Pre-LOI Checklist for School Founders

Before you sign a letter of intent (LOI) for a school facility, there are critical items to verify. An LOI signals serious interest and often triggers due diligence costs, so you want to confirm the fundamentals first. Work through each category before putting pen to paper.

Zoning & Use

If zoning doesn't allow school use, nothing else matters. Confirm this first.

• Zoning allows educational/school use (or CUP path identified)
• No deed restrictions or covenants limiting school use
• Setback and parking requirements can be met
• Outdoor play space available or park within walking distance

Building Code & Occupancy

Determines what code upgrades the building needs before you can open.

• Current Certificate of Occupancy (C of O) classification determined
• Required occupancy classification identified (E, A-3, or B based on enrollment)
• Maximum occupancy supports your enrollment target
• Change-of-use requirements assessed (sprinklers, fire alarm, ADA)

Square Footage & Layout

Confirms the space actually fits your program. Use the Space Calculator to determine your required sf.

• Total square footage matches your Space Calculator estimate
• Classroom count and sizes work for your class structure
• Restroom count meets fixture requirements (1 per 25 students per gender)
• Layout changes and architectural plan needs identified

Tenant Improvements (TI)

TI cost can make or break a deal, especially for leases. Know the scope before you commit.

• Determined whether TI is needed for your intended use
• Preliminary TI cost estimate obtained
• Clarified who pays for TI (landlord allowance vs. tenant)
• TI timeline aligns with planned opening date

Location & Enrollment Viability

A great building in the wrong location won't fill seats. Run a Community Analysis for this address.

• Community Analysis completed for this address
• Sufficient school-age children in the catchment area
• Competitive landscape assessed (nearby schools, available capacity)
• Accessibility evaluated for families (transit, parking, drop-off flow)

Financial Readiness

Know your total costs before committing. Due diligence alone can cost thousands.

• Lease Calculator completed for this property
• Lease terms within per-student budget threshold
• Due diligence costs understood (architect, engineer, attorney, environmental)
• Funding sources identified for move-in costs (deposit, first/last, TI)

Financial readiness before the LOI

Beyond the property itself, confirm your organization is financially ready for this commitment:

• Board-approved financial model: Does your five-year model show this facility is affordable at projected enrollment levels?
• DSCR analysis: Will your debt service coverage ratio stay above 1.1 during growth years and reach 1.15+ at full enrollment?
• Predevelopment funding: Have you secured funding or commitments for the costs that come between the LOI and lease signing (environmental assessments, architectural drawings, legal review)?
• Lender conversations: Have you assembled your primary folder (charter standing, organizational capacity, academic performance, demand data, financial health) and had preliminary conversations with potential lenders?