Specialty Restoration Company Specializing in Water, Fire, Mold, and Storm Damage
This opportunity involves a property restoration company specializing in water, fire, mold, and storm damage remediation. The business has operated successfully in a Gulf Coast market prone to seasonal hurricanes and flood events, offering 24/7 emergency dispatch, mitigation, demolition, odor control, drying, reconstruction, and direct insurance billing services. It is IICRC certified and preferred by multiple insurance carriers, real estate brokerages, and property management firms.
With annual revenue of $5.6 million and adjusted EBITDA of $1.12 million, the company runs lean with a subcontractor-heavy model. The team includes 5 W-2 field techs, 2 project managers, an estimator/Xactimate specialist, a general manager, and a support staff of 4. The business leverages over a dozen subcontractors for large-loss rebuilds and maintains scalable equipment inventory to support CAT events (CAT = catastrophe), which can drive 40% of annual revenue in active years.
A restoration company of this scale, with clean financials, recurring insurance work, and disaster resilience, is an ideal SBA 7(a) candidate. But buyers must mitigate dependency on the seller’s insurance adjuster relationships, subcontractor availability, and ensure they are positioned for growth through more consistent CAT monetization and territory expansion.
Sample SBA 7(a) Deal Structure
Given the capital intensity of CAT events and the relationship-driven model, a buyer could structure the deal as follows:
Purchase Price: $4.25 million (3.79x EBITDA)
SBA Loan: $3,187,500 (75%)
Buyer Equity Injection: $425,000 (10%)
Seller Financing (Subordinated): $637,500 (15%), interest-only for 12 months, then amortized with CAT-event revenue continuity contingencies
The seller financing should include a clause reducing principal owed if key carrier relationships are not preserved or if total CAT revenue falls more than 30% below trailing twelve-month averages during the first storm season post-close. The buyer should also have a right to extend seller transition involvement for up to 12 months, specifically to support CAT quoting and adjuster negotiations.
Insurance Carrier and Referral Network Analysis
Approximately 62% of the company’s work comes from direct insurance carrier assignment or referral. The balance comes from:
Direct calls from homeowners (12%)
Property managers or landlords (11%)
Roofing or construction referrals (9%)
Realtors and investor groups (6%)
Carrier relationships include Farmers, State Farm, Allstate, and USAA, with the business listed in preferred contractor networks (e.g., Managed Repair Vendor Programs). Maintaining these status designations requires:
Fast response times (under 2 hours for emergency dispatch)
IICRC certification
Proper documentation with Xactimate and Matterport scans
High customer satisfaction post-job surveys
Buyers must immediately engage with all carrier contacts post-close, confirm assignment eligibility, and re-certify the company’s qualifications if needed.
Additionally, all third-party lead platforms (e.g., Alacrity, Contractor Connection) must be transferred at closing to ensure job flow is uninterrupted. Failing to do so can result in immediate removal from insurance assignments.
Technician Staffing, Subcontractors, and License Considerations
The company maintains a core W-2 crew of mitigation techs (water extraction, demo, drying equipment setup) and outsources most reconstruction, painting, and drywall to licensed subcontractors. These relationships are documented and span 3–10 years in duration.
Buyers should:
Review subcontractor agreements and confirm general liability, auto, and workers comp coverage is in force
Secure exclusivity or first-right-of-refusal terms with top 3 rebuild partners
Consider converting one to two subcontractors into salaried roles for long-term stability
Implement a technician training and IICRC certification reimbursement plan to reduce reliance on outside labor
Licensing requirements vary by state and often depend on job size thresholds. For example, rebuilds over $10,000 may require a licensed general contractor on staff or via subcontract. The buyer must confirm they qualify (or have qualified staff) or arrange seller's continued participation via licensing coverage under a transitional management agreement.
CAT Event Profitability and Readiness Framework
One of the most valuable components of this business is its readiness for major weather events. In a hurricane or storm surge year, the company can double monthly revenue for 2–4 months. CAT jobs often include:
Immediate mitigation (water extraction, containment, mold treatment)
Full demolition
Rebuild of interior walls, floors, cabinets, and paint
Temporary housing coordination for insured clients
Margins on these jobs are higher than average, often exceeding 45–50% on jobs billed through Xactimate.
However, cash flow during CAT season can be lumpy. Insurance billing requires proper documentation and can take 60–90 days to collect. Buyers must model for:
Cash reserves of $250,000–$400,000 for material, equipment, and subcontractor advances
Increased line of credit usage during CAT deployment
QuickBooks and Xactimate integration to ensure job costing and billing accuracy
Performance-based bonuses for techs willing to deploy overnight or work 6–7 days/week
Post-close, the buyer should formalize a CAT readiness plan with:
Rotating emergency staffing calendar
Pre-season subcontractor agreements
Material and equipment pre-purchase checklists
Client communication templates (what to expect, how to file claims, etc.)
Revenue and Margin Breakdown
Current year revenue is split as follows:
Water damage mitigation: 44%
Mold remediation: 15%
Fire/smoke damage: 12%
Reconstruction services: 21%
Misc. (biohazard, odor, board-ups): 8%
Gross margins range from 41–48% depending on the year, CAT activity, and subcontractor pricing. Buyers should assess:
Job profitability by source: insurance-assigned vs. referral vs. self-pay
Seasonal revenue volatility: e.g., winter slowdowns vs. hurricane season spikes
Aging report: average collection is 56 days; under 3% is over 90 days
Accounts receivable should be reviewed line-by-line and discounted for aged claims where documentation may be incomplete or contested.
Marketing and Customer Flow
The company’s marketing budget is modest—about $4,800/month.
Lead flow is driven by:
Insurance carrier assignments (managed networks)
Google Ads and local SEO (20+ top-three keywords)
Realtor and property manager referrals
Website form submissions and GMB click-to-call
There is no outbound sales team. Buyers can increase top-line revenue by:
Hiring a relationship manager to build referral accounts (HOAs, hotels, nursing homes)
Targeting property flippers or short-term rental investors with fast-turn restoration packages
Attending adjuster and insurance industry events to maintain visibility
Offering annual disaster readiness audits for high-value homes (roof, flood, HVAC)
Asset and Facility Details
The company owns $400,000+ in equipment, including:
Desiccant dehumidifiers
Axial air movers
Ozone machines and hydroxyl generators
Moisture meters, infrared cameras, and HEPA vacuums
Extraction units and containment tools
Assets are included in the sale free of liens.
The facility includes:
6,000 sq. ft. warehouse/office ($6,900/month rent, NNN)
Controlled drying chamber for rugs and contents
Material inventory (drywall, tile, vinyl plank flooring, baseboards)
CapEx needs are light, but buyers should allocate $35,000–$50,000 for equipment refresh and vehicle maintenance. Three branded service vans and one box truck are included.
Compliance, Insurance, and Legal Review
Restoration work comes with material liability risk.
Buyers should ensure:
$2M general liability and $1M pollution/environmental coverage is active
All IICRC certifications and continuing education logs are current
Subcontractor indemnification clauses are enforceable
Bonding capacity exists for larger commercial jobs or public contracts
No history of material lawsuits, insurance claim denials, or contract disputes
The seller warrants that there are no open OSHA investigations, pending liens, or unresolved warranty complaints above $5,000.
Working Capital and Post-Close Needs
Buyers should model for:
AR reserve: $400,000–$600,000 to cover insurance delays
Payroll: $70,000–$85,000 biweekly during CAT season
Subcontractor prepayment: $100,000+ line of credit buffer
Marketing ramp: $15,000 for reactivation and referral campaign
Transition services or consulting retainers: $25,000 for seller support
Ideal Buyer Profiles
General contractors or service business operators seeking high-margin insurance-paid revenue
Blue-collar roll-up firms in HVAC, roofing, or restoration
Entrepreneurs with emergency response logistics or military background
Strategic investors seeking to build a regional CAT response platform
Post-Close Execution Plan
Secure all insurance platform logins, program credentials, and referral partner introductions
Evaluate CAT readiness and preposition cash, labor, and equipment
Re-underwrite AR and ensure documentation for large outstanding invoices
Retain seller as transition advisor through at least one major CAT deployment
Map top 20 zip codes for territory densification, new commercial accounts, and underserved verticals
Conclusion
This restoration company offers a rare blend of recurring high-margin work, insurance-paid jobs, and CAT event scalability. With proper deal structuring, licensing continuity, and capital reserves, the buyer can position themselves to capture extreme upside during high-disaster years while operating a durable, recession-resistant service company in normal cycles.
This SBA-eligible acquisition, if executed properly, unlocks a path to seven-figure annual earnings, multiple growth avenues, and an equity asset that is increasingly valuable in a world where severe weather events are becoming more frequent and insured losses continue to rise.
