Buy an Assisted Living Facility in Phoenix, AZ

The Phoenix Market for Assisted Living Acquisitions

Phoenix is one of the most active assisted living markets in the country. Maricopa County has one of the largest 65-plus populations in the United States, and that number is growing.

Arizona ranks among the top three states for retiree in-migration. That demographic tailwind is real and measurable: the Arizona Department of Health Services licenses over 9,000 residential care facilities, and demand for beds continues to outpace supply in most Phoenix metro submarkets.

With 54 active listings in this market, buyers have options. But the range of $150K to $25M means quality varies wildly. Most of the high-value deals involve licensed group homes or small-to-mid-size memory care facilities with multiple beds and documented occupancy history.

Deal Economics: What You Are Actually Buying

At the median, you are looking at a $1.5M acquisition with roughly $339K in annual cash flow. That is a 3.7x multiple, which sits comfortably inside SBA's sweet spot of 3x to 5x.

Here is what a representative deal structure looks like:

• Asking price: $1,500,000
• Annual cash flow: $338,924
• Implied multiple: 3.7x
• SBA 7(a) loan (80%): $1,200,000
• Seller note (15%, full standby at 0%): $225,000
• Buyer equity injection (5% cash): $75,000
• Approximate annual debt service: ~$145,000 (10-year term, ~10.5% rate)
• Estimated DSCR: ~2.3x

That DSCR is strong. It means cash flow covers debt service more than twice over, which is exactly where SBA lenders want to see it.

These are rough estimates based on market data. Actual terms depend on individual qualification and lender.

A note on cash flow figures: most brokers list these using SDE (Seller Discretionary Earnings), which includes owner compensation and personal add-backs. Real cash flow after replacing the owner or hiring a manager is typically 15% to 50% lower. Always recast the financials before underwriting.

What to Look for in a Phoenix Assisted Living Deal

Arizona's assisted living facilities are regulated by ADHS (Arizona Department of Health Services). Before you touch a deal, pull the facility's inspection and complaint history from the ADHS public registry.

A clean survey record is not optional. Lenders see it. Future buyers will see it. And violations can trigger license suspension faster than most operators expect.

Beyond the license, focus on these four areas:

Census stability. A facility running at 85% or higher occupancy for 24-plus consecutive months is a fundamentally different asset than one bouncing between 60% and 80%. Get the monthly census data going back three years.

Staffing. Assisted living margins live and die on labor costs. High turnover or reliance on agency staff is a red flag that should show up in the wage expense line. Verify payroll records against the staffing ratios required under Arizona law.

Payor mix. Private-pay residents generate significantly higher revenue per bed than Medicaid (ALTCS in Arizona) residents. A facility with 70% or more private pay is a stronger asset. Know the mix before you price the deal.

Real estate. Most deals at this price range lease the physical facility. If the seller owns the real estate, that changes the structure entirely. SBA can finance both the business and the real estate, but the underwriting is different.

SBA Financing for Assisted Living in Arizona

Assisted living facilities are eligible for SBA 7(a) acquisition financing. The business must generate sufficient cash flow to support debt service, and the buyer typically needs relevant operational or management experience.

SBA lenders will want to see two to three years of business tax returns, a current rent roll or lease, and ADHS licensure in good standing. If the facility is owner-operated, they will also require a transition plan showing the business continues without the seller.

The 10% equity injection is non-negotiable. We structure it as 5% buyer cash with the remaining 5% as a seller note on full standby at 0% interest for the life of the SBA loan. This is achievable on the majority of deals we work on, including those in the $1M to $2M range.

SBA maximum loan amount is $5M. For deals above that threshold, a conventional or bridge structure is necessary.

Frequently Asked Questions

How much does it cost to buy an assisted living facility in Phoenix?

The median asking price for an assisted living facility in Phoenix is $1,500,000, though listings range from $150K to $25M. Smaller group homes with six beds or fewer typically list below $500K, while licensed memory care facilities with 20-plus beds often exceed $3M.

What is the typical cash flow for a Phoenix assisted living business?

Median cash flow based on current listings is approximately $339K annually. That figure is typically reported as SDE and should be discounted 15% to 50% to account for management replacement cost and add-backs that will not transfer to a new owner.

Can I use SBA financing to buy an assisted living facility in Arizona?

Yes. SBA 7(a) loans are a common financing tool for assisted living acquisitions. You will need 10% equity injection (structured as 5% cash plus 5% seller note on standby), two to three years of clean business financials, and an active ADHS license in good standing.

What is the ADHS license requirement for buying an assisted living facility?

The Arizona Department of Health Services issues Assisted Living Facility and Assisted Living Home licenses. A license does not automatically transfer on sale. Buyers typically apply for a new license, and ADHS conducts a background check and facility inspection before approval. Budget 60 to 120 days for this process.

How long does it take to close an assisted living acquisition in Phoenix?

A standard SBA-financed assisted living acquisition takes 90 to 150 days from signed LOI to close. Licensing transfer timelines with ADHS are the primary variable. Deals with strong financials, clean survey records, and an experienced buyer tend to move faster through lender underwriting.

Looking to Buy an Assisted Living Facility in Phoenix?

Regalis Capital's deal team reviews 120 to 150 acquisition opportunities per week. We help buyers source, structure, finance, and close assisted living acquisitions across the Phoenix metro and broader Arizona market.

If you are seriously evaluating an assisted living deal in Phoenix, talk to us before you sign an LOI. The financing structure and license transfer process for these facilities require specific expertise, and the difference between a well-structured deal and a poorly structured one is often six figures.

Start with a free deal assessment at Regalis Capital