  value of the property may be substantially  less,  particularly
relative to the amount  owing on any related  mortgage  loan,  than would be the
case if the  property  were  readily  adaptable  to other  uses.  The receipt of
liquidation proceeds or the replacement of an operator that has defaulted on its
lease or loan could be delayed by the approval process of any federal,  state or
local agency  necessary for the transfer of the property or the  replacement  of
the operator with a new operator  licensed to manage the facility.  In addition,
certain significant expenditures associated with real estate investment, such as
real  estate  taxes and  maintenance  costs,  are  generally  not  reduced  when
circumstances  cause a  reduction  in income  from the  investment.  Should such
events  occur,  our income and cash flows  from  operations  would be  adversely
affected.

As an owner or lender  with  respect  to real  property,  we may be  exposed  to
possible environmental liabilities.

     Under various federal,  state and local environmental laws,  ordinances and
regulations,  an owner of real property or a secured lender,  such as us, may be
liable in  certain  circumstances  for the costs of removal  or  remediation  of
certain  hazardous or toxic  substances  at, under or disposed of in  connection
with such  property,  as well as  certain  other  potential  costs  relating  to
hazardous  or toxic  substances,  including  government  fines and  damages  for
injuries to persons and adjacent  properties.  Such laws often impose  liability
without  regard to  whether  the  owner  knew of, or was  responsible  for,  the
presence or  disposal of such  substances  and  liability  may be imposed on the
owner in connection with the activities of an operator of the property. The cost
of any required remediation,  removal, fines or personal or property damages and
the owner's  liability  therefore  could exceed the value of the property and/or
the assets of the owner. In addition,  the presence of such  substances,  or the
failure to properly  dispose of or  remediate  such  substances,  may  adversely
affect the owner's ability to sell or rent such property or to borrow using such
property as collateral which, in turn, would reduce the owner's revenues.
        
     Although our leases and mortgage loans require the lessee and the mortgagor
to  indemnify  us for  certain  environmental  liabilities,  the  scope  of such
obligations may be limited,  and we cannot assure you that any such mortgagor or
lessee would be able to fulfill its indemnification obligations.

The industry in which we operate is highly  competitive.  This  competition  may
prevent us from raising prices at the same pace as our costs increase.


                                      -13-


     We  compete  for  additional  healthcare  facility  investments  with other
healthcare  investors,  including  other REITs.  The operators of the facilities
compete with other regional or local nursing care  facilities for the support of
the medical community, including physicians and acute care hospitals, as well as
the general  public.  Some  significant  competitive  factors for the placing of
patients in skilled and intermediate care nursing  facilities include quality of
care,  reputation,  physical  appearance of the  facilities,  services  offered,
family preferences,  physician services and price. If our cost of capital should
increase relative to the cost of capital of our competitors,  the spread that we
realize on our investments may decline if competitive pressures limit or prevent
us from charging higher lease or mortgage rates.

We are named as defendants in litigation  arising out of professional  liability
and general  liability  claims  relating to our  previously  owned and  operated
facilities  which if decided  against us, could  adversely  affect our financial
condition.
        
     We  and  several  of our  wholly-owned  subsidiaries  have  been  named  as
defendants in professional liability and general liability claims related to our
owned and operated  facilities.  Other third-party  managers responsible for the
day-to-day  operations of these facilities have also been named as defendants in
these claims. In these suits,  patients of certain previously owned and operated
facilities have alleged significant damages, including punitive damages, against
the  defendants.  The  lawsuits are in various  stages of  discovery  and we are
unable to predict the likely  outcome at this time.  We  continue to  vigorously
defend  these  claims and pursue all rights we may have  against the managers of
the  facilities  under the terms of the management  agreements.  We have insured
these matters,  subject to self-insured retentions of various amounts. There can
be no assurance that we will be successful in our defense of these matters or in
asserting our claims against various managers of the subject  facilities or that
the  amount of any  settlement  or  judgment  will be  substantially  covered by
insurance or that any punitive damages will be covered by insurance.

If we fail to maintain our REIT status, we will be subject to federal income tax
on our taxable income at regular corporate rates.
        
     We were  organized  to qualify for  taxation as a REIT under  Sections  856
through 860 of the Internal  Revenue Code. We believe we have conducted,  and we
intend to  continue  to  conduct,  our  operations  so as to  qualify as a REIT.
Qualification as a REIT involves the satisfaction of numerous requirements, some
on an annual and some on a quarterly basis,  established  under highly technical
and complex  provisions  of the  Internal  Revenue Code for which there are only
limited   judicial   and   administrative   interpretations   and   involve  the
determination of various factual matters and  circumstances  not entirely within
our control.  We cannot assure you that we will at all times satisfy these rules
and tests.
        
     If we were to fail to qualify as a REIT in any taxable year, as a result of
a determination  that we failed to meet the annual  distribution  requirement or
otherwise,  we would be subject to federal income tax,  including any applicable
alternative  minimum tax, on our taxable income at regular  corporate rates with
respect to each such taxable year for which the statute of  limitations  has not
expired. Moreover, unless entitled to relief under certain statutory provisions,
we also would be  disqualified  from  treatment  as a REIT for the four  taxable
years  following the year during which  qualification  is lost.  This  treatment
would  significantly  reduce  our net  earnings  and cash  flow  because  of our
additional  tax  liability  for the years  involved,  which could  significantly
impact our ability to pay interest and principal with respect to the notes.

We are  exposed  to market  risk due to the fact that  borrowings  under our new
senior  credit  facility  are or will be subject to wide  fluctuations  based on
changing interest rates.
        
     Market  risk is the risk of loss  arising  from  adverse  changes in market
rates and prices,  such as interest rates,  foreign currency  exchange rates and
commodity  prices.  Our primary  exposure  to market risk is interest  rate risk
associated with variable borrowings under our senior credit facility.  Since our
senior credit  facility  provides for variable  rates,  if market interest rates
rise,  so will our required  interest  payments on  borrowings  under the senior
credit facility.  We do not currently have any mechanism in place to manage,  or
hedge, the market risk associated with our variable rate debt.

We  depend  upon our key  employees  and may be  unable  to  attract  or  retain
sufficient numbers of qualified personnel.
        
     Our future  performance  depends to a significant degree upon the continued
contributions  of  our  executive  management  team  and  other  key  employees.
Accordingly,  our future success depends on our ability to attract,  hire, train
and retain highly skilled management and other qualified personnel.  Competition
for qualified employees is intense,  and we compete for qualified employees with
companies that may have greater financial resources than we have. Our employment
agreements  with our executive  officers  provide that their  employment  may be
terminated by either party at any time.  Consequently,  we may not be successful
in attracting,  hiring,  training and retaining the people we need,  which would
seriously impede our ability to implement our business strategy.

              DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN

     The  following  discussion,  in question  and answer  format,  explains the
provisions of the Plan.

1.       What is the purpose of the Plan?

     The purpose of the Plan is to provide our stockholders and investors with a
convenient  and  economical  way to purchase  shares of our common  stock and to
reinvest all or a portion of their cash  dividends in  additional  shares of our
common stock. The Plan is designed to promote  ownership among  stockholders who
are committed to investing a minimum amount, holding their shares in direct form
and building share ownership over time. Also, because the shares of common stock
purchased  under  the Plan may be  acquired  directly  from us,  we may  receive
additional  equity  funds,  which will be added to our general funds and will be
used for general corporate purposes.

2.       Who administers the Plan for the Participants?

     EquiServe  Trust  Company,   N.A.,   referred  to  in  this  prospectus  as
"EquiServe" or the "administrator," administers the Plan, holds shares of common
stock acquired under the Plan,  keeps records,  sends  statements of activity to
participants, and performs other duties related to the Plan. EquiServe, Inc., an
affiliate  of  the  administrator,  is a  transfer  agent  registered  with  the
Securities   and  Exchange   Commission  and  acts  as  service  agent  for  the
administrator.

         You may contact the administrator in any of the following ways:


                                      -15-





                         
                   By telephone:                                                     Internet:

             Toll Free: (800) 317-4555                         Unless you are participating in the Plan through your
                                                                   bank, broker or other nominee, you can obtain
An automated telephone system is available 24 hours               information about your Plan account through the
     a day, seven days a week. Customer service                   Internet at the Plan administrator's website at
  representatives are available from 9:00 a.m. to                www.equiserve.com. On the website, you can access
 5:00 p.m., Eastern Time, each business day. If you               your share balance, sell shares, request a stock
reside outside the United States and Canada you may                certificate and obtain online forms and other
 contact the Plan administrator at (781) 575-2724.              information about your Plan account. To gain access,
                                                                 you will require a password, which is included on
                                                                 your dividend statement. You may also request your
                                                                   password by calling (800) 317-4445.

             Telecommunications device                                              In writing:
             for the hearing impaired:
                                                                           EquiServe Trust Company, N.A.
                TDD: (800) 952-9245                                    Attn: Omega Healthcare Investors, Inc.
                                                                             Dividend Reinvestment Plan
                                                                                   P.O. Box 43081
                                                                        Providence, Rhode Island 02940-3881

                                                               Please reference Omega Healthcare Investors, Inc. and
                                                                  your account number in all correspondence. When
                                                               corresponding with the administrator, we suggest that
                                                               you give your daytime telephone number and area code.


3.       What are the advantages of the Plan?

     o    There are no fees or brokerage  commissions on purchases,  and we will
          bear the expenses for open market purchases.

     o    Participation  is  voluntary  and  automatic.  All or any part of your
          quarterly stock dividends may be reinvested.

     o    The automatic reinvestment of dividends will enable you to add to your
          investment in our company in a timely and systematic fashion.

     o    In addition to being able to reinvest  your  dividends,  if you are an
          existing stockholder, you may purchase additional shares of our common
          stock by making  optional cash purchases of between $50 and $6,250 per
          calendar month. These optional cash purchases may be made occasionally
          or at regular intervals,  subject to the restrictions described above.
          You may make optional cash  purchases even if dividends on your shares
          are not being  reinvested  under the Plan. We may waive the maximum in
          our sole discretion and permit a larger investment.

     o    If you are not  presently  one of our  stockholders,  you may become a
          participant  in the Plan by making an initial cash  investment  in our
          common  stock of not less than $250 and not more than  $6,250.  We may
          waive  this  maximum,  in our  sole  discretion,  and  permit a larger
          investment.

                                      -16-


     o    The  purchase  price  for newly  issued  shares  of our  common  stock
          purchased  directly from us either through  dividend  reinvestment  or
          optional  cash  purchases  may be issued at a discount from the market
          price. We will periodically  establish a discount rate ranging from 0%
          to 5%.

     o    You may purchase fractional shares of our common stock under the Plan.
          This means that you may fully invest your  dividends  and any optional
          cash purchases. Dividends will be paid on the fractional shares of our
          common stock which also may be reinvested in additional shares.

     o    You may direct the  administrator  to transfer,  at any time and at no
          cost to you,  all or a  portion  of your  shares in the Plan to a Plan
          account for another person.

     o    You  can  avoid  the  need  of  holding  your  stock  certificates  by
          submitting them to the  administrator  for safekeeping.  By depositing
          your  stock  certificates,  you do not have to worry  about them being
          lost or stolen.  The shares will be  credited to your Plan  account in
          "book-entry" form.

     o    You or any  other  person  that is a holder of record of shares of our
          common stock may direct the administrator to sell or transfer all or a
          portion of your shares held in the Plan.

     o    You will receive periodic  statements  reflecting all current activity
          in your Plan accounts, including purchases, sales and latest balances,
          to  simplify  your  record  keeping.  You may also  view  year-to-date
          activity in your Plan account,  as well as activity in prior years, by
          accessing  your  Plan  account  at  the  administrator's   website  at
          www.equiserve.com.

4.       What are the disadvantages of the Plan?

     o    Cash  dividends  that you reinvest will be treated for federal  income
          tax  purposes  as a  dividend  received  by  you on  the  date  we pay
          dividends  and may create a  liability  for the  payment of income tax
          without  providing  you  with  immediate  cash to pay this tax when it
          becomes due.

     o    We may, without giving you prior notice,  change our  determination as
          to whether the administrator  will purchase shares of our common stock
          directly  from  us,  in the open  market  or in  privately  negotiated
          transactions  from third  parties,  which in turn will affect  whether
          such shares will be sold to you at a discount.  We will not,  however,
          change our determination more than once in any three-month period. You
          will not know the actual  number of shares  purchased  in any month on
          your behalf under the Plan until after the applicable investment date.

     o    You will have limited control  regarding the timing of sales under the
          Plan.  Because the administrator will effect sales under the Plan only
          as soon as practicable  after it receives  instructions  from you, you
          may not be able to  control  the  timing  of  sales as you  might  for
          investments made outside the Plan.


                                      -17-


     o    The  market  price of the  shares of our  common  stock may  fluctuate
          between the time the administrator  receives an investment instruction
          and the time at which the shares of our common stock are sold. Because
          purchases  under  the Plan are only  made as of the  dividend  payment
          date, in the case of dividends,  or the applicable investment date, in
          the case of  optional  cash  purchases,  you have no control  over the
          timing of your purchases under the Plan.

     o    No discount will be available  for shares  acquired in the open market
          or in privately negotiated transactions.

     o    While a discount from market prices of up to 5% may be established for
          a particular month for shares  purchased  directly from us, a discount
          for one month will not insure the  availability  of a discount  or the
          same discount in future months.  Each month we may, without giving you
          prior notice,  change or eliminate the discount.  Further, in no event
          may we issue  shares at a price less than 95% of the  market  price of
          our common stock on the date of issuance.

     o    Shares deposited in a Plan account may not be pledged until the shares
          are withdrawn from the Plan.

     o    Your  investment in the shares of common stock held in your account is
          no different  than a direct  investment in shares of our common stock.
          You bear the risk of loss and the  benefits of gain from market  price
          changes  for all of your  shares of common  stock.  Neither we nor the
          administrator can assure you that shares of our common stock purchased
          under the Plan will,  at any  particular  time,  be worth more or less
          than the amount you paid for them.

5.       Who pays the expenses of the Plan?

     We will pay all  day-to-day  costs of the  administration  of the Plan. You
will be charged a service fee of $15 for each  requested  sale and a  processing
fee of $0.12  per each  whole  share  and  fraction  sold,  which  includes  the
applicable  brokerage  commissions the administrator is required to pay. We will
pay  for  all  applicable   fees   (including  any  brokerage   commissions  the
administrator is required to pay) associated with your purchases under the Plan.

6.       Who is eligible to participate in the Plan?

     A "registered  stockholder" (a stockholder whose shares of common stock are
registered  in our stock  transfer  books in his or her  name) or a  "beneficial
owner" (a  stockholder  whose  shares of common stock are  registered  in a name
other  than his or her  name;  for  example,  in the name of a  broker,  bank or
nominee) may participate in the Plan. In addition,  an interested  investor that
is not a  stockholder  may  participate  in the Plan by making an  initial  cash
investment  of at least $250.  For further  instructions,  please see Question 7
below.

7.       How do I enroll in the Plan?

     Registered  Stockholders.  After  reading  our  prospectus,  if  you  are a
registered  stockholder  of our common stock,  you may join the Plan by going to
the administrator's web site at www.equiserve.com,  or by completing and signing
an Enrollment Authorization Form and returning it to the administrator.


                                      -18-


     Beneficial Owners. If you are a beneficial owner and wish to join the Plan,
you must contact your bank, broker or other nominee to arrange  participation in
the Plan on your behalf.  To facilitate  participation by beneficial  owners, we
have made  arrangements  with the Plan  administrator to reinvest  dividends and
accept optional cash investments under the stock purchase feature of the Plan by
registered  stockholders such as brokers, banks and other nominees, on behalf of
beneficial owners.

     Alternatively,  if you are a beneficial  owner of our common stock, you may
simply  request that the number of shares of our common stock you wish to enroll
in the Plan be  re-registered  by the bank,  broker or other nominee in your own
name as record  stockholder.  You can then directly  participate  in the Plan as
described above. You should contact your bank, broker or nominee for information
on how to re-register your shares.

     New Investors.  If you do not currently own shares of our common stock, you
may join the Plan in either of the following ways:

     o    Going  to the  administrator's  web  site  at  www.equiserve.com,  and
          following the instructions provided for opening a Plan account online.
          You will be asked to complete an Online Initial Investment Form and to
          submit an initial optional cash purchase  between $250 and $6,250.  To
          make an initial  optional  cash  purchase you may authorize a one-time
          online bank debit from your U.S.  bank account or you may  authorize a
          minimum of five (5)  consecutive  monthly  automatic  deductions of at
          least $50 each from your U.S. bank account.

     o    Completing  and signing an Initial  Investment  Form and submitting an
          initial  investment in the amount between $250 and $6,250.  To make an
          initial  optional  cash  purchase  in this  manner,  you may enclose a
          check,  payable  in U.S.  funds and  drawn  against  a U.S.  bank,  to
          "EquiServe  Trust  Company,  N.A.," or you may  authorize a minimum of
          five  consecutive  monthly  automatic  deductions of at least $50 each
          from  your  U.S.  bank  account  on the  reverse  side of the  Initial
          Investment Form and follow the instructions provided.

     New investors choosing to make their initial optional cash purchase through
automatic monthly  deductions should note that the automatic monthly  deductions
will   continue   indefinitely   beyond  the  initial   investment   unless  the
administrator is notified to discontinue such deductions. Please see Question 12
for further information on optional cash purchases.

     Current Plan Participants. If you are participating in our current Dividend
Reinvestment and Common Stock Purchase Plan, you will automatically  continue to
be enrolled in the Plan without having to submit a new Enrollment  Authorization
Form.  Your  participation  in the Plan will continue  unless you  affirmatively
withdraw from the Plan. You may also change your dividend election at any time.

     Those  holders of our common  stock who do not wish to  participate  in the
Plan will continue to receive cash dividends in the usual manner.

8.       What does the Enrollment Authorization Form provide?

     The Enrollment Authorization Form appoints the Plan's administrator as your
administrator for purposes of the Plan and directs the administrator to apply to
the purchase of additional  shares of common stock all of the cash  dividends on
the  specified  number  of  shares  of  our  common  stock  owned  by you on the
applicable record date and designated by you to be reinvested  through the Plan.


                                      -19-


The Enrollment  Authorization  Form also directs the  administrator  to purchase
additional  shares of our common stock with any optional cash purchases that you
may  elect  to  make.  By  checking  the   appropriate  box  on  the  Enrollment
Authorization Form, you indicate which features of the Plan you will use.

     Full Reinvestment of Dividends.  Select this option if you wish to reinvest
the  dividends on all our common stock  registered in your name in a certificate
form as well as on all common  stock  credited to your Plan  account.  Selecting
this  alternative  also permits you to make  monthly  optional  cash  purchases;
however,  you must still comply with the other  requirements for making optional
cash investments.

     Partial  Reinvestment  of  Dividends.  Select  this  option  if you wish to
receive  cash  dividends on the number of shares that you  designate  from those
credited to your Plan account and those registered in your name in a certificate
form.  The Plan  administrator  will apply the  dividends  paid on any remaining
shares to the purchase of additional shares of our common stock, which will then
be credited to your Plan account.  Selecting this alternative also allows you to
make monthly  optional cash purchases;  however,  you must still comply with the
other requirements for making optional cash purchases.

     All Cash (No Dividend Reinvestment).  Select this option if you do not wish
to have the cash dividends paid on the shares  credited to your Plan account and
those  registered in your name in a certificate  form be reinvested,  but rather
sent to you by check or  through  direct  deposit  to your  U.S.  bank  account.
Selecting  this  alternative  still  allows you to make  monthly  optional  cash
purchases; however, you must still comply with the other requirements for making
optional cash purchases.

9.   How can I  change  my  method  of  participation  or  discontinue  dividend
     reinvestment?

         You may change your method of participation at any time by:

     o    accessing   your   Plan   account   through   the   Internet   at  the
          administrator's web site at www.equiserve.com;

     o    calling the administrator at (800) 317-4445;

     o    submitting  a  newly  executed  Enrollment  Authorization  Form to the
          administrator; or

     o    writing to the administrator at the address listed in Question 2.

     If you do not make an election on your Enrollment  Authorization  Form, the
administrator will reinvest all dividends paid on your shares. Any change in the
number of shares  with  respect  to which the  administrator  is  authorized  to
reinvest  dividends  must be received by the  administrator  prior to the record
date  for a  dividend  to  permit  the new  number  of  shares  to apply to that
dividend.  For each  method of dividend  reinvestment,  cash  dividends  will be
reinvested  on all  shares  other  than  those  designated  for  payment of cash
dividends in the manner specified above until you specify  otherwise or withdraw
from the Plan altogether, or until the Plan is terminated.

     You may  discontinue  reinvestment  of cash dividends under the Plan at any
time by accessing your Plan account through the Internet at the  administrator's
web site at  www.equiserve.com,  by calling the administrator at (800) 317-4445,
or by written notice to the  administrator  at the address listed in Question 2.


                                      -20-


If a notice to discontinue is received by the  administrator  after the dividend
record date for a dividend payment, the administrator in its sole discretion may
either  pay such  dividend  in cash or  reinvest  it in  shares on behalf of the
discontinuing   Plan   participant.   If  such  dividend  is   reinvested,   the
administrator  may sell the shares  purchased  less any fees and any  applicable
costs  of  sales.   After  processing  your  request  to  discontinue   dividend
reinvestment,  any shares credited to your Plan account will continue to be held
in "book-entry" form.  Dividends on any shares held in "book-entry" form and any
shares held in certificated form will be paid in cash.

10.      When will my participation in the Plan begin?

     Your  participation in the dividend  reinvestment  portion of the Plan will
commence on the next date we pay dividends,  provided the administrator receives
your Enrollment  Authorization Form on or before the record date for the payment
of the dividend.

     Your  participation  in the optional cash purchase portion of the Plan will
commence on the next investment date, which will be the 15th calendar day of the
month  (unless  there are no trades of our common stock  reported on the NYSE on
the 15th  calendar  day,  in which  case the  investment  date  will be the next
trading day following the 15th calendar day of that month in which trades of our
common stock are reported on the NYSE),  provided  that  sufficient  funds to be
invested are received on or before the  business  day  immediately  prior to the
investment  date.  Should the funds to be invested  arrive after the  applicable
optional cash  investment  due date,  those funds will be held without  interest
until they can be  invested  on the next  investment  date  unless you request a
refund from the administrator.

     Once enrolled, you will remain enrolled until you discontinue participation
or until we terminate the Plan.

11.  How many shares may be purchased by a participant during any month or year?

     Reinvested dividends are not subject to any minimum or maximum limits.

     Optional cash  purchases  are subject to a minimum  investment of $50 and a
maximum investment of $6,250 in any calendar month.

     Initial  optional cash  purchases by investors  that are not yet one of our
stockholders  are  subject  to a minimum  of $250 and a maximum of $6,250 in any
calendar month.

     The maximum for optional cash purchases may be waived by us in our sole and
absolute  discretion.  You may request a waiver of such maximum by  submitting a
request for waiver  which we must receive at least five  business  days prior to
the  applicable  pricing  period.  The  "pricing  period"  is the period of time
encompassing  the ten  consecutive  trading  days ending on the last trading day
preceding the investment date of each month as described in Question 18.

     Optional cash purchase  amounts of less than $50, or $250 in the case of an
initial optional cash purchase by a non-stockholder,  and, unless the maximum is
waived,  any  optional  cash  purchases  that  exceed the  maximum of $6,250 per
calendar month, will be returned to you without interest.

12.      How are optional cash purchases made?

     Optional  cash  purchases  allow you to purchase more shares than you could
purchase just by reinvesting  dividends.  You can buy shares of our common stock
each month with optional cash investments after you have enrolled in the Plan as
described in Question 7 above. The administrator will use your funds to purchase


                                      -21-


common stock for your Plan account on the next investment date after it receives
your cash payment. If the administrator does not receive your funds at least one
business  day prior to the next  investment  date,  the  administrator  will not
invest  your  funds on the next  investment  date but will hold  your  funds for
investment on the next subsequent investment date.

     You can  make  optional  cash  purchases  even if you have  not  chosen  to
reinvest  your cash  dividends  on any shares held by you. If you choose to make
only optional cash purchases, we will continue to pay cash dividends when and as
declared  on any  shares  of our  common  stock  registered  in  your  name in a
certificate form and those shares credited to your Plan account.

     Investment  by One-Time  Online Bank  Debit.  At any time,  you may make an
optional  cash purchase  within the Plan limits by going to the  administrator's
website at www.equiserve.com,  and authorizing a one-time online bank debit from
your U.S. bank account.  One-time  online  optional cash purchase  funds will be
held by the Plan  administrator  for three  business  days before such funds are
invested.  Please refer to the online  confirmation  for your bank account debit
date and investment date.

     Investment  by Check.  You may make your first  optional cash purchase when
you enroll by enclosing a check with the Enrollment  Authorization Form. You may
also make an optional  cash purchase  within the Plan limits by  completing  the
Cash Investment Form attached to your Plan account  statement.  Checks should be
made payable to "EquiServe  Trust  Company,  N.A.," in U.S. funds and drawn on a
U.S.  bank. It is also  important to indicate  your Plan account  number on your
check. Do not send cash,  traveler's checks, money orders, or third party checks
for optional cash investments.

     Automatic  Monthly  Investments.  You may also make optional cash purchases
each month,  within the Plan limits,  by instructing the Plan  administrator  to
arrange for automatic monthly deductions from your designated U.S. bank account.

     Automatic monthly investments may be authorized through the Internet at the
administrator's  web site at  www.equiserve.com,  or by  completing an Automatic
Monthly  Investment  Form and returning it to the Plan  administrator.  It takes
approximately  four to six weeks from the time the  administrator  receives your
authorization until your first deduction occurs.

     Once you begin making automatic monthly investments, the Plan administrator
will draw funds from your designated account three business days before the next
investment  date of each month and will purchase  shares of common stock on that
investment date.  Automatic  monthly  investments will continue at the level you
set until you  instruct  the  administrator  otherwise.  You can  change or stop
automatic  monthly  investments  by  accessing  your Plan  account  through  the
Internet at the Plan administrator's web site, www.equiserve.com, by calling the
administrator  at (800)  317-4445,  by completing  and returning a new Automatic
Monthly Investment Form or giving written instructions to the administrator.  If
you wish to stop automatic monthly  investments,  or to change the dollar amount
to be  withdrawn,  your  request must be received at least seven  business  days
prior to the next debit date.

     If  the  Plan  administrator  is  unable  to  process  your  optional  cash
purchase(s)  within 35 days, the Plan administrator will return the funds to you
by check.  No interest will be paid on funds held by the  administrator  pending
investment.

     If any optional cash purchase is returned  unpaid,  whether the  investment
was made by check or by an attempted  automatic  withdrawal  from your U.S. bank
account,  the  administrator may consider the request for the investment of such
money  null and void and may  immediately  remove  from your  account  shares of
common stock purchased.  The  administrator may sell those shares to satisfy any


                                      -22-


uncollected  amount and a $25 returned  funds fee. By enrolling in the Plan, you
authorize the  administrator  to deduct this fee by selling the shares from your
Plan  account.  If the proceeds from the sale of the common stock do not satisfy
the service and processing fees, uncollected balance and returned funds fee, the
administrator  may sell additional shares from your Plan account to satisfy such
fees.

13.  How do I get a refund of an optional cash purchase if I change my mind?

     You may  obtain a refund of any  optional  cash  purchase  payment  not yet
invested by calling the  administrator at (800) 317-4445 and requesting a refund
of your payment.  The  administrator  must receive your request for a refund not
later  than  two  business  days  prior  to the  next  investment  date.  If the
administrator  receives your request later than the  specified  date,  your cash
purchase payment will be applied to the purchase of shares of common stock.

14.  Will I be paid interest on funds held for optional cash purchases  prior to
     investment?

     You will not be paid  interest on funds you send to the  administrator  for
optional  cash  purchases.  Consequently,  we strongly  suggest that you deliver
funds to the  administrator to be used for investment in optional cash purchases
shortly prior to but not after the applicable  optional cash investment due date
so that they are not held over to the following investment date. If you have any
questions  regarding the  applicable  investment  dates or the dates as of which
funds  should  be  delivered  to  the  administrator,  you  should  contact  the
administrator  through the  Internet,  by telephone or in writing at the address
and telephone numbers specified in Question 2 above.

     You should be aware that because  investments under the Plan are made as of
specified  dates,  you may lose any advantage that you otherwise might have from
being  able  to  control  the  timing  of an  investment.  Neither  we  nor  the
administrator can assure you a profit or protect you against a loss on shares of
common stock purchased under the Plan.

15.  When will shares be purchased under the Plan?

     The  administrator  will credit shares of our common stock  purchased  with
reinvested dividends to your account on the applicable "investment date" for the
fiscal quarter in which the purchase is made. The Plan administrator will credit
shares to your Plan account for optional cash purchases on the next  "investment
date" after the administrator receives your cash payment.

     The  investment  date is the date on which  shares of our common  stock are
purchased with reinvested dividends, initial and optional cash investments of up
to $6,250 and in excess of $6,250.

     If you  are  reinvesting  dividends  declared  on  our  common  stock,  the
investment  date is the date of payment  of  quarterly  dividends  on our common
stock,  or the dividend  payment date,  provided that if no trades of our common
stock are reported on the NYSE on the date we pay dividends, or the trading day,
the administrator shall apply such reinvested  dividends on the next trading day
on which there are trades of our common stock  reported on the NYSE.  The record
date associated with a particular  dividend  distribution is referred to in this
prospectus as a "dividend record date."

     It is our  policy to  declare  quarterly  distributions  to the  holders of
common stock so as to comply with  applicable  sections of the Internal  Revenue
Code  governing  REITs.  Subject  to the  foregoing,  future  dividends  will be
determined in light of our  earnings,  financial  condition  and other  relevant
factors.


                                      -23-


     For initial and optional  cash  purchases,  both within the Plan limits and
pursuant to an approved request for waiver,  the monthly  investment date is the
15th day of the calendar  month  (unless the 15th  calendar day is not a trading
day, in which case the  investment  date will be the first trading day following
the 15th calendar day of that month).

16.  How are shares purchased under the Plan?

     The  administrator  may  purchase  shares  from (i) the open  market  or in
privately  negotiated  transactions,  (ii) our authorized but unissued shares of
our  common  stock,  or (iii) a  combination  of both.  There is no limit on the
number of shares  that the  administrator  may  purchase  in the open  market or
pursuant to privately negotiated purchases.

     However,  shares of common stock purchased by the administrator for initial
and  optional  cash  purchases  made  above the  $6,250  maximum  limit with our
permission  will be acquired  only from newly issued common stock and may not be
acquired from open market purchases or privately  negotiated  transactions.  See
Question 17.

     Because we  presently  expect to  continue  the Plan  indefinitely,  we may
authorize  additional  shares from time to time as necessary for purposes of the
Plan.

17.  At what price will shares be purchased?

     The purchase price for shares of our common stock under the Plan depends on
how you  purchase  the  shares  and on whether we issue new shares to you or the
Plan  obtains  your  shares by  purchasing  them in the open  market or  through
privately negotiated transactions.

     Reinvested  dividends  and/or  optional  cash  purchases  under the maximum
thresholds of $6,250. The purchase price for each share of common stock acquired
through the Plan by the reinvestment of dividends and/or optional cash purchases
of $6,250 or less per month will be equal to:

     o    in the case of newly issued shares of common stock, the average of the
          high and low NYSE prices on the applicable investment date on which we
          declare  dividends  and/or make optional  cash  purchases of $6,250 or
          less per month less a discount ranging from 0% to 5%, provided that if
          no  trades  of our  common  stock  are  reported  on the  NYSE  on the
          applicable   investment  date,  the  administrator   shall  apply  the
          reinvested  dividends and/or optional cash purchases of $6,250 or less
          per month on the next  trading  day on which  there are  trades of our
          common stock reported on the NYSE; or

     o    in the case of open market or privately negotiated  transactions,  the
          weighted  average of the purchase price of all shares purchased by the
          administrator  for the Plan with reinvested  dividends and/or optional
          cash  purchases  of  $6,250  or  less  per  month  on  the  applicable
          investment date. Discounts are not available when shares are purchased
          from persons other than us.

     All shares  purchased under the Plan through open market  purchases will be
acquired as soon as  practicable,  beginning on the investment  date and will be
completed no later than 30 days from such date for reinvestment of dividends and
35 days from such date for optional cash investments, except where completion at
a later date is necessary or advisable under any applicable  federal  securities
laws.  Such purchases may be made on any  securities  exchange where such shares
are traded, in the over-the-counter-market or in negotiated transactions and may
be  subject to such terms with  respect to price,  delivery,  etc.  to which the
administrator  may  agree.  Neither we nor the Plan  participant  shall have any
authority or power to direct the time or price at which shares may be purchased,
or the selection of the broker or dealer  through or from whom  purchases are to
be made.


                                      -24-


     Optional cash  purchases made above the $6,250 per month maximum limit with
our permission.  If we elect to allow you to purchase in excess of $6,250 in any
calendar month, the price will be equal to the average of the daily high and low
NYSE prices for each of the 10 trading days immediately preceding the applicable
investment date, or the daily average price,  less a discount ranging from 0% to
5%.

     All shares of common stock purchased in excess of the maximum limit will be
newly  issued,  and no shares will be acquired  in open market  purchases  or in
privately negotiated transactions. Purchases made in excess of the maximum limit
may be  subject  to a minimum  price as  described  below.  To  obtain  specific
information for a specific  investment date, please call us at (410) 427-1700 or
visit our website at www.omegahealthcare.com.

     Threshold  Price.  We may  establish  a minimum  or  "threshold"  price for
optional cash  purchases  made with requests for waiver for any pricing  period.
For some pricing  period's  dates,  we may not establish a threshold  price.  At
least  three  trading  days  before  the first  day of a pricing  period we will
determine whether a threshold price wil be in effect,  and if so, its amount. If
we establish a threshold  price,  it will be stated as a dollar  amount that the
purchase  price for the shares of our common stock must equal or exceed.  If the
price of our common  stock is less than the  threshold  price on any trading day
during the pricing  period,  or if no trades of our common stock are reported on
the NYSE, then we will exclude that day and the trading prices for that day from
the calculation of the purchase price. For example,  if the minimum price is not
satisfied for three of the ten days in a pricing period, then the purchase price
will be based on the  remaining  seven days when the minimum price is satisfied.
For each day during the pricing  period that the minimum price is not satisfied,
we will  return one tenth  (1/10) of each  optional  cash  purchase  made with a
request for waiver to you by check,  without  interest,  as soon as  practicable
after the applicable investment date. The establishment of a threshold price and
the possible  return of a portion of the optional cash purchase  applies only to
optional cash purchases made pursuant to a request for waiver.

     Setting a threshold price for a pricing period shall not affect the setting
of a threshold  price for any  subsequent  pricing  period.  For any  particular
month, we reserve the right whether or not to set a threshold price.  Neither we
nor the  administrator  shall be  required  to  provide  any  written  notice to
participants as to the threshold price for any pricing period.  Participants may
however  ascertain  whether  a  threshold  price has been set or not set for any
given pricing period by telephoning us at (410) 427-1700 or visiting our website
at www.omegahealthcare.com.

     Maximum discount applicable to all dividend reinvestments and optional cash
purchases.  Whether  you are  reinvesting  dividends  or  making  optional  cash
purchases,  you may not purchase  shares of our common  stock on any  particular
trading day  (whether  such shares are newly  issued  shares or purchased by the
administrator  in open  market  or  privately  negotiated  transactions)  for an
amount,  less any  brokerage  commissions,  trading  fees and any other costs of
purchase  paid by us,  which is less than 95% of the average of the high and low
NYSE prices on that  particular  trading  day. In the event that shares would be
purchased for an amount, less any brokerage commissions,  trading fees and other
costs,  which  is below  95% of this  average,  your  purchase  price,  less any
brokerage  commissions,  trading  fees and other  costs,  will  equal 95% of the
average of the high and low NYSE prices on that day.

18.  How do I request a waiver of the purchase limitation?


                                      -25-


     You may make  optional  cash  purchases  in  excess of  $6,250  during  any
calendar month only pursuant to a request for waiver  approved by us in our sole
and absolute discretion. To obtain a Request for Waiver Form, you should contact
us at (410) 427-1700.  Completed  Requests for Waiver Forms can be sent to us by
facsimile at (410) 427-8822,  Attention:  Chief Financial Officer, by 2:00 p.m.,
Eastern Time, or mailed to us at Omega  Healthcare  Investors Inc., 9690 Deereco
Road, Suite 100, Timonium, MD 21093, Attention: Chief Financial Officer. We must
receive your request at least five business days before the start of the ten-day
pricing period for the applicable  investment  date. We will promptly notify you
as to whether we approved  your  request and the amount of your  request that we
approved. If your request is approved,  you a must send the administrator a copy
of our Form of Approval, together with your optional cash purchase in good funds
no later than 2:00 p.m.,  Eastern Time, on the business day before the first day
of the  pricing  period  for the next  applicable  investment  date.  To  obtain
specific  information for a specific  investment  date,  please call us at (410)
427-1700 or visit our web site at www.omegahealthcare.com.

     In the event that your request for waiver is not received by us on a timely
basis,  the  waiver  will  not be  approved  for that  investment  date and your
optional cash purchase  will be limited to $6,250 for that  investment  date. If
your  request  for a waiver  is not  timely,  or if we deny your  request  for a
waiver,  the  administrator  will  refund the entire  amount  submitted  without
interest thereon. We have sole and absolute discretion to grant any approval for
optional cash purchases in excess of the allowable maximum amounts.

     In  deciding  whether  to  approve or deny a request  for  waiver,  we will
consider  each request on a  case-by-case  basis and consider  various  relevant
factors, including, but not limited to:

     o    our need for additional funds;

     o    the  attractiveness of obtaining the additional funds through the sale
          of common stock as compared to other sources of funds;

     o    the purchase price likely to apply to any sale of common stock;

     o    the  participant  submitting  the  request,  including  the extent and
          nature of such participant's  prior participation in the Plan, and the
          number  of  shares  of  our  common   stock  held  of  record   and/or
          beneficially by such participant; and

     o    the aggregate  amount,  if any, of optional  cash  purchases for which
          requests for waiver have been submitted by all participants.

     If  requests  for  waiver  are  submitted  for any  investment  date for an
aggregate  amount in excess of the amount we are then willing to accept,  we may
honor those  requests by any method that we  determine to be  appropriate.  With
regard to optional cash  purchases  made  pursuant to a request for waiver,  the
Plan does not provide for a  predetermined  maximum limit on the amount that you
may  invest or on the number of shares  that may be  purchased.  We reserve  the
right to modify,  suspend or  terminate  participation  in the Plan by otherwise
eligible  holders  or  beneficial  owners of our  common  stock  for any  reason
whatsoever including,  without limitation, the elimination of practices that are
not consistent with the purposes of the Plan.

     The Plan may also be used by us to raise  additional  capital  through  the
sale each month of a portion of the shares available for issuance under the Plan
to owners  (including  brokers or dealers) who in connection with any resales of
such  shares,  may be deemed to be  underwriters.  These  sales will be effected


                                      -26-


through our ability to approve  requests  for waiver.  To the extent  shares are
purchased from us under the Plan, we will receive  additional  funds for general
corporate  purposes.  The Plan is intended  for the benefit of  investors in our
common stock and not for  individuals  or investors  who engage in  transactions
which may cause  aberrations in the price or trading volume of our common stock.
See the section entitled "Plan of Distribution" below.

19.  How and when will we determine whether shares of common stock will be newly
     issued or  purchased  in the market,  and how and when will we  establish a
     discount?

     We may, without prior notice to you, change our determination as to whether
common  stock will be purchased by the  administrator  directly  from us, in the
open market or in privately  negotiated  transactions from third parties or in a
combination  of both, in connection  with the purchase of shares of common stock
from reinvested dividends or from optional cash purchases. We will not, however,
change our determination more than once in any three-month period.

     We may, in our sole  discretion,  establish a discount of 0% to 5% from the
current market price for shares of our common stock purchased  through the Plan.
This  discount  may  apply  to  reinvested  dividends,   initial  optional  cash
purchases,  optional  cash  purchases  or  any  combination  thereof  as we  may
determine  from time to time.  If we elect to offer a discount,  we will fix the
discount at least three business days before the investment date with respect to
dividend  reinvestments,  initial  optional  cash  purchases  and optional  cash
purchases  within the Plan limits.  The discount  rate, if any, on optional cash
investments  pursuant to a request for waiver will be  announced  at least three
business  days before the first day of the pricing  period.  Such  discounts may
vary each month and may not apply  uniformly to all  purchases  made pursuant to
the Plan for that month. The discount will be established at our sole discretion
after a review of current market  conditions,  the level of participation in the
Plan, and current and projected  capital needs. You may obtain the discount,  if
any,  applicable to the next  investment  date by calling the  administrator  at
(800)  317-4445  or us at (410)  427-1700.  You may also  visit  our web site at
www.omegahealthcare.com.

     While a discount  from market  prices of up to 5% may be  established,  the
discount  is  subject  to  change  from  time to time  and is  also  subject  to
discontinuance  at our  discretion at any time. We will not offer a discount for
common  stock   purchased  in  the  open  market  or  in  privately   negotiated
transactions.

20.  Will certificates be issued for share purchases?

     The administrator  will not issue certificates for shares that you purchase
under the Plan.  Your account  statement will show the number of shares credited
to your Plan account in  "book-entry"  form. This service  protects  against the
loss, theft, or destruction of certificates  evidencing shares. However, you may
at any time request that the  administrator  issue a  certificate  for any whole
number of shares of common stock,  up to the number of whole shares  credited to
your Plan account.  You can request a certificate for some or all of your shares
by accessing your Plan account through the Internet at the Plan  administrator's
web  site at  www.equiserve.com,  by  calling  the Plan  administrator  at (800)
445-2617,  or by  writing to the Plan  administrator  at the  address  listed in
Question 2 above. The administrator  will not issue  certificates for fractional
shares of common stock under any circumstances. If you request a certificate for
all shares credited to your Plan account,  a certificate  will be issued for the
whole shares and a cash payment will be made for any remaining fractional share.
That  cash  payment  will be based  upon the  then-current  market  value of the
shares, less any applicable fees.


                                      -27-


     Receiving  a portion of your  shares in a  certificate  form from your Plan
account does not affect your dividend  reinvestment  option. For example, if you
authorized full dividend reinvestment, cash dividends with respect to the shares
issued in  certificate  form will  continue to be  reinvested.  However,  if you
withdraw all of your whole and  fractional  shares from your Plan account,  your
participation  in the Plan will be terminated  and any future  dividends will be
paid by check or direct deposit to your bank account.

21.  What if I have more than one Plan account?

     For  purposes  of the  limitations  discussed  in this  prospectus,  we may
aggregate  all optional  cash  purchases  for you if you have more than one Plan
account which uses the same social security or taxpayer  identification  number.
If you are unable to supply a social security or taxpayer identification number,
your  participation may be limited by us to only one Plan account.  Also for the
purpose  of these  limitations,  all Plan  accounts  that we believe to be under
common  control or  management  or to have common  beneficial  ownership  may be
aggregated.  Unless  we have  determined  that  reinvestment  of  dividends  and
optional  cash  purchases  for each Plan account  would be  consistent  with the
purposes of the Plan, we will have the right to aggregate all of these  accounts
and to  return,  without  interest,  any  amounts  in excess  of the  investment
limitations.

22.  May I add shares of common  stock to my Plan  account by  depositing  stock
     certificates that I possess?

     You may send to the Plan for  safekeeping  all  common  stock  certificates
which you hold.  The  safekeeping  of shares  offers the advantage of protection
against loss, theft or destruction of certificates as well as convenience if and
when shares are sold through the Plan. All shares  represented  by  certificates
will be kept for  safekeeping  and credited to your Plan account in "book-entry"
form and combined with any full and fractional  shares then held by the Plan for
you. If you wish to deposit your certificates of our common stock, you must mail
them along with a request to the  administrator  to hold your  certificates  for
safekeeping.  The certificates should not be endorsed.  Any certificates sent to
the  administrator  should be sent  registered  mail or certified  mail,  return
receipt requested,  and properly insured,  as you bear the risk for certificates
lost or stolen in transit. You may mail certificates to the administrator at the
address provided in Question 2 above.

     The  administrator  will  promptly  send you a  statement  confirming  each
deposit  of your  common  stock  certificates.  When  necessary,  you can simply
request that certificates be issued as your needs require.

23.  How do I sell shares of common stock in my Plan account?

     You may sell some or all of your  shares in your  Plan  account  (including
shares  deposited  by you  with  the  Plan  administrator  for  safekeeping)  by
accessing your Plan account through the Internet at the Plan administrator's web
site at  www.equiserve.com,  by calling the Plan administrator at (800) 446-2617
or by writing to the Plan  administrator  at the  address  listed in  Question 2
above.  You will be charged a service fee of $15 for each  requested  sale and a
processing fee of $0.12 per each whole share and fraction  sold,  which includes
the applicable  brokerage  commissions the administrator is required to pay. The
fees will be deducted  from the  proceeds  of the sale.  Shares you sell in this
manner  will be  aggregated  with  those  of  other  participants  for  whom the
administrator  is also selling shares on the same date. The  administrator  will
process all sale orders on the day the  administrator  receives  them,  provided
that the instructions are received before 1:00 p.m., Eastern time, on a business
day during which the Plan  administrator and the NYSE are open for business.  If
your sale instructions are received after 1:00 p.m., Eastern Time, on a business
day on which  the  administrator  and the NYSE are open for  business,  the sale
order will be processed on the following business day. The sale price for shares
sold will be the market price received from the sale of such shares.  Your sales
proceeds would then be remitted to you by check.


                                      -28-


     You will not earn interest on funds  generated  from the sale of shares for
the time period  between the date of sale and the date on which you receive your
check. The administrator reserves the right to designate a broker to sell shares
on the open market.  All sale  requests  having an  anticipated  market value of
$100,000  or more must be  submitted  in written  form.  In  addition,  all sale
requests  within 30 days of an address  change to your account must be submitted
in written form.

     Neither we nor any Plan  participant  has the authority or power to control
the timing, pricing, or the selection of a broker of any shares sold. Therefore,
you will not be able to precisely time your sales through the Plan, and you will
bear the market risk  associated  with  fluctuations  in the price of our common
stock.  That is, if you send in a request for a sale,  it is  possible  that the
market price of our common stock could  increase or decrease  before the sale is
completed. If you prefer to have control over the exact price and timing of your
sale, you may request through the Internet,  by telephone or in writing that the
administrator  issue to you a certificate  for any or all of the whole shares in
your Plan account,  and thereafter,  you can conduct the  transaction  through a
broker-dealer of your choice.

     Instructions  sent to the  administrator  to sell shares are binding on all
participants and may not be rescinded.

24.  How may I transfer  all or a part of my shares  held in the Plan to another
     person?

     You may  transfer  ownership of all or part of your shares held in the Plan
through gift, private sale or otherwise,  by mailing to the administrator at the
address provided in Question 2 above a properly executed stock power, along with
a letter with specific instructions regarding the transfer and a Substitute Form
W-9  (Certification  of  Taxpayer   Identification   Number)  completed  by  the
transferee.  Requests for transfer of shares held in the Plan are subject to the
same  requirements as the transfer of common stock  certificates,  including the
requirement  of  a  medallion  signature  guarantee  on  the  stock  power.  The
administrator  will provide you with the appropriate forms upon request.  If you
have any stock  certificates  bearing a restrictive legend in your Plan account,
the  administrator  will comply with the  provisions of the  restrictive  legend
before effecting a sale or transfer of the restricted shares. All transfers will
be subject to the limitations on ownership and transfer  provided in our charter
which are summarized below in the section entitled "Restrictions on Ownership of
Shares" and which are  incorporated  into this  prospectus by reference.  If you
have any  questions  regarding  transfer  requirements  for  shares in your Plan
account, please contact the administrator as specified in Question 2 above.

25.  What reports will be sent to participants in the Plan?

     You will receive a statement whenever there is activity affecting your Plan
account.  The  statement  will confirm each  transaction,  such as any purchase,
sale,  transfer,   certificate  deposit,   certificate   issuance,  or  dividend
reinvestment. Statements will be sent promptly following each transaction. These
statements are a record of your Plan account  activity  showing your  cumulative
share  position and the prices for your  purchases and sales of shares under the
Plan.  The  statements  will also show the amount of  dividends  reinvested  (if
applicable)  and any applicable  fees charged for your  respective  transactions
during that period. You should retain these statements for tax purposes.

     The final  statement for each year will show all pertinent  information for
that calendar year, including  tax-related  information.  The Plan administrator
may charge you a fee for additional copies of your account statements.


                                      -29-


     You may also view  year-to-date  transaction  activity in your Plan account
for the current year, as well as activity in prior years, by accessing your Plan
account at the administrator's website at www.equiserve.com.

     The  administrator  will also send you  copies of each  prospectus  and any
amendments or supplements  to the  prospectus  describing the Plan. We will also
send you the same  information  that we send to  other  stockholders,  including
annual reports, notices of stockholders' meetings, proxy statements,  and income
tax reporting information.

     Any participant  that  participates  in the Plan through a broker,  bank or
nominee, should contact that party for similar statements or material.

26.  What happens if we issue a stock dividend or subscription rights, declare a
     stock  split or make any other  distribution  in  respect  of shares of our
     common stock?

     All split shares, stock dividends,  or any other distribution of our common
stock on shares  credited to your Plan  account  and/or on shares held by you in
the form of stock  certificates  will be credited to your Plan  account with the
appropriate  number of shares of our common  stock on the payment  date.  In the
event that we make  available  to the holders of our common  stock  subscription
rights to purchase  additional  shares of common stock, the  administrator  will
sell  the  rights  accruing  to  all  shares  held  by  the   administrator  for
participants  and apply the net  proceeds of the sale to the  purchase of common
stock with the next monthly optional cash purchase.

27.  May shares in my account be pledged?

     You may not  pledge  shares  credited  to your or any  other  participant's
account and any  purported  pledge will be void.  If you wish to pledge  shares,
those shares must be withdrawn from the Plan.

28.  Will I be able to vote my shares of common stock held in the Plan?

     Whole  shares held in a Plan account may be voted in person or by the proxy
sent to you. Fractions of shares may not be voted.

     If you return your proxy  properly  signed and marked for  voting,  all the
shares  covered  by the  proxy - those  registered  in your  name  and/or  those
credited to your account under the Plan - will be voted as marked.  If the proxy
is returned properly signed but without indicating instructions as to the manner
in which  your  shares are to be voted with  respect  to any item  thereon,  the
shares  will be voted in  accordance  with the  recommendations  of our board of
directors.  If your proxy is not  returned,  or if it is returned  unexecuted or
improperly  executed,  your  shares will be voted only if you attend the meeting
and vote in person.

29.  What are the federal income tax consequences of participating in the Plan?

     If you reinvest dividends, you will still be treated for federal income tax
purposes  as having  received  a  dividend  on the  dividend  payment  date.  By
reinvesting  dividends  you will be liable for the  payment of income tax on the
dividends  despite not  receiving  immediate  cash  dividends to satisfy the tax
liability.  In addition,  for reinvested  dividends and optional cash purchases,
you will be generally  treated as having  received a constructive  distribution,
which may give rise to  additional  tax liability to the extent we pay brokerage
commissions  on your  behalf or purchase  shares at a discount.  See the section
entitled "Certain Federal Income Tax Consequences  Associated with Participating
in the Plan" below.

30.  Are  there  any   limitations   of   liability   for  the  company  or  the
     administrator?

     Neither we nor the administrator  (nor any of our or its respective agents,
representatives,  employees,  officers,  directors,  or subcontractors)  will be
liable in administering the Plan for any act done in good faith nor for any good
faith omission to act,  including,  without  limitation,  any claim of liability
arising  from  failure to  terminate  your Plan account upon your death prior to
receipt of notice in writing of such death,  with respect to the prices or times
at which  shares are  purchased  or sold for you or  fluctuations  in the market
value of common stock.  You should recognize that the prices of shares purchased
under the Plan will be  determined  by, and subject to, market  conditions,  and
neither  we nor the  administrator  can  provide  any  assurance  of a profit or
protection against loss on any shares purchased under the Plan.

31.  May the Plan be changed or terminated?

     We may amend,  modify,  suspend or terminate the Plan at any time. You will
be notified by the  administrator  in writing of any  substantial  modifications
made to the Plan. Any amendment may include an appointment by the  administrator
in its place of a successor  administrator  under the terms and  conditions  set
forth  herein,  in which event we are  authorized  to pay the  successor for the
account of each participant,  all dividends and distributions  payable on common
stock held by the participant under the Plan for application by the successor as
provided herein.  Notwithstanding  the foregoing,  this action will not have any
retroactive effect that would prejudice your interests.

     Any amendment, suspension, modification or termination of the Plan will not
affect your rights as a stockholder in any way, and any "book-entry"  shares you
own will continue to be credited to your account with the  administrator  unless
you specifically request otherwise.

     If your Plan account balance falls below one full share, the  administrator
reserves the right to liquidate  your Plan account and remit the proceeds,  less
any  applicable  fees,  to you at your address of record and to  terminate  your
participation in the Plan.

32.  What law governs the Plan?

     The Plan is governed by the laws of the State of Maryland.


                                      -31-


                       RESTRICTIONS ON OWNERSHIP OF SHARES

     Because our board of directors  believes it is essential for us to continue
to  qualify  as a  REIT,  our  charter  documents  contain  restrictions  on the
ownership  and transfer of our capital  stock which are intended to assist us in
complying with the requirements to qualify as a real estate investment trust.

     If our board of directors is, at any time and in good faith, of the opinion
that direct or indirect  ownership of at least 9.9% or more of the voting shares
of stock has or may become concentrated in the hands of one beneficial owner (as
that term is  defined  in Rule  13d-3  under  the  Exchange  Act),  our board of
directors has the power:

     o    by any means deemed  equitable by it to call for the purchase from any
          stockholder  a number of voting shares  sufficient,  in the opinion of
          our board of  directors,  to  maintain or bring the direct or indirect
          ownership of voting shares of stock of the beneficial owner to a level
          of no more than 9.9% of the  outstanding  voting  shares of our stock;
          and

     o    to refuse to  transfer or issue  voting  shares of stock to any person
          whose  acquisition of those voting shares would, in the opinion of our
          board of directors, result in the direct or indirect ownership by that
          person  of more  than  9.9% of the  outstanding  voting  shares of our
          stock.

     Further,  any  transfer of shares,  options,  warrants or other  securities
convertible into voting shares that would create a beneficial owner of more than
9.9% of the  outstanding  shares of our stock shall be deemed void ab initio and
the intended  transferee shall be deemed never to have had an interest  therein.
The purchase price for any voting shares of stock so redeemed shall be equal to:

     o    the fair market  value of the shares  reflected  in the closing  sales
          price  for  the  shares,  if  then  listed  on a  national  securities
          exchange;

     o    the average of the closing sales prices for the shares, if then listed
          on more than one national securities exchange;

     o    if the shares are not then listed on a national  securities  exchange,
          the   latest   bid   quotation   for  the   shares   if  then   traded
          over-the-counter,  on the last business day immediately  preceding the
          day on which notices of the acquisitions are sent; or

     o    if none of these  closing sales prices or  quotations  are  available,
          then the  purchase  price will be equal to the net asset  value of the
          stock as determined  by our board of directors in accordance  with the
          provisions of applicable law.

     From and after the date fixed for purchase by our board of  directors,  the
holder of any  shares so called  for  purchase  shall  cease to be  entitled  to
distributions,  voting  rights and other  benefits with respect to those shares,
except the right to payment of the purchase price for the shares.


                                      -32-



                     CERTAIN FEDERAL INCOME TAX CONSEQUENCES
                    ASSOCIATED WITH PARTICIPATING IN THE PLAN

     Dividends  you  receive on shares of our common  stock that you hold in the
Plan and which are reinvested in newly issued shares will be treated for federal
income tax purposes as a taxable stock  distribution  to you.  Accordingly,  you
will receive taxable dividend income in an amount equal to the fair market value
of the shares of our common stock that you receive on the date we pay  dividends
to the extent we have  current or  accumulated  earnings and profits for federal
income tax  purposes.  We intend to take the position that the fair market value
of the newly  issued  shares  purchased  with  reinvested  dividends  equals the
average of the high and low NYSE prices of our common  stock on the related date
we pay dividends. The treatment described above will apply to you whether or not
the shares are purchased at a discount. On the other hand, dividends you receive
on shares of our common stock that you hold in the Plan, which are reinvested in
shares of our common stock purchased by the  administrator in the open market or
in privately  negotiated  transactions,  will be treated for federal  income tax
purposes  as a  taxable  cash  distribution  to you in an  amount  equal  to the
purchase  price of such shares to the extent that we have current or accumulated
earnings  and  profits  for  federal  income  tax  purposes.  The  portion  of a
distribution  you  receive  that is in excess  of our  current  and  accumulated
earnings  and  profits  will  not  be  taxable  to you if  this  portion  of the
distribution does not exceed the adjusted tax basis of your shares. If a portion
of your distribution exceeds the adjusted tax basis of your shares, that portion
of your distribution will be taxable as a capital gain. If we properly designate
a portion of your  distribution  as a capital gain  dividend,  then that portion
will be reportable  as a capital  gain.  Capital gains will be taxed to you at a
15% or 25% income tax rate,  depending on the tax  characteristics of the assets
which produced such gains,  and on certain other  designations,  if any, that we
may make.

     The Internal Revenue Service has indicated in somewhat  similar  situations
that a participant who participates in the dividend  reinvestment portion of the
Plan and makes an optional  cash purchase of common stock under the Plan will be
treated as having  received a distribution  equal to the excess,  if any, of the
fair market value on the investment date of the common shares over the amount of
the optional  cash payment made by the  participant.  The fair market value will
equal the  average of the high and low NYSE  prices of our  common  stock on the
applicable  investment date. Any distributions  which the participant is treated
as receiving,  including the discount,  would be taxable income or gain or would
reduce his or her basis in common stock, or some combination thereof,  under the
rules described above.

     Under the Plan,  we will bear any  trading  fees or  brokerage  commissions
related to the  acquisition of, but not the sale of, shares of our common stock.
Brokerage  commissions  paid  by a  corporation  with  respect  to  open  market
purchases on behalf of participants in a dividend  reinvestment plan or pursuant
to the  optional  cash  purchase  features  of a plan are  generally  treated as
constructive distributions to the participants, and the payment of these fees or
commissions  is  generally   subject  to  income  tax  in  the  same  manner  as
distributions  and  includable  in the  participant's  cost  basis of the shares
purchased.  Accordingly,  to the extent that we pay brokerage  commissions  with
respect  to  any  open  market  or  privately  negotiated  purchases  made  with
reinvested   dividends  or  optional  cash   purchases  by  the   administrator,
participants will generally be treated as receiving their  proportionate  amount
of the commissions as distributions in addition to the amounts described above.

     Your tax basis in your shares of common stock  acquired  under the dividend
reinvestment  features  of the Plan will  generally  equal  the total  amount of
distributions  you are treated as receiving,  as described above. Your tax basis
in your shares of common stock acquired  through an optional cash purchase under
the Plan will generally equal the total amount of distributions  you are treated
as receiving,  as described above, plus the amount of the optional cash payment.
Your holding  period for the shares of our common stock  acquired under the Plan
will begin on the day  following  the date such shares were  purchased  for your
Plan account.  Consequently,  shares of our common stock  purchased in different
quarters will have different holding periods.


                                      -33-


     You will not  realize any gain or loss when you  receive  certificates  for
whole  shares of our common  stock  credited to your  account,  either upon your
request, when you withdraw from the Plan or if the Plan terminates. However, you
will recognize gain or loss when you sell or exchange whole shares of our common
stock  acquired  under the Plan.  You will also  recognize gain or loss when you
receive a cash  payment for a fractional  share of our common stock  credited to
your Plan account when you withdraw from the Plan or if the Plan terminates. The
amount of your gain or loss will equal the difference between the amount of cash
you receive for your fractional  shares of our common stock, net of any costs of
sale paid by you, and your tax basis of such fractional shares.

     Backup Withholding and Information  Reporting.  In general, we are required
to report to the Internal Revenue Service all actual and  constructive  dividend
distributions to you, unless you are a corporation or other  shareholder  exempt
from  reporting  requirements.  Additionally,  dividends  are  subject to backup
withholding,  currently  at  a  28%  rate,  unless  you  provide  your  taxpayer
identification   number  in  the  manner   prescribed  in  applicable   Treasury
Regulations,  certify  that such  number is  correct,  certify  as to no loss of
exemption  from  backup  withholding,  and meet  certain  other  conditions,  or
otherwise  establish an exemption.  Backup withholding  amounts will be withheld
from dividends before those dividends are reinvested under the Plan.  Therefore,
dividends  to be  reinvested  under the Plan by  participants  subject to backup
withholding  will be reduced  by the backup  withholding  amount.  The  withheld
amounts  will   generally  be  allowed  as  a  refund  or  credit   against  the
participant's   U.S.  federal  income  tax  liability,   provided  the  required
information is furnished to the Internal Revenue Service.

     REIT Taxation. As an owner of shares of a REIT, you will be generally taxed
on distributions made to you (not designated as capital gain dividends),  to the
extent of our earnings  and profits,  at ordinary tax rates of up to 35% (in the
case of a  shareholder  who is an  individual).  Because  we are  not  generally
subject to  federal  income tax on the  portion  of our REIT  taxable  income or
capital gains distributed to our stockholders,  our dividends will generally not
be eligible  for the low 15% tax rate on  dividends  distributed  by regular "C"
corporations. As a result, our ordinary REIT dividends will continue to be taxed
at the higher tax rates applicable to ordinary income. However, the 15% tax rate
for long-term capital gains and dividends will generally apply to:

     o    your long-term capital gains, if any, recognized on the disposition of
          our shares;

     o    our  distributions  designated  as long-term  capital  gain  dividends
          (except to the  extent  attributable  to  "unrecaptured  Section  1250
          gain," in which case such  distributions  would continue to be subject
          to a 25% tax rate);

     o    our dividends  attributable to dividends  received by us from non-REIT
          corporations, such as taxable REIT subsidiaries; and

     o    our dividends to the extent  attributable to income upon which we have
          paid corporate income tax (e.g., to the extent that we distribute less
          than 100% of our taxable income).

     The  foregoing  summary  of  certain  federal  income  tax   considerations
regarding the Plan is based on current law, is for your general information only
and is not tax advice. This discussion does not purport to deal with all aspects
of taxation  that may be relevant  to you in light of your  personal  investment
circumstances,  or if you are a type of investor (including insurance companies,
tax-exempt  organizations,  entities  treated as pass-through  entities for U.S.
federal income tax purposes,  financial institutions or broker-dealers,  foreign
corporations and persons who are not citizens or residents of the United States)
that is subject to special  treatment  under the  federal  income tax laws.


                                      -34-


FOR FURTHER  INFORMATION AS TO THE TAX CONSEQUENCES TO PARTICIPANTS IN THE PLAN,
INCLUDING  STATE,  LOCAL AND FOREIGN TAX  CONSEQUENCES,  YOU SHOULD CONSULT WITH
YOUR OWN TAX  ADVISOR(S).  THE ABOVE  DISCUSSION IS BASED ON FEDERAL  INCOME TAX
LAWS AS IN EFFECT AS OF THE DATE HEREOF.  ALL PARTICIPANTS  SHOULD CONSULT THEIR
TAX ADVISORS WITH RESPECT TO THE IMPACT OF ANY FUTURE  LEGISLATIVE  PROPOSALS OR
LEGISLATION ENACTED AFTER THE DATE OF THIS PROSPECTUS.


                              PLAN OF DISTRIBUTION

     Except to the extent the administrator purchases shares of our common stock
in the open market, we will sell directly to the administrator the shares of our
common stock  acquired  under the Plan.  There are no brokerage  commissions  in
connection with the purchases of such newly issued shares of our common stock.

     In connection with the  administration  of the Plan, we may be requested to
approve  investments  made  pursuant to  requests  for waiver by or on behalf of
participants or other investors who may be engaged in the securities business.

     Persons who acquire shares of common stock through the Plan and resell them
shortly after  acquiring  them,  including  coverage of short  positions,  under
certain circumstances, may be participating in a distribution of securities that
would  require  compliance  with  Regulation M under the Exchange Act and may be
considered to be underwriters  within the meaning of the Securities Act. We will
not extend to any such person any rights or privileges other than those to which
it would be entitled as a participant, nor will we enter into any agreement with
any such person  regarding the resale or  distribution by any such person of the
shares of our common stock so purchased.  We may,  however,  accept  investments
made pursuant to requests for waiver by such persons.

     You will only be responsible  for a transaction fee and your pro rata share
of trading  fees and any  brokerage  commissions  associated  with your sales of
shares of common stock  attributable  to you under the Plan. We will pay for all
fees and  commissions  associated with your purchases under the Plan. Our common
stock is listed on the NYSE under the symbol "OHI."

     Pursuant  to the  Plan,  we may  be  requested  to  approve  optional  cash
purchases in excess of the allowable  maximum  amounts  pursuant to requests for
waiver on behalf of participants that may be engaged in the securities business.
In deciding whether to approve this request,  we will consider  relevant factors
including, but not limited to:

     o    our need for additional funds;

     o    the  attractiveness  of  obtaining  these  funds by the sale of common
          stock under the Plan in comparison to other sources of funds;

     o    the purchase price likely to apply to any sale of common stock;

     o    the  participant  submitting  the  request,  including  the extent and
          nature of the  participant's  prior  participation in the Plan and the
          number of shares of common  stock  held of record by the  participant;
          and


                                      -35-


     o    the aggregate  number of requests for waiver that have been  submitted
          by all participants.

     From time to time, financial intermediaries, including brokers and dealers,
and other  persons may engage in  positioning  transactions  in order to benefit
from any waiver  discounts  applicable to investments  made pursuant to requests
for waiver under the Plan.  Those  transactions  may cause  fluctuations  in the
trading  volume of our common  stock.  Financial  intermediaries  and such other
persons who engage in positioning transactions may be deemed to be underwriters.
We have no arrangements or understandings,  formal or informal,  with any person
relating  to the sale of shares of our  common  stock to be  received  under the
Plan. We reserve the right to modify, suspend or terminate  participation in the
Plan by otherwise eligible persons to eliminate  practices that are inconsistent
with the purpose of the Plan.

                                 USE OF PROCEEDS

     We are  unable to predict  the  number of shares of common  stock that will
ultimately be sold under the Plan, the prices at which such shares will be sold,
or the  number  of such  shares,  if any,  that  will be sold by us from the our
authorized but unissued  shares of common stock.  Therefore,  we cannot estimate
the amount of  proceeds  to be  received  from the sale of such  shares.  To the
extent that shares of common  stock are sold from our  authorized  but  unissued
shares of common stock,  the proceeds of such sales will be added to our general
funds and will be used for  funding of real  estate  investments  or for general
corporate purposes.

                              AVAILABLE INFORMATION

     We are subject to the  informational  requirements  of the Exchange Act and
file  annual,   quarterly  and  current  reports,  proxy  statements  and  other
information with the SEC. You may read and copy any reports, statements or other
information that we file with the SEC at the SEC's public reference rooms at 450
Fifth  Street,   N.W.,   Washington,   D.C.  20549.   Please  call  the  SEC  at
1-800-SEC-0330  for further  information on the public  reference rooms. Our SEC
filings are also  available  to the public from  commercial  document  retrieval
services and free of charge at the website maintained by the SEC at www.sec.gov.

     We have filed with the SEC a  registration  statement  on Form S-3,  or the
registration  statement,  under the  Securities  Act. This  prospectus  does not
contain all the information  set forth in the  registration  statement,  certain
parts of which are omitted in accordance  with the rules and  regulations of the
SEC.  For further  information,  reference  is hereby  made to the  registration
statement.

                     INCORPORATION OF DOCUMENTS BY REFERENCE

     The SEC  allows us to  "incorporate  by  reference"  information  into this
prospectus,  which means that we can disclose  important  information  to you by
referring  you to another  document we have filed  separately  with the SEC. The
information  incorporated by reference is deemed to be part of this  prospectus,
except for any information  superseded by information contained directly in this
prospectus.  This  prospectus  incorporates by reference the documents set forth
below that we have previously filed with the SEC (File No. 001-11316) as well as
any filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this  prospectus and prior to the termination
of this offering,  other than information or reports  furnished to the SEC under
Items 2.02 and 7.01 of Current Reports on Form 8-K:


                                      -36-


     o    Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          2003;

     o    Quarterly  Reports on Form 10-Q for the  quarterly  periods ended
          September 30, 2004, June 30, 2004 and March 31, 2004;

     o    Current  Reports on Form 8-K filed on  November  9, 2004,  November 8,
          2004, October 29, 2004,  October 29, 2004, October 26, 2004*,  October
          18, 2004,  September 16, 2004, July 27, 2004*, May 24, 2004, April 27,
          2004*,  March 26, 2004,  March 11, 2004, March 8, 2004, March 4, 2004,
          February 23, 2004,  February 10, 2004,  February 5, 2004,  February 5,
          2004, January 29, 2004*, and January 27, 2004*; and

     o    The   description  of  our  common  stock  contained  in  our  initial
          registration  statement  on Form 8-A,  filed  under  Section 12 of the
          Exchange  Act,  and  declared  effective by the SEC on August 7, 1992,
          together  with any  amendment or report filed  subsequent  to the date
          hereof  for  the  purpose  of  updating  such  description  (File  No.
          001-11316). 
____________________________

     *    These reports contain information furnished to the SEC under Item 2.02
          and/or Item 7.01 of Form 8-K which,  pursuant to General  Instructions
          B(2) and (6) of Form 8-K, is not deemed to be "filed" for  purposes of
          Section  18 of  the  Exchange  Act  and  we  are  not  subject  to the
          liabilities imposed by that section. We are not incorporating and will
          not  incorporate  by  reference  into this  prospectus  past or future
          information or reports  furnished or that will be furnished under Item
          2.02 and/or Item 7.01 of Form 8-K.

     These  documents   contain   important   information  about  our  financial
condition.  You may obtain copies of any documents  incorporated by reference in
this  prospectus  from us, from the SEC or from the SEC's  website as  described
above. Documents incorporated by reference are available from us without charge,
excluding  exhibits  thereto,  unless  we  have  specifically   incorporated  by
reference such exhibits in this prospectus. Any person, including any beneficial
owner, to whom this prospectus is delivered may obtain documents incorporated by
reference in, but not delivered with, this prospectus by requesting them from us
in writing or by telephone at Omega Healthcare Investors, Inc., Attention: Chief
Financial  Officer,  9690 Deereco Road,  Suite 100,  Timonium,  Maryland  21093,
telephone  number  (410)  427-1700.  You may also access our SEC filings free of
charge on our website at  www.omegahealthcare.com,  under the tab entitled  "SEC
Filings."

                                  LEGAL MATTERS

     The  legality of the shares of common stock being  offered  hereby has been
passed upon for us by Argue Pearson Harbison & Myers,  Los Angeles,  California.
In addition,  Powell Goldstein LLP,  Atlanta,  Georgia,  has passed upon certain
federal income tax matters.

                                     EXPERTS

     The  consolidated  financial  statements and schedules of Omega  Healthcare
Investors,  Inc.  appearing in Omega  Healthcare  Investors,  Inc. Annual Report
(Form 10-K) for the year ended  December 31, 2003,  have been audited by Ernst &
Young LLP, independent  registered public accounting firm, as set forth in their
report  thereon  included  therein and  incorporated  herein by reference.  Such
consolidated  financial  statements  and  schedules are  incorporated  herein by
reference in reliance  upon such report  given on the  authority of such firm as
experts in accounting and auditing.


                                      -37-


                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

     The following is a statement of estimated  expenses in connection  with the
distribution of the shares of our common stock being  registered  hereby,  other
than underwriting discounts and commissions, if any:

SEC Registration Fee...................................................$0.00
Accounting Fees and Expenses........................................5,000.00
Legal Fees and Expenses............................................10,000.00
Miscellaneous.......................................................1,000.00
Total.............................................................$16,000.00
                                                                  ==========

     The foregoing items, except for the SEC Registration Fee, are estimated.


Item 15..Indemnification of Directors and Officers.

     The  articles of  incorporation  and bylaws of the  registrant  provide for
indemnification  of  directors  and  officers  to the full extent  permitted  by
Maryland law.

     Section  2-418 of the  General  Corporation  Law of the  State of  Maryland
generally permits indemnification of any director or officer with respect to any
proceedings  unless  it is  established  that:  (a) the act or  omission  of the
director or officer was material to the matter giving rise to the proceeding and
was  either  committed  in bad  faith or the  result  of  active  or  deliberate
dishonesty;  (b) the director or officer actually  received an improper personal
benefit  in  money,  property  or  services;  or (c) in the  case of a  criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. The indemnity may include judgments, penalties, fines,
settlements,  and  reasonable  expenses  actually  incurred  by the  director or
officer in connection  with the  proceedings.  However,  a  corporation  may not
indemnify a director or officer who shall have been adjudged to be liable to the
corporation, or who instituted a proceeding against the corporation (unless such
proceeding was brought to enforce the charter,  bylaws,  or the  indemnification
provisions thereunder).  The termination of any proceeding by judgment, order or
settlement  does not create a  presumption  that the director or officer did not
meet the requisite  standard of conduct required for permitted  indemnification.
The  termination of any proceeding by conviction,  or plea of nolo contendere or
its equivalent, or an entry of an order of probation prior to judgment,  creates
a rebuttable presumption that the director or officer did not meet that standard
of conduct.

     The registrant has also entered into indemnity agreements with the officers
and directors of the registrant that provide that the registrant  will,  subject
to certain  conditions,  pay on behalf of the indemnified party any amount which
the indemnified  party is or becomes legally obligated to pay because of any act
or omission or neglect or breach of duty,  including any actual or alleged error
or misstatement or misleading statement,  which the indemnified party commits or
suffers  while  acting  in  the  capacity  as an  officer  or  director  of  the
registrant.  Once an  initial  determination  is made by the  registrant  that a
director  or  officer  did not act in bad  faith or for  personal  benefit,  the
indemnification  provisions  contained in the  charter,  bylaws,  and  indemnity


                                      II-1


agreements  would  require the  registrant  to advance any  reasonable  expenses
incurred  by the  director  or  officer,  and to pay the costs,  judgments,  and
penalties  determined  against a director  or officer  in a  proceeding  brought
against them.

     Insofar as indemnification for liabilities arising under the Securities Act
is  permitted  to  directors  and  officers  of the  registrant  pursuant to the
above-described provisions, the registrant understands that the Commission is of
the opinion  that such  indemnification  contravenes  federal  public  policy as
expressed in said act and therefore is unenforceable.


Item 16.        Exhibits.


Exhibit
Number          Description
-------         -----------

     5.1  Opinion of Argue Pearson Harbison & Myers regarding legality of
          securities (previously filed).

     8.1  Opinion of Powell Goldstein LLP regarding certain tax matters.

     23.1 Consent of Independent Registered Public Accounting Firm.

     23.2 Consent of Argue Pearson Harbison & Myers (included in Exhibit 5.1)

     23.3 Consent of Powell Goldstein LLP (included in Exhibit 8.1)

     24.1 Power of Attorney (included on Signature Page).

     99.1 Stock Purchase Initial Enrollment Form for Omega Healthcare Investors,
          Inc. Dividend Reinvestment and Common Stock Purchase Plan.

     99.2 Enrollment  Authorization  Form for Omega Healthcare  Investors,  Inc.
          Dividend Reinvestment and Common Stock Purchase Plan.

     99.3 Voluntary Cash Payment Enrollment Form for Omega Healthcare Investors,
          Inc. Dividend Reinvestment and Common Stock Purchase Plan.

     99.4 Form of  Request  for  Waiver  for Omega  Healthcare  Investors,  Inc.
          Dividend Reinvestment and Common Stock Purchase Plan.

     99.5 Form of Letter to Stockholders of Omega Healthcare Investors, Inc.


Item 17.        Undertakings.

The undersigned registrant hereby undertakes:

1.   To file,  during  any  period in which  offers or sales are being  made,  a
     post-effective amendment to this registration statement:

     (a)  To  include  any  prospectus  required  by  Section  10(a)(3)  of  the
          Securities Act of 1933, unless the information required to be included
          in such  post-effective  amendment is  contained in a periodic  report
          filed by  registrant  pursuant  to Section 13 or Section  15(d) of the
          Securities Exchange Act of 1934 and incorporated herein by reference;


                                      II-2


     (b)  To reflect in the  prospectus  any facts or events  arising  after the
          effective  date of the  registration  statement  (or the  most  recent
          post-effective  amendment  thereof)  which,  individually  or  in  the
          aggregate, represent a fundamental change in the information set forth
          in the registration  statement,  unless the information required to be
          included in such  post-effective  amendment is contained in a periodic
          report filed by registrant  pursuant to Section 13 or Section 15(d) of
          the  Securities  Exchange  Act of  1934  and  incorporated  herein  by
          reference.  Notwithstanding the foregoing, any increase or decrease in
          volume of securities  offered (if the total dollar value of securities
          offered would not exceed that which was  registered) and any deviation
          from the low or high end of the estimated  maximum  offering range may
          be  reflected  in the form of  prospectus  filed  with the  Commission
          pursuant  to Rule 424(b) if, in the  aggregate,  the changes in volume
          and price represent no more than a 20% change in the maximum aggregate
          offering  price set forth in the  "Calculation  of  Registration  Fee"
          table in the effective registration statement; and

     (c)  To  include  any  material  information  with  respect  to the Plan of
          distribution not previously disclosed in the registration statement or
          any material change to such information in the registration statement.

2.   That, for the purpose of determining any liability under the Securities Act
     of 1933,  each such  post-effective  amendment  shall be deemed to be a new
     registration  statement relating to the securities offered therein, and the
     offering of such  securities at that time shall be deemed to be the initial
     bona fide offering thereof.

3.   To remove from  registration by means of a post-effective  amendment any of
     the securities  being  registered which remain unsold at the termination of
     the offering.

4.   That, for purposes of determining any liability under the Securities Act of
     1933,  each filing of the  registrant's  annual report  pursuant to Section
     13(a) or  Section  15(d) of the  Securities  Exchange  Act of 1934  that is
     incorporated by reference in the registration  statement shall be deemed to
     be a new registration statement relating to the securities offered therein,
     and the offering of such  securities at that time shall be deemed to be the
     initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
registrant pursuant to the foregoing provisions referred to in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and  Exchange  Commission  such  indemnification  is  against  public  policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for  indemnification  against  such  liabilities  (other than the payment by the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


                                      II-3


                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that  it  has  reasonable   grounds  to  believe  it  meets  all  the
requirements  for  filing  on Form S-3 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of  Timonium,  State of  Maryland,  on this 23rd day of
November 2004.


                                        OMEGA HEALTHCARE INVESTORS, INC.


                                        By:/s/C. Taylor Picket
                                           -----------------------
                                           C. Taylor Picket
                                           Chief Executive Officer




                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE  PRESENTS,  that each  person who  signature  appears
below  constitutes and appoints C. Taylor Pickett and Robert O.  Stephenson,  or
either of them,  his true and lawful  attorneys-in-fact  and  agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any  and  all  capacities,  to  sign  any or all  amendments  to this
Registration Statement and to file the same, with all exhibits thereto and other
documents in connection therewith,  with the Securities and Exchange Commission,
granting  unto  either of said  attorneys-in-fact  and  agents,  full  power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully as to all intents and purposes as
he might or could do in person,  hereby ratifying and confirming all that either
of said  attorneys-in-fact  and agents, or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.



     Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,
this  Registration  Statement has been signed below by the following  persons in
the capacities indicated and on the date indicated.





              Signature                                         Position                                Date
              ---------                                         --------                                ----

        /s/ C. Taylor Pickett
---------------------------------------
                                                                                                         
          C. Taylor Pickett                Chief Executive Officer and Director                   November 23, 2004
                                           (Principal Executive Officer)

       /s/ Robert O. Stephenson
---------------------------------------
         Robert O. Stephenson              Chief Financial Officer                                November 23, 2004
                                           (Principal Financial and Accounting Officer)

        /s/ Bernard J. Korman
---------------------------------------
          Bernard J. Korman                Chairman of the Board of Directors                     November 23, 2004


         /s/ Thomas S. Franke
---------------------------------------
           Thomas S. Franke                Director                                               November 23, 2004


      /s/ Harold J. Kloosterman
---------------------------------------
        Harold J. Kloosterman              Director                                               November 23, 2004


         /s/ Edward Lowenthal
---------------------------------------
           Edward Lowenthal                Director                                               November 23, 2004


         /s/ Stephen D. Plavin
---------------------------------------
          Stephen D. Plavin                Director                                               November 23, 2004






                                  EXHIBIT INDEX

Exhibit
Number          Description
-------         -----------

     5.1  Opinion of Argue Pearson Harbison & Myers regarding legality of
          securities (previously filed).

     8.1  Opinion of Powell Goldstein LLP regarding certain tax matters.

     23.1 Consent of Independent Registered Public Accounting Firm.

     23.2 Consent of Argue Pearson Harbison & Myers (included in Exhibit 5.1)

     23.3 Consent of Powell Goldstein LLP (included in Exhibit 8.1)

     24.1 Power of Attorney (included on Signature Page).

     99.1 Stock Purchase Initial Enrollment Form for Omega Healthcare Investors,
          Inc. Dividend Reinvestment and Common Stock Purchase Plan.

     99.2 Enrollment  Authorization  Form for Omega Healthcare  Investors,  Inc.
          Dividend Reinvestment and Common Stock Purchase Plan.

     99.3 Voluntary Cash Payment Enrollment Form for Omega Healthcare Investors,
          Inc. Dividend Reinvestment and Common Stock Purchase Plan.

     99.4 Form of  Request  for  Waiver  for Omega  Healthcare  Investors,  Inc.
          Dividend Reinvestment and Common Stock Purchase Plan.

     99.5 Form of Letter to Stockholders of Omega Healthcare Investors, Inc.