Buying an Assisted Living Facility
Why Searchers Target Assisted Living
Assisted living rides the clearest demographic tailwind in small business: the over-80 population is climbing for two decades, and someone has to house and care for them. The field spans two buyable shapes, a small residential care home of roughly six to sixteen beds licensed as an RCFE, board-and-care, or adult family home, and a larger purpose-built community; searchers usually buy the residential end or a single community. Demand is non-discretionary and mostly private-pay, and the field is thousands of small licensed operators, so exits are common. The catch is that this is a licensed care business inside a real-estate asset, so a buyer underwrites both the operation and the building and inherits a state care standard.
What Assisted Living Trades For
Sold assisted living and nursing home listings put half the market between 2.42x and 5.87x SDE across 2021 to 2025, with a 3.90x median, a $610,000 median sale price, and revenue at 0.66x to 1.97x. The spread is wide because the class blends two deals: most small residential care homes sell with the house, so the multiple carries real estate, while an operating company sold without the building prices well below it. Institutional communities are quoted instead on a cap rate against net operating income, and no publisher of sold data prints an EBITDA multiple for this trade. Read occupancy, the private-pay share, and whether the building conveys before crediting any multiple.
Occupancy and Payer Mix
Two numbers set the value: how full the building is and who pays. Occupancy is the operating leverage, since most costs are fixed, so a stabilized facility above 90% with a waitlist earns core pricing while one below 80% prices as distressed. Payer mix is the margin. Private-pay residents pay operator-set rates that reset annually, while Medicaid, where a state allows it for residential care, pays a fixed low rate that moves with budgets. So a private-pay-heavy book prices above a Medicaid-dependent one at the same occupancy. Read the rent roll for occupancy trend, private-pay share, average rate, and length of stay before anchoring on the trailing number.
The License, the Building, and the Care Model
Three constraints decide whether the facility runs after close. The license is first: the state residential care license is tied to a named licensee and does not automatically transfer, so a change of ownership needs state approval and a qualified, certified administrator, which is the gating item and the long pole in timing. The building is second: the real estate usually conveys with the business under one loan, so read the physical plant, code and life-safety compliance, and deferred capex. The care model is third: staffing ratios, the level of care licensed (assisted living versus memory care), and any medication-management and incident history set both the cost base and the regulatory risk a buyer inherits.
What to Verify in Diligence
The record to assemble before the offer holds:
- Stabilized occupancy, the trend, and any waitlist
- Private-pay share versus Medicaid, average rate, and length of stay
- Residential care license transfer, state approval timeline, and administrator certification
- Real-estate condition, life-safety and code compliance, and deferred capex
- Staffing ratios, the care level licensed, and wage pressure
- Survey, citation, and incident history with the state regulator
- Whether the building conveys or a lease transfers, and its terms
Financeability Notes
Assisted living finances well under the SBA 7(a), which funds the business and the real estate in a single loan; SBA treats assistance with daily living as sufficient care, so a licensed nurse on staff is not required. Expect underwriting to weigh the license transfer, since a facility that cannot re-license under the buyer cannot operate, and to read occupancy, payer mix, and the building's condition. Model debt service net of a market wage for an administrator and care staff if the seller runs the floor, and net of the real-estate capex the building needs. The risk to underwrite is an occupancy drop or a Medicaid rate cut a private-pay strategy must offset, so confirm the rent roll and the license path, not just the trailing margin.
Terms in This Industry
Move-in and move-out pace
How many residents arrive and leave in a month, under a stable occupancy figure.
Residential care license
The state license to house and assist elderly residents, tied to a person, a building, and a bed count.
Private pay
Families paying from their own funds, which is most of this trade because Medicaid rarely covers it.
Level of care fees
Charges added above base rent as a resident needs more help, and where the growth is.
Transferor liability
Florida law makes the seller responsible for lawful operation until the buyer's license issues.
Acuity creep
Residents needing more care over time without the fee moving to match it.
Hours before independent work
California requires half a caregiver's 40 training hours done before working alone with residents.
What the Data Says
BizBuySell's assisted living and nursing home benchmarks put sold earnings multiples at 2.42x lower quartile, 3.90x median, 4.25x average and 5.87x upper quartile across 2021 through 2025, on a $610,000 median sale price. Licensed beds and the building often sell together, which is what the top of that spread is carrying.
Source: BizBuySell, assisted living and nursing home benchmarks
The same sold series puts revenue multiples from 0.66x lower quartile to 1.97x upper quartile around a 1.16x median and a 1.35x average, at 203 median days on market. The page notes the median has been volatile since the pandemic and trending down over the period. Single-home operations and multi-unit facilities blend in these figures.
Source: BizBuySell, assisted living and nursing home revenue benchmarks
SBA eligibility here is a TWO-part test and both halves have to hold. The business must be licensed as a nursing home or assisted living facility AND provide healthcare or medical services. The SBA illustrates that with wellness checks, help taking medications, blood sugar monitoring, or medical staff onsite even part time. The lender is told to read the terms of the license itself, so get that read before spending money on the deal.
Source: SBA SOP 50 10 8, effective 1 June 2025, business eligibility
This industry ranks in the Metro Target Scans for Los Angeles: strong lending volume and survival on the government's own record.
Lender context, from the SBA loan-level file: Pinnacle Bank (CA) (48), Live Oak Banking Company (45), Celtic Bank Corporation (27) wrote the most of this industry's 340 acquisition approvals. A bank that knows the trade says yes faster; the ranking for every industry is on Most Active Lenders by Industry.
Holding a live deal in this industry? Underwrite it with the comps, cited band, and charge-off rate pre-loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- American House Senior Living Communities · Southfield, Michigan
Senior living operator that buys single communities as well as portfolios, and names the seller community and its unit count in its own announcements.
- St. Anthony's Senior Living · 2026 · A 192-unit Kansas City community, independent living plus assisted living and memory care.
- 1 more confirmed on the firm's profile
- Otterbein SeniorLife · Lebanon, Ohio
A not-for-profit Ohio senior living group that takes over whole communities from other operators, including one run by a hospital system and one from a larger not-for-profit.
- Ohio Living Lake Vista · 2025 · A Life Plan Community with independent apartments and villas, assisted living, short-term rehab and skilled nursing.
- 2 more confirmed on the firm's profile
Buyers is the shelf these come from, ordered by who closed something most recently.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the administrator of a clinic or care facility, paid a median of $123,860 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $371,580 off what the business is worth to you.
Medical and health services managers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
The Numbers That Run This Business
- Stabilized occupancy and the trend
- Private-pay share versus Medicaid
- Average rate and resident length of stay
- License transfer path and administrator certification
- Real-estate condition and deferred capex