Portfolio of Group Homes, Stark County Ohio Residential Care Provider

$2.4M

Revenue

$925K

SDE

2.7x

Multiple

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Full Editorial Writeup

This is a portfolio of licensed residential group homes in Stark County, Ohio, providing 24/7 person-centered care to individuals with developmental disabilities and support needs. The operation runs multiple 3-4 bedroom homes housing roughly 25-30 residents, with a contracted workforce model that keeps staffing flexible and scalable. Revenue is generated almost entirely through government-backed Medicaid waiver services contracted with the Stark County Board of Developmental Disabilities and the Ohio Department of Disabilities and Aging.

The service mix spans residential care, intensive group home respite, short-term and intensive respite, personal care assistance, plus adjacent services like transportation and day habilitation. Because payment flows from Medicaid rather than private-pay families, collections are predictable and the demand base is anchored by a population that requires care regardless of the economic cycle. The business holds an active healthcare license through March 2027 and government contracts through December 2026.

Note the listing is internally inconsistent: the headline advertises $2.39M revenue and $925K SDE, while the body text cites $1.74M revenue and $741K SDE (2025 annualized) at a 25% net margin. It also alternates between four and five homes. A buyer needs to reconcile which figure is real before underwriting anything, since the gap materially changes the multiple being paid.

Why we like it

Earnings quality is anchored by government-backed Medicaid waiver payments, not discretionary private-pay households. That means collections are reliable and largely insulated from consumer sentiment, and the reported 25% net margin on residential care is healthy for the category.
The service is genuinely recession-proof and non-discretionary: care for individuals with developmental disabilities is legally and morally mandated and funded regardless of the economy. Waitlists for placement in Ohio are chronic, so occupancy risk is demand-side favorable rather than a marketing problem.
Revenue is structurally recurring through per-resident Medicaid billing and multi-year state relationships, with contracts active through December 2026 and licensure through March 2027. Residents typically stay for years, producing long tenant tenure and predictable monthly cash flow.
The contracted workforce model gives an operator flexibility to scale without carrying a heavy fixed W-2 payroll. A hands-on owner who tightens staffing costs and adds homes can compound this from a five-home base into a regional platform with clear operating leverage.

How to improve it

Reconcile and stabilize the financials in the first 30 days: the listing shows two conflicting revenue and SDE figures and two different home counts. Build a clean trailing-twelve-month P&L per home before doing anything else, because pricing and lender approval both hinge on the real number.
Push occupancy to full census across every home. If homes run 25-30 residents across five properties, each open bed is pure lost Medicaid revenue against fixed rent and baseline staffing, so partnering closely with the County Board on referrals fills empty beds fast.
Convert the contracted workforce toward a blended model that reduces per-hour agency premiums where volume justifies it. Contract labor buys flexibility but usually costs 20-40% more per hour, and even a modest shift to direct hires on core shifts can lift margin meaningfully.
Renew and extend the state and county contracts early, ahead of the December 2026 expiration and March 2027 license date. Locking multi-year renewals de-risks the asset and materially improves resale value and lender comfort.
Add and bill more adjacent waiver services already inside the license: transportation, day habilitation, and shared living. These carry incremental reimbursement per resident and leverage staff already on site, expanding revenue per bed without new real estate.
Systematize compliance and documentation with dedicated software for incident reporting, medication administration, and billing. Clean documentation both reduces clawback risk on Medicaid audits and speeds reimbursement cycles, protecting cash flow.
Build a repeatable playbook to acquire or lease additional 3-4 bedroom homes in adjacent Ohio counties. The model is proven and portable, and a disciplined roll-up of small group-home operators is the clearest path to multiple expansion at exit.

Diligence notes

Resolve the revenue and SDE discrepancy immediately: the title claims $2.39M revenue and $925K SDE while the body says $1.74M revenue and $741K SDE, and the home count flips between four and five. Until reconciled, the 2.7x multiple is meaningless.
Verify the real estate arrangement. The homes are physical properties but the listing never states whether they are owned, leased, or included in the price, so confirm lease terms, rent expense, and whether any related-party rent is inflating or masking true SDE.
Stress-test Medicaid reimbursement rate risk. Nearly all revenue flows from Ohio DODD and county waiver programs, so review the actual rate schedules, historical rate changes, and any pending state budget adjustments that could compress per-resident payments.
Examine staffing sustainability and turnover in the contracted workforce. Direct care in group homes faces chronic labor shortages, so confirm the vendor relationships, fill rates, wage trends, and any single-vendor dependency that could threaten 24/7 coverage.
Confirm licensing, contract renewal, and compliance history. License runs to March 2027 and contracts to December 2026, so review any past deficiencies, citations, incident reports, or clawbacks with the County Board and DODD that could jeopardize renewal.
Validate SBA eligibility and transferability of the licenses and contracts. The listing claims SBA-qualified, but Medicaid provider agreements and state licenses often require re-approval on change of ownership, which can delay closing and cash flow continuity.

Source

Originally listed on BusinessBroker.net. View original listing →