What Is Your Sober Living Home Worth? EBITDA Multiples Explained
Recovery residences typically sell at 2.5x–4.5x EBITDA. Occupancy stability, licensing status, and owner independence drive where your deal lands.
Sober living homes in the lower middle market trade between 2.5x and 4.5x EBITDA, with most deals clustering around 3.0x–3.5x. Revenue typically ranges from $500K to $3M. Valuation is heavily influenced by occupancy consistency, NARR or state certification, payer mix, and whether the business can operate without the owner. Real estate may be valued separately, adding significant asset value to a transaction.
Sober Living Home EBITDA Multiple Ranges by Tier
| Business Tier | EBITDA Range | Multiple Range | Notes |
|---|---|---|---|
| Distressed or Non-Certified | $50K–$150K | 2.0x–2.5x | Unlicensed or chronically low occupancy homes with owner-dependent operations and informal financials. High buyer risk commands a discount. |
| Stabilized Small Operator | $150K–$300K | 2.5x–3.5x | Single or dual-property home with 70%+ occupancy, basic documentation, and state certification. Suitable for SBA 7(a) financing with seller carryback. |
| Strong Performing Platform | $300K–$600K | 3.5x–4.0x | Multi-property operator with certified homes, diverse payer mix, trained staff, and documented SOPs. Attractive to behavioral health roll-up buyers. |
| Institutional-Grade Operation | $600K+ | 4.0x–4.5x | Scaled operation with owned real estate, insurance billing, waitlists, and owner-independent management. Targets private equity recovery platforms. |
What Drives Sober Living Home Multiples
Occupancy Rate Stability
High impactBuyers require 70%+ average occupancy over trailing 12 months. Documented waitlists and low turnover significantly increase multiple and reduce earnout requirements.
Licensing and Certification Status
High impactNARR certification or state-recognized compliance signals legitimacy, unlocks insurance partnerships, and creates a competitive moat that directly supports premium multiples.
Owner Dependency
High impactHomes where the owner handles intake, crisis response, and resident relationships are heavily discounted. A trained house manager running daily ops is a major value driver.
Payer Mix and Revenue Diversification
Medium impactPrivate pay combined with insurance billing and government partnerships reduces revenue volatility. Pure private-pay homes face discount risk from buyer uncertainty.
Real Estate Ownership or Lease Terms
Medium impactOwned residential property or a long-term below-market lease significantly reduces buyer risk, supports SBA financing, and can add 20–40% to total transaction value.
Recent Market Trends
Private equity-backed recovery platforms are actively acquiring certified sober living operators in 2024–2025, compressing cap rates on quality assets. SBA lenders are increasingly comfortable with licensed recovery residences. Local zoning opposition is creating scarcity value for established homes in residential neighborhoods, supporting multiple expansion for compliant, long-operating properties.
Sample Sober Living Home Transactions
Women's 12-bed certified sober living home, 85% occupancy, private pay, trained house manager, 3-year operating history, mid-size southeastern city.
$210,000
EBITDA
3.2x
Multiple
$672,000
Price
Men's dual-property sober living operation, 24 beds total, NARR-certified, mixed private pay and insurance billing, SOP-documented, owner transitioning out.
$390,000
EBITDA
3.8x
Multiple
$1,482,000
Price
Multi-property recovery residence platform, 5 homes, 60 beds, owned real estate, insurance contracts, waitlist demand, full management team in place.
$720,000
EBITDA
4.2x
Multiple
$3,024,000
Price
EBITDA Valuation Estimator
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Industry: Sober Living Home · Multiples based on 2.5x–3.5x (Stabilized Small Operator)
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Frequently Asked Questions
What EBITDA multiple should I expect when selling my sober living home?
Most sober living homes sell between 2.5x and 4.5x EBITDA. Certified, high-occupancy homes with trained staff and clean financials command the upper range.
Does owning the real estate increase my sober living home's valuation?
Yes. Owned property is typically valued separately using cap rates or comparable sales and adds significant total transaction value beyond the business operating multiple.
Will a buyer use SBA financing to acquire my sober living business?
Yes. SBA 7(a) loans are commonly used for licensed sober living acquisitions. Clean financials, transferable licenses, and stable occupancy are required for lender approval.
What kills value in a sober living home sale?
Chronic low occupancy, unlicensed operations, owner dependency, informal financials, and any history of regulatory complaints or zoning disputes will reduce your multiple significantly.
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