Frank's Sober Living Portfolio, 9 Properties & 83 Beds, Delray & Boynton Beach FL

$960K

Revenue

$600K

SDE

11.7x

Multiple

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Full Editorial Writeup

This is a nine-property sober living portfolio operating under the Frank's Sober Living franchise across Delray Beach and Boynton Beach, Florida. The business houses 83 client beds across seven residences in Delray Beach and two in Boynton Beach, all fully furnished and currently operating with an established census. It sits inside one of the most nationally recognized recovery housing markets in the country, backed by years of referral relationships and local reputation.

The operation is thin on staff, just three full-time employees, which tells you the model runs on real estate ownership plus a light operating layer rather than clinical intensity. Sober living is recovery housing, not licensed treatment, so revenue comes primarily from resident bed fees on a returning basis as occupancy turns over. The barriers to entry are real: zoning restrictions on recovery housing, an established referral network, and existing census that a new operator would take years to replicate from scratch.

The critical thing every buyer must internalize is the deal structure. The $7,000,000 asking price includes $5,900,000 of real estate, meaning the operating business itself is priced at roughly $1,100,000 against $600,000 of EBITDA. This is fundamentally a real estate acquisition with an operating business bolted on, and the 11.67x blended multiple is meaningless until you separate the property value from the going concern.

Why we like it

Earnings quality benefits from a lean cost structure: just three full-time employees supporting 83 beds and $960,000 in revenue. Once you strip out the $5,900,000 of real estate, the operating business is generating roughly $600,000 EBITDA on a very small labor base, which suggests strong operating margins if census holds.
The moat is genuine and hard to replicate. Recovery housing faces significant zoning and neighborhood resistance, so the existing nine-property footprint with established census and referral relationships creates real barriers to entry. A new operator cannot simply spin up 83 beds in Delray Beach overnight.
Market tailwinds are durable. Addiction and structured recovery demand is non-discretionary and grows through economic cycles, and South Florida is the single most established recovery destination in the country. Referral flow from treatment centers and the recovery community supports a steady census pipeline.
The real estate anchor provides downside protection. Even if the operating business underperforms, a buyer owns nine income-producing residential properties in appreciating Palm Beach County submarkets. That hard-asset backing is meaningfully better collateral than a pure-services goodwill purchase.

How to improve it

Separate the real estate from the operations on day one and finance accordingly. The property should carry a mortgage at real estate rates while the operating business is valued on its own EBITDA, which immediately clarifies whether you are overpaying and unlocks better capital structure than the seller's no-SBA, no-financing terms imply.
Push occupancy toward capacity. With 83 beds, every point of census improvement drops almost entirely to the bottom line given the fixed three-person staff. Audit current occupancy, identify empty beds, and deepen referral partnerships with local treatment centers and detox facilities to fill them.
Formalize and expand the referral network into a repeatable engine. Map every treatment center, IOP, and detox program sending residents, then build structured relationships and tracking so referral flow does not depend on the retiring owner's personal contacts. This is the single biggest continuity risk to de-risk.
Review bed pricing against market. Recovery housing rates vary widely and a longstanding operator often leaves money on the table by not adjusting fees. Benchmark against comparable Delray and Boynton facilities and test modest rate increases where census supports it.
Add beds and residences where zoning permits. The listing flags capacity to add residences and replicate the model in adjacent South Florida markets. Identify additional properties within existing zoning envelopes to grow bed count without rebuilding the referral infrastructure.
Institutionalize compliance and documentation. Sober living operates in a regulatory gray zone with evolving state oversight, insurance scrutiny, and fair housing considerations. Tighten operating policies, resident agreements, and records to protect the franchise and reduce liability before scaling.

Diligence notes

Verify the real estate valuation independently. The $5,900,000 property figure drives the entire deal, so get appraisals on all nine residences and confirm clean title, condition, and any deferred maintenance. If the real estate is worth less than stated, the effective operating multiple balloons.
Scrutinize census and revenue durability. Pull actual occupancy records over 24 to 36 months, understand length of stay, and confirm the $960,000 revenue is recurring bed fees rather than one-time or grant-based income. Sober living census can be volatile, so seasonality and turnover matter enormously.
Investigate the regulatory and zoning status of every property. Confirm each of the nine residences is legally permitted for recovery housing use, that there are no pending complaints or enforcement actions, and how Florida's evolving sober home regulations affect the business going forward.
Understand the Frank's Sober Living franchise agreement in detail. Review royalty terms, transferability, territory rights, and renewal, and confirm what the franchise actually provides versus the referral value the seller built personally. A weak franchise plus owner-dependent referrals is a materially different deal.
Assess key-person and referral concentration risk. The moat rests on relationships built by a retiring owner, so map how much census depends on him personally and confirm the three staff members and referral sources will stay through and beyond the transition.

Source

Originally listed on BizBuySell. View original listing →