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BIZBITE

Water Damage Restoration

The business that gets called the minute disaster strikes — and insurance pays the bill

Bottom line

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

Water damage restoration companies respond to burst pipes, floods, and sewage backups — extracting water, drying structures, and restoring property. The secret: insurance pays. Most jobs are billed directly to homeowner's insurance with virtually no price resistance from the customer. A single water loss can generate $5K–$30K in revenue. Companies with strong insurance adjuster relationships and 24/7 availability build massive recurring pipelines from referrals alone.

Acquisition score
Margin · multiple · SBA data
54Strong
Avg revenue
$1.2M/yr
$400K–$5M range
Profit margin
22%
~$264K SDE
Multiple
2.5–5×
of SDE
Est. buy price
$660K–$1.3M
startup: $60K–$200K

How It Works

When water damage occurs, homeowners call their insurance company, which dispatches a restoration firm. Companies market to insurance adjusters, plumbers, and property managers for referrals. Crews arrive within hours, extract water, place industrial dryers, and document everything for insurance billing. Full reconstruction (higher margin) follows mitigation.

BizBite verdict

Watch / verify

Water Damage Restoration has enough high-level data for a first look, but BizBite has not assigned a category-specific operating model yet. Treat the score as preliminary.

54Strong
medium data confidence · 52/100medium financing fit

Why it may work

  • +SBA dataset shows 35 recent comparable loans

Be careful

  • !Source link status has not been verified yet
  • !No last-checked date yet
  • !No category operating model yet

SBA 7(a) data

Real acquisitions in this category

Change-of-ownership loans · NAICS 562910 · Remediation Services

Deals tracked
92
35 in last 24 mo
Median loan
$753K
$250K–$1.7M p25–p75
Implied deal size
$885K
median · ~85% LTV
Charge-off rate
not enough resolved loans

Deal size distribution

<$150K
15
$150K–500K
23
$500K–1M
18
$1M–2M
16
>$2M
20

Deal flow over time

12-month momentum
+18.8%
deal volume vs prior 12 mo
Median loan Δ
+96.8%
19 recent · 16 prior

Financing profile

Median rate
9.50%
0% fixed · last 24 mo
Median term
120 mo
standard 10-yr
Collateralized
0%
of loans secured
Median jobs
12
supported per deal
Top lenders in this space
Live Oak Banking Company32
Byline Bank9
First Internet Bank of Indiana4
BayFirst National Bank3
City National Bank2
Where deals happen
CA17
FL9
NC8
IN6
TX5
IL5
AL4
MA4
GA4
NY4

Franchise vs independent

Franchised acquisitions finance at $781K median vs $606K for independents — a +29% franchise premium. Franchises make up 39% of deals tracked.

Recent comparable deals

ClosedStateLoanImplied deal
Mar 2026AZ$1.8M$2.1M
Mar 2026AZ$150K$177K
Feb 2026MD$2.4M$2.8M
Jan 2026VA$875K$1.0M
Jan 2026PA$1.3M$1.5M
Dec 2025NC$50K$59K
Dec 2025NC$1.0M$1.2M
Dec 2025NY$100K$118K
Dec 2025NY$984K$1.2M
Sep 2025IL$1.2M$1.4M
Volume rank #80/544Deal-size rank #240/544Momentum rank #102p90 loan: $3.4MData 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.

Deal Calculator

Priced off $264K SDE — can this deal service its own debt?

2.04×
DSCR · Lender-comfortable
Purchase multiple — 3.5× SDE ($925K)
Category range: 2.5×–5× SDE
Down payment — 10% ($93K)
SBA minimum equity injection is 10% for change-of-ownership
Interest rate — 9.50%
SBA median for this category: 9.5%
Loan term — 10 years
SBA median for this category: 120 months
Purchase price
$925K
3.5× of $264K SDE
Cash to close
$120K
$93K down + ~3% closing
Debt service
$11K/mo
$129K/yr on $833K loan
Cash-on-cash
112%
cash back in ~11 mo
Debt service coverage · what the lender sees
2.04×+$11K/mo after debt
Most SBA lenders want ≥1.25× coverage; 1.5×+ is a strong file.

SDE = revenue × margin estimate for this niche; it includes owner compensation, so budget your salary out of cash flow. Excludes working-capital injection, capex reserves, and taxes. Actual SBA terms vary by lender and borrower.

Pros

  • +Insurance pays the bill — customers rarely negotiate price
  • +Emergency-driven demand creates 24/7 revenue opportunities
  • +Strong referral flywheel from adjusters and plumbers
  • +Full restoration adds $10K–$40K+ on top of mitigation revenue

Cons

  • -24/7 on-call requirement is operationally demanding
  • -Insurance billing cycle creates cash flow lag
  • -Requires IICRC certification and industry-specific knowledge

Best For

Operators who can build relationships with insurance adjusters and manage emergency-response teams

Operating Costs

Labor (technicians, project managers) is 35–45% of revenue. Equipment: industrial dryers, air movers, moisture meters. Key cost: equipment leasing/maintenance and marketing to referral sources.

Where to Buy

BizBuySell

Find water damage and restoration businesses for sale

ServiceMaster Franchise

Restoration franchise with national brand recognition and referral network

BizQuest

Browse restoration company acquisitions nationwide

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