A supported living business valuation works differently from valuing a group home, even though both serve people with intellectual and developmental disabilities (IDD) and both run on Medicaid. There are no beds to fill and often no buildings to own. What a buyer is really pricing is your ability to deliver the hours people are authorized to receive, reliably, with a workforce that’s hard to keep.
That makes supported living one of the more attractive IDD service lines to buyers, and one of the easiest to misjudge from the inside. This guide explains how buyers look at these businesses, the numbers they focus on, the seven drivers that move value and what you can do about them. It builds on our main guide to IDD business valuation.
Key takeaways
- Supported living is growing. The number of people with IDD receiving services in their own homes rose from 80,242 in 2001 to 145,779 in 2021, according to the University of Minnesota’s RISP project.
- Buyers value supported living on adjusted earnings times a multiple, but the key operating metric is delivered hours versus authorized hours.
- Asset-light models scale well, which buyers like. Workforce reliability is the risk they price hardest.
- Smaller IDD providers sold for 3.5x to 6.47x cash flow in 2026 (HealthFMV). Supported living businesses sit in that same market.
What is a supported living business valuation?
A supported living business valuation estimates what a buyer would pay for a provider that delivers in-home and community supports to people with IDD living in their own homes or small shared settings. It’s usually a multiple of adjusted EBITDA or cash flow, shaped by hours delivered, rates, staffing stability and compliance.
Supported living goes by different names by state: in-home supports, supported living services, individual supports, residential habilitation in a person’s own home, and more. What they share is a funding model based on hours or days of support authorized in each person’s plan, rather than a daily rate for a bed in a home the provider controls.
Why do buyers like supported living?
Because it grows, it scales and it carries little real estate. The long-term shift in IDD services is toward smaller, more individualized settings, and supported living sits right in that trend. Buyers see a service line aligned with where funding and policy are heading, with fewer capital demands than group homes.
The data backs up the trend. The University of Minnesota’s Residential Information Systems Project found that the number of people with IDD receiving services in their own homes grew from 80,242 in 2001 to 145,779 in 2021. Over the same period, the number in host or foster family homes or settings of three or fewer people rose from 86,563 to 152,669, while the number in group settings of four or more fell from 256,680 to 240,004.
Demand isn’t the constraint either. KFF found more than 600,000 people on Medicaid home and community-based services waiting lists in 2025, about 74% of them with intellectual or developmental disabilities.
How does supported living revenue work?
Revenue is usually billed per hour, unit or day of support actually delivered, at rates the state sets. Each person has an authorized amount of support in their plan. The gap between what’s authorized and what you deliver is lost revenue, and it’s the first thing a buyer will measure.
That gap usually comes down to staffing. If a support worker calls out and nobody covers, those hours go unbilled and the person goes without support. Over a year, small gaps add up. Buyers want to see your delivered-to-authorized ratio, by month, over two to three years, along with the reasons behind any shortfall.
7 factors that drive a supported living business valuation
1. Delivered versus authorized hours
This is the core metric. A high, steady ratio signals reliable operations and protects revenue. A low or falling one suggests staffing strain. Track it monthly by person and by region, and be ready to explain any dips.
2. Workforce stability
The 2024 NCI State of the Workforce survey put average DSP turnover at 37% and the median wage at $18.39 an hour, and found nearly two in three DSPs who left had been with their agency less than a year. In supported living, where staff often work alone in someone’s home, retention and reliability matter even more.
3. State rates and rate trends
Your rates are set by the state and can change with budgets. KFF estimates the 2025 reconciliation law will cut federal Medicaid spending by about $911 billion from 2025 to 2034. Buyers look at your state’s rate history, any planned wage-related increases and budget pressure.
4. Client concentration and referral depth
If a few people with very high authorizations make up a large share of revenue, losing one hurts. Buyers prefer a broad base of clients and referrals from many support coordinators. Show how revenue is spread and where new clients come from.
5. Supervision, documentation and compliance
Staff working alone need strong supervision and documentation. Buyers check service notes, incident reporting, training records and survey or audit results. If your state requires electronic visit verification for your services, they’ll want to see clean records there too.
6. Management depth
Supported living runs on schedulers, coordinators and supervisors who keep hours covered. If you personally fill every gap, buyers see risk. A strong operations lead and documented processes make the business easier to value and to sell.
7. Regional density
Clients clustered in one area are easier to staff and supervise than clients spread across a state. Density reduces travel time, missed shifts and overtime, and it makes the business easier to grow from.
A worked example: what a few points of delivery are worth
Here’s a hypothetical provider, to show why buyers focus on delivered hours. The figures are illustrative only.
| Current | Improved | |
| Authorized hours per week | 1,000 | 1,000 |
| Delivered hours per week | 880 (88%) | 950 (95%) |
| Extra hours delivered per week | 70 | |
| Hypothetical rate per hour | $30 | $30 |
| Added annual revenue | $109,200 |
Seventy more hours a week, at an illustrative $30 rate, adds about $109,200 of annual revenue. You still pay staff for those hours, but overhead like scheduling, supervision and administration barely changes, so a meaningful share reaches earnings, which are then multiplied in the sale price. It’s usually the single most valuable operating improvement a supported living owner can make.
Supported living vs group homes: how do valuations differ?
Both are valued on adjusted earnings times a multiple, but the drivers differ. Group homes turn on occupancy, real estate and rates per person. Supported living turns on hours delivered, workforce reliability and client spread. Supported living is lighter on capital, while group homes offer more predictable daily revenue per resident.
| Supported living | Group homes | |
| Revenue basis | Hours or units delivered | Daily or monthly rate per resident |
| Key metric | Delivered vs authorized hours | Occupancy |
| Real estate | Usually none | Often owned or leased homes |
| Main risk | Workforce reliability | Vacancies, facility and lease issues |
| Growth | Add clients and staff in a region | Add homes |
For the residential side, see our guide to putting a group home business for sale. And for how the multiples compare across IDD, read our guide to IDD valuation multiples.
How do you raise your supported living business valuation?
Lift your delivered-to-authorized ratio, reduce turnover and overtime, broaden your client and referral base, tighten supervision and documentation, build a management layer that covers scheduling without you, and grow densely in one region. Each step raises earnings, lowers perceived risk, or both.
Start 12 to 24 months before a sale, because buyers want to see a trend, not a single good month. A practical order:
- Measure delivered versus authorized hours monthly and set a target.
- Fix scheduling and on-call coverage so gaps get filled.
- Invest in retention for new hires, where most turnover happens.
- Diversify referrals across more support coordinators.
- Clean up documentation and training records.
- Hire or promote an operations lead.
- Recast earnings with an independent review.
Our step-by-step guide on how to prepare an IDD business for sale covers the rest of the process.
What data do buyers ask for in a supported living sale?
Expect requests that go deeper into operations than in a group home sale, because the value sits in how well you run the schedule. Having these ready shortens diligence and supports your supported living business valuation:
- Authorized and delivered hours by person, by month, for two to three years
- Revenue by payer, service code and region, with current rates
- Client list with start dates and the referral source for each
- Staff roster with tenure, turnover by quarter, overtime and agency use
- Scheduling and call-out coverage reports
- Training records, supervision logs and incident trends
- Any audits, reviews or corrective action plans from the state
Anonymize anything that identifies the people you support. Buyers need the patterns, not names, until the late stages of a signed deal.
Who buys supported living businesses?
Private equity-backed IDD platforms, national and regional operators, and home care or HCBS companies expanding into IDD all buy supported living providers. Its asset-light, scalable model makes it an attractive add-on. Buyers often want supported living alongside residential services to offer a fuller range of settings.
That breadth of interest is good news for sellers, as long as you reach more than one type of buyer. For a full breakdown, read who buys IDD services companies.
Frequently asked questions
How much is a supported living business worth?
Usually a multiple of adjusted earnings. HealthFMV reported smaller IDD providers selling for 3.5x to 6.47x cash flow in 2026, with a median of 4.95x. Within that range, delivered versus authorized hours, staffing stability, state rates, client spread and compliance decide where a supported living provider lands.
What metric matters most in a supported living business valuation?
Delivered hours versus authorized hours. It shows how reliably you deliver the support people are entitled to, and it drives revenue directly. Buyers want to see a high, steady ratio over two to three years, with clear explanations for any dips, usually tied to staffing.
Is supported living worth more than a group home business?
Not automatically. Supported living is asset-light and scalable, which buyers like, but its revenue depends on workforce reliability. Group homes offer steadier per-resident revenue but carry real estate and occupancy risk. Each is valued on its own drivers, and the better-run business usually earns the stronger multiple.
Does supported living fit the HCBS Settings Rule?
Generally, yes. Support delivered in a person’s own home or a small shared setting aligns with the Settings Rule’s emphasis on community integration and individual choice. Buyers still check that services follow each person’s plan and that documentation and supervision meet state requirements.
How can I increase my supported living business valuation quickly?
The fastest lever is usually delivered hours: fixing scheduling and coverage so fewer authorized hours go unfilled. That raises revenue with little added overhead. Pair it with retention work for new staff and cleaner documentation, and start at least a year before a sale so buyers can see the trend.
Should I sell supported living separately from my residential services?
It depends on the buyers. Many IDD operators want both, so a combined sale often attracts more interest. But supported living’s scalability appeals to buyers who don’t want real estate, which can make it a strong standalone sale. If you run both, ask your advisor to test the market for each option.
Supported living business valuation: the bottom line
A supported living business valuation comes down to one question: can you reliably deliver the hours people are authorized to receive? Show a strong, steady delivery ratio, a stable workforce and a broad client base, and you’ll be selling a service line buyers actively want.
| Run a supported living or in-home supports business? Get the IDD Exit Report newsletter for quarterly valuation data, or book a confidential conversation with the IDD team at Olympic M&A. Disclosure: IDD Exit Report is published in partnership with Olympic M&A, a healthcare M&A advisory firm. |
