How much does a Sober Living Home cost to buy?

A typical Sober Living Home sells for 2x to 4x seller's discretionary earnings. With estimated SDE of $38K, expect to pay roughly $75K to $150K before adjustments for assets, debt, growth, and local market quality.

How much does it cost to start a Sober Living Home?

Startup costs range from $30K to $150K depending on location, equipment, and scale.

Service

Sober Living Home

Q: What are the profit margins for a Sober Living Home?

The average profit margin for a Sober Living Home is around 25%. Primary costs: lease or mortgage on the property, house manager salary ($1,500–$3,000/month), utilities, food (if included), insurance, and certification/compliance costs. A well-run 10-bed home typically runs $8K–$12K/month in operating costs against $12K–$18K/month in revenue at 80% occupancy, producing $4K–$6K/month in operating cash flow per house.

A residential recovery house that earns $8K–$20K/month per property — and serves a genuine need

Bottom line

Worth studying, but do not buy without strong local proof.

Sober living homes (also called recovery residences or halfway houses) are shared housing environments for people in recovery from addiction, typically following inpatient treatment or incarceration. Residents pay weekly or monthly rent — usually $600–$1,500/month per bed — and follow house rules (sobriety, meetings, curfews) in exchange for structured, supportive housing. A 6–12 bed house generates $4K–$18K/month in gross revenue at 70–80% occupancy. Operating margins of 20–35% are typical at stabilization. Unlike residential rentals, sober living is treated as shared housing under the Fair Housing Act, reducing regulatory burden — most states require no clinical license for a basic sober living home. The US addiction recovery market is estimated at $42B and growing, and housing is one of the most critical bottlenecks.

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Acquisition score

Strong

Avg Revenue

$150K

Profit Margin

25%

Acquisition Multiple

2x - 4x

Startup Cost

$30K - $150K

How It Works

An operator leases or purchases a single-family home or duplex in a residential neighborhood and converts it into a structured recovery residence. Residents are referred by treatment centers, courts, parole officers, and online platforms like Sober Living Network and Addiction.com. Each resident pays weekly or monthly rent, with rates varying by market ($600–$1,500/month). Operators hire a house manager (often a person in recovery) to enforce house rules, manage intake, and handle daily operations. Revenue scales by adding properties. Well-run multi-property operators build referral pipelines with local treatment centers and court systems, creating reliable census flow and stable occupancy. State-level certification (NARR, Oxford House affiliation) unlocks additional referral channels.

Revenue Range

Low End

$60K

Typical

$150K

High End

$350K

Real Acquisitions in This Category

SBA 7(a) change-of-ownership loans · NAICS 623220 · Residential Mental Health and Substance Abuse Facilities

Deals tracked

7 in last 24 mo

Median loan

$1.5M

$343K–$2.4M p25/p75

Implied deal size

$1.8M

median · ~85% LTV

Charge-off rate

—

not enough resolved loans

Deal Size Distribution

<$150K

$150K–500K

$500K–1M

$1M–2M

>$2M

Deal Flow Over Time

12-month momentum

+150.0%

deal volume vs prior 12 mo

Median loan Δ

-38.7%

5 recent · 2 prior

Financing Profile

Median rate

9.75%

0% fixed · last 24 mo

Median term

120 mo

standard 10-yr

Collateralized

of loans secured

Median jobs

supported per deal

Top lenders in this space

Live Oak Banking Company8

LendingClub Bank, National Association2

Byline Bank2

Celtic Bank Corporation2

FinWise Bank1

Where deals happen

CA5

UT2

KS2

MN2

NJ2

CO2

SC1

AZ1

MI1

FL1

Recent Comparable Deals

Closed	State	Loan	Implied deal	Jobs	Franchise
Mar 2026	CA	$2.0M	$2.4M	20	—
Jan 2026	UT	$2.0M	$2.4M	14	—
Dec 2025	FL	$1.5M	$1.8M	25	—
Jul 2025	MI	$1.2M	$1.4M	8	—
Jun 2025	CA	$506K	$595K	5	—
Feb 2025	CO	$350K	$412K	35	—
Feb 2025	CO	$4.7M	$5.5M	35	—
Apr 2024	NJ	$2.4M	$2.8M	23	—
Apr 2024	NJ	$75K	$88K	23	—
Mar 2024	MN	$3.1M	$3.6M	90	—

Volume rank #265/544Deal-size rank #48/544Momentum rank #27p90 loan: $3.6MData as of Mar 2026

Source: SBA 7(a) FOIA dataset, filtered to acquisitions (loans where business age is "Change of Ownership"). Implied deal size assumes an 85% loan-to-purchase ratio, a common SBA change-of-ownership structure. Charge-off rate shown only when 10+ loans have resolved (paid in full or charged off). Interest rates reflect last 24 months only. Actual deal values vary with equity injections, seller financing, and working capital terms.

Pros

+Evergreen demand: 21 million Americans struggle with substance use disorders — demand for recovery housing is chronic and structural
+Recession-resistant: addiction does not follow economic cycles; court and treatment center referrals continue through downturns
+FHA protections: sober living residents are protected as a class under the Fair Housing Act — municipalities cannot zone out recovery residences with the same tools used for commercial facilities
+Strong cash yield: a 10-bed house at $900/month per bed and 80% occupancy generates $86K/year gross on a property that may cost $1,500–$2,500/month to lease

Cons

-Community opposition: NIMBY resistance can be intense in some neighborhoods, requiring careful site selection and proactive community engagement
-Operational intensity: house management requires 24/7 availability for crises, rule violations, and emergency situations — not truly passive
-Relapse risk: resident relapses create disruptions and turnover, requiring constant intake pipeline and a strong house manager
-Regulatory patchwork: state-level certification requirements, insurance needs, and local zoning vary significantly by market

Best For

Mission-driven operators with real estate access or community connections; also viable as a portfolio play for landlords willing to accept operational complexity in exchange for 2–3x the rent of a standard residential lease

Operating Costs

Primary costs: lease or mortgage on the property, house manager salary ($1,500–$3,000/month), utilities, food (if included), insurance, and certification/compliance costs. A well-run 10-bed home typically runs $8K–$12K/month in operating costs against $12K–$18K/month in revenue at 80% occupancy, producing $4K–$6K/month in operating cash flow per house.

SBA Financing Estimator

Adjust the deal — see if it cash flows after debt service

$-5212/mo

after debt service

Deal price — $750K

Range: $230K (2×) to $750K (4×+)

Down payment — 15% ($113K)

SBA minimum equity injection is 10% for change-of-ownership

Interest rate — 9.75%

SBA median for this category: 9.8%

Loan term — 10 years (120 mo)

SBA median for this category: 120 months

Down payment

$113K

15% equity injection

Loan amount

$638K

85% SBA-financed

Monthly payment

$8K/mo

$363K total interest

Monthly profit

$3K/mo

at 25% margin

Monthly cash flow after debt service

$-5212/mo

Margin does not cover debt service at these terms. Lower the deal price, increase the down payment, or extend the loan term.

Estimates only. Excludes owner compensation, capex, working capital draws, and taxes. Margin assumes average occupancy and volume. Actual SBA terms vary by lender and borrower profile.