Buy an Assisted Living Facility in El Paso, TX
The El Paso Market for Assisted Living
El Paso is a border city with a population skewing older than the Texas average. Adults 65 and older make up a growing share of the metro area, and cross-border family dynamics often mean families on both sides of the US-Mexico border are looking for care facilities close to home.
That creates sustained, localized demand for assisted living that does not depend on economic cycles the way a service business might.
Twelve facilities are currently listed for sale in Texas with El Paso as a regional data point. The price range runs from $158,900 to $25,000,000, meaning everything from a small 6-bed personal care home to a mid-sized licensed facility is theoretically on the market. The median of $595,000 is the number worth anchoring on.
Deal Economics at a 1.6x Multiple
A 1.6x cash flow multiple is low. Very low. SBA's acquisition sweet spot runs 3x to 5x, so finding a facility at 1.6x means either the deal is genuinely underpriced or the cash flow figure needs scrutiny before trusting it.
At $595,000 asking price with $293,582 in annual cash flow, the math looks like this:
- Asking price: $595,000
- Annual cash flow: $293,582
- Implied multiple: 1.6x
- SBA loan (80%): $476,000
- Seller note (10%, full standby at 0% interest): $59,500
- Buyer cash (5%): $29,750
- Approximate annual debt service (10-year term, ~10.5%): roughly $73,000 to $78,000
- DSCR: approximately 3.8x
That DSCR is strong. A 3.8x coverage ratio means the business generates nearly four dollars of cash flow for every dollar of debt service. From a lender standpoint, that is an easy approval if the cash flow is real.
The caveat worth stating plainly: cash flow figures sourced from broker listings are often SDE (seller's discretionary earnings), which can include add-backs that a new owner will not replicate. Apply a 15% to 50% discount to SDE before trusting it. Even at a 30% haircut, $205,000 in adjusted cash flow still produces a 2.6x DSCR on this structure.
These are rough estimates based on market data. Actual terms depend on individual qualification and lender.
The median asking price for an assisted living facility in El Paso is $595,000 with median annual cash flow of $293,582, reflecting a 1.6x average multiple. According to Regalis Capital's deal team, that multiple is well below SBA's typical 3x to 5x range, making this one of the more cash-flow-efficient acquisition categories in Texas when the underlying numbers are verified.
What SBA Financing Looks Like for This Deal
SBA 7(a) is the primary financing tool for assisted living acquisitions at this price point. Most lenders will fund up to 85% of the acquisition price for an established, licensed facility with a track record.
The standard equity injection is 10% of the purchase price, structured as 5% buyer cash plus 5% seller note on full standby at 0% interest. On a $595,000 deal, that is $29,750 in cash out of pocket.
Full standby means the seller receives zero payments on their note during the entire SBA loan term. Based on our experience, Regalis Capital achieves this structure on more than 90% of our deals. It matters because it keeps early-year cash flow in the business rather than servicing two debt obligations simultaneously.
One SBA nuance for assisted living specifically: lenders will want to see that the facility has a clean licensing history with Texas HHSC (Health and Human Services Commission). A history of deficiencies, citations, or provisional license status will complicate or kill a loan approval regardless of how strong the financials look.
SBA 7(a) financing for an assisted living facility in El Paso requires a 10% equity injection, structured as 5% buyer cash plus a 5% seller note on full standby at 0% interest. On a $595,000 acquisition, that is approximately $29,750 in cash. The SBA loan typically covers 80% to 85% of the purchase price on a 10-year term at roughly 10% to 11% based on current rates.
What to Look for Before Making an Offer
Assisted living is one of the more operationally complex acquisition categories. The license transfers with the business in Texas, but the buyer must be approved by HHSC before taking ownership. That approval process takes time and must be factored into the deal timeline.
Beyond licensing, here is what matters most in due diligence:
Occupancy rate and census stability. A facility running at 60% occupancy carries far more risk than one at 90%. Ask for 24 months of census data, not just a snapshot.
Payer mix. Private-pay residents generate more predictable revenue than Medicaid-dependent facilities. Medicaid reimbursement rates in Texas are set by the state and can change. Know what percentage of revenue comes from each source.
Staffing. Assisted living in El Paso runs on a tight labor market. High turnover in direct care staff is a cost multiplier. Ask for turnover rates and average hourly wages for the last two years.
Physical plant condition. The facility must meet HHSC physical standards. Get a physical inspection before closing. Deferred maintenance in a licensed facility can trigger compliance issues that are expensive to fix post-acquisition.
Real estate vs. business only. Many listings at the higher price points include the real estate. Know whether you are buying the real estate, the business, or both, and structure the SBA loan accordingly. SBA can finance both under a single loan in many cases.
Frequently Asked Questions
How much does it cost to buy an assisted living facility in El Paso?
The median asking price for an assisted living facility in the Texas market is $595,000, with listings ranging from under $200,000 for small personal care homes to $25,000,000 for larger licensed facilities. Most buyers targeting an SBA acquisition focus on the $500,000 to $2,000,000 range where financing terms are most favorable.
What is the typical cash flow for an assisted living facility in this market?
Median cash flow for Texas assisted living listings is $293,582 per year. That figure likely represents SDE as reported by the seller, so buyers should apply a 15% to 30% discount when building their own financial model to account for non-recurring add-backs and management replacement costs.
Can I get an SBA loan to buy an assisted living facility in Texas?
Yes. SBA 7(a) loans are commonly used for assisted living acquisitions. The buyer needs clean licensing approval from Texas HHSC, which must happen before the deal closes. Lenders will also want to see at least two to three years of facility financials and a clean compliance history with no outstanding citations.
Do I need prior healthcare experience to qualify for SBA financing?
SBA lenders typically require management experience relevant to the business. For assisted living, that can mean prior ownership, an administrator background, or a plan to hire a licensed facility administrator. A credible operating plan and a strong financial profile can offset limited direct industry experience, but expect lenders to ask.
How long does it take to close on an assisted living facility acquisition?
Longer than most businesses. The HHSC change-of-ownership approval process in Texas typically adds 60 to 90 days beyond a standard SBA close. Budget 120 to 180 days from signed letter of intent to full close, and build appropriate contingencies into the purchase agreement to account for that approval timeline.
Ready to Run the Numbers on an El Paso Assisted Living Facility?
If you are looking at assisted living facilities in El Paso, Regalis Capital's deal team can help you evaluate whether the cash flow is real, structure the SBA financing, and get the HHSC approval process started on the right timeline.
We review 120 to 150 deals per week. Most buyers we work with are not healthcare insiders. They are operators who recognize a structurally sound business with durable demand and want to build a repeatable acquisition process around it.
Start with a free deal assessment at Regalis Capital.
Frequently Asked Questions
How much does it cost to buy an assisted living facility in El Paso?
The median asking price for an assisted living facility in the Texas market is $595,000, with listings ranging from under $200,000 for small personal care homes to $25,000,000 for larger licensed facilities. Most buyers targeting an SBA acquisition focus on the $500,000 to $2,000,000 range where financing terms are most favorable.
What is the typical cash flow for an assisted living facility in this market?
Median cash flow for Texas assisted living listings is $293,582 per year. That figure likely represents SDE as reported by the seller, so buyers should apply a 15% to 30% discount when building their own financial model to account for non-recurring add-backs and management replacement costs.
Can I get an SBA loan to buy an assisted living facility in Texas?
Yes. SBA 7(a) loans are commonly used for assisted living acquisitions. The buyer needs clean licensing approval from Texas HHSC, which must happen before the deal closes. Lenders will also want to see at least two to three years of facility financials and a clean compliance history with no outstanding citations.
Do I need prior healthcare experience to qualify for SBA financing?
SBA lenders typically require management experience relevant to the business. For assisted living, that can mean prior ownership, an administrator background, or a plan to hire a licensed facility administrator. A credible operating plan and a strong financial profile can offset limited direct industry experience, but expect lenders to ask.
How long does it take to close on an assisted living facility acquisition?
Longer than most businesses. The HHSC change-of-ownership approval process in Texas typically adds 60 to 90 days beyond a standard SBA close. Budget 120 to 180 days from signed letter of intent to full close, and build appropriate contingencies into the purchase agreement to account for that approval timeline.
Note: Deal economics, pricing, and cash flow figures referenced on this page are estimates based on aggregated listing data and general SBA acquisition math. Actual deal terms vary by business, market conditions, and lender requirements. This content is informational only and does not constitute financial advice.
Looking to buy an assisted living facility in El Paso? Regalis Capital's deal team can evaluate the cash flow, structure SBA financing, and manage the HHSC approval process.
Start Your Acquisition