# Can You Buy a School? An Expert Guide for 2026 and Beyond

- Canonical: https://33rdsquare.com/can-you-buy-a-school-an-expert-guide-for-2024-and-beyond/
- Published: 2024-04-03
- Author: Charlene Farwell
- Categories: [School](https://33rdsquare.com/category/education/school/)

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For most people, owning a school exists solely in the realm of fantasy – an unrealistic dream forever out of reach. However, for a select few with the necessary capital and vision, purchasing a private or charter school can shift from pipe dream to reality.

As an education reform expert with over 15 years advising investors and operators in the K-12 school ownership market, I‘ve seen this dream actualized firsthand. In this comprehensive guide, I‘ll equip you with insider insights on buying a school in 2024 – from estimating costs to evaluating the investment.

## Landscape of Buyable School Models

While traditional public schools cannot be acquired, several privatized models allow for purchase, operation and governance by individuals and organizations:

### Private Schools

Over 34,000 private schools enrolled over 5 million students nationwide as of 2021-22 according to [National Center for Education Statistics](https://nces.ed.gov/fastfacts/display.asp?id=84) data.

| Type | % of Total | Example |
| --- | --- | --- |
| Secular | 68% | Montessori, boarding, prep schools |
| Catholic | 19% | Diocese schools |
| Other religious | 13% | Jewish, Islamic, Christian schools |

The private school market saw expansions even amidst pandemic upheavals:

- **4%** growth from 2019-20 to 2020-21 per [NCES data](https://nces.ed.gov/fastfacts/display.asp?id=84)
- **$27 billion** in annual revenue

Buying an existing private school or launching a new one both allow for full ownership privileges. This free market continues attracting entrepreneurs and investors.

### Charter Schools

Charter schools are the fastest growing segment – public-private hybrid models allowing independent operation and exemptions from regulations governing traditional districts.

Key facts on the charter landscape:

- Over **7,700** charter schools as of 2021-22 per [National Alliance for Public Charter Schools](https://www.publiccharters.org/about-charter-schools/what-charter-school)
- **3.5 million** students enrolled
- Operating in **44** states plus Washington D.C.
- **$110-136 billion** in infrastructure needs over next 5 years for new charters per [CRPE report](https://www.crpe.org/publications/charter-school-facility-financing-landscape-american-cities)

Both non-profit charter management organizations and for-profit education management organizations can purchase and operate charter schools. Investor interest continues to rise.

## Estimated Buy-In and Operating Costs

Buying a school requires major capital investments upfront and ongoing. Carefully model short and long-term costs before proceeding.

### Upfront Purchase Costs

The purchase price varies based on factors like location, enrollment size, condition and more. Per [Education Week](https://www.edweek.org/leadership/buying-a-school-what-you-need-to-know/2015/10):

- National average list price: **$10 million**
- Range from **$2 million** to **$50+ million** in ultra-competitive areas

You‘ll also need capital for repairs, upgrades and expansions. Budget multi-millions for facility renovations and new equipment alone.

### Operating Costs

Plan for significant annual expenditures – similar or above per pupil spending in public schools:

- Average **$12,000** per student in traditional public school per [NCES](https://nces.ed.gov/fastfacts/display.asp?id=66)
- **$15-30,000** per pupil common range for private/charter schools in my consulting experience

Fixed costs like talent, rent and supplies require sustainable funding sources like tuition revenue and donations.

All said, buying and running a school requires **major capital** most underestimate. Conduct comprehensive cost modeling before moving forward.

## Financing Your School Purchase

With multi-million dollar price tags, financing is necessary for most buyers beyond the ultra-wealthy.

### Conventional Lending

Banks and credit unions offer small business loans and commercial real estate lending. Expect to put up collateral and pay interest rates of ~**4-8%**.

Pro-tip: Position it as a commercial rather than school purchase to increase probability of approval.

### Alternative Lenders

Specialized companies like [School Growth Finance](https://schoolgrowthfinance.org/) provide financing for charter schools and CMOs, with rates tied to academic and enrollment milestones.

crowdfunding platforms focused specifically on education projects.

Investment groups and family offices with an education impact thesis may offer more flexible creative financing vehicles in exchange for equity or revenue share.

Bring credible financials and growth models to demonstrate repayment ability and mitigate risk for prospective funders.

## Step-by-Step Process to Purchase a School

The process mirrors other major M&A deals:

### 1) Identify Schools for Sale

Leverage online databases and work with brokers to find viable targets. Focus both on existing institutions and charter opportunities still in the application pipeline.

Prioritize alignment with your geographic, demographic and academic priorities.

### 2) Conduct In-Depth Due Diligence

Comb through financial documents, tax records, licensure status reports and other materials with a fine-toothed comb.

Enlist lawyers and school operations veterans to further vet KPIs, look for red flags that jeopardize stability, and develop risk mitigation plans.

### 3) Make an Offer and Negotiate Terms

Ensure your offer accurately values tangible assets and intangible facets like brand equity and growth potential. Be prepared to justify your proposal.

Leave room to compromise on issues like inventory and staff transitions. Understand motivations of all parties to find optimal middle ground.

### 4) Secure Financing

Thoroughly evaluate financing options outlined earlier and determine the best capital path aligned to your risk profile and cash flow realities.

Prepare air-tight documentation demonstrating prudent financial planning and ability to repay debts.

### 5) Close and Finalize Ownership Transition

Pay meticulous attention to legal and compliance details throughout closing process which can last months for schools. Leave no loose ends that can come back to bite you later!

Lean on lawyers and consultants to ensure you meet all protocols. Transferring a school is complex but very feasible with proper support.

## Costly Mistakes to Avoid as a First-Time Buyer

Many new entrants rush into school buying without fully grasping the complexity or properly planning. Avoid these common mishaps:

**Insufficient working capital** – Schools devour cashflow. Not budgeting for unexpected dips or delays in funding streams causes fast failure.

**Lacking leadership expertise** – From academics to HR to finance, seasoned management skill is mandatory. Not prioritizing this in the transition dooms many new owners.

**Not accounting for politics** – Charter approvals and education policy can shift rapidly. Failing to anticipate potential rule changes leaves you playing catch up.

Buying an existing institution or building a school from scratch both carry major risks if not approached strategically with the right supporting capabilities and contingency planning.

## Recent Higher Education Policy Changes Impacting Schools

While K-12 garners more mainstream attention, higher education policy shifts impact downstream pathways and enrollment:

- Several states expanding **free community college** programs
- Proposed federal legislation for **two years free public university**
- **Income share agreements** on the rise as an alternative to loans
- Calls to make **standardized testing optional** for college admissions

Monitor proposals and model out intended and unintended consequences on your school‘s value proposition.

## Key Considerations for Prospective Buyers

Prior to acquiring a school, assess yourposition across several dimensions:

### Financial Readiness

- Do you have the capital to afford the likely 8-figure purchase price and cover ongoing 7-figure+ operating costs?
- If not, are you willing to relinquish some control via partnerships or independent financing?

### Leadership Experience & Capabilities

- Running a school requires specialized expertise across academics, operations, regulatory compliance and more.
- If lacking experience yourself, be honest about needing an experienced school CEO or management organization to guide you.

### Risk Appetite

- Any school acquisition carries substantial downside risks around enrollment, funding, politics and more.
- How much can you financially and emotionally withstand potential hiccups or delays?

### Vision & Ethos Fit

- What student demographic will your school serve? What will differentiate its offerings and environment?
- Does the opportunity fully align with the culture and programming you aim to realize?

Evaluating your positional across these dimensions will clarify if and what type of school purchase makes strategic sense.

## Buying vs. Building Considerations

Should you acquire an established school or build one from the ground up? Key tradeoffs to weigh:

| Buying Existing | Building New |
| --- | --- |
| Typically faster launch + revenue | Higher control to sculpt vision |
| Inherit talent, students & systems | Avoid outdated systems and attitudes |
| Lower perceived risk | Higher actual legal/financial risk |
| Difficult to influence embedded culture | Blank slate for desired culture |

Building allows complete customization flexibility but requires more capital and timeframe. Buying offers faster payoff but less influence; still major upside potential revamping existing assets.

Hybrid model: Buy charter application and build school tailored to that approval. This Market Intent method is popular among leading charter operators.

## Case Studies – Recent School Acquisitions

Reviewing examples provides helpful context on real-world school buying scenarios and motivations:

**Prep School Chain Purchase** – A Chicago private equity firm [acquired majority stake](https://pefmagazine.com/windy-city-private-equity-firm-makes-investment-in-virginia-based-prep-school-chain/) in Virginia-based elite prep school group Evergreen Schools for an undisclosed sum in 2022. They noted plans to expand locations and modernize technology.

**Non-Profit Charter Operator Deal** – The fast-growing non-profit charter management org Democracy Prep [finalized its acquisition of Camino Nuevo Charter Academy](https://www.democracyprep.org/press-releases/democracy-prep-public-schools-welcomes-camino-nuevo-charter-academy-to-democracy-prep-public-schools-family/) in 2018. CNCA operated 3 campuses serving 1,800 Los Angeles students at the time.

**Catholic School Spin Out** – A group of parents and community leaders bought St. Rose of Lima Catholic School in pending closure by the Archdiocese of Boston, [spinning it out as an independent school](https://www.nbcboston.com/news/local/st-rose-school-in-chelsea-to-reopen-as-independent-catholic-school/2783200/) in 2021. The new board aimed to preserve the tight-knit culture.

These snapshots demonstrate creative school acquisitions spanning sectors, financial motivations, and models.

## Conclusion – Schools as Life Project Investments

While ultra high net worth individuals may buy schools as vanity investments, schools reward those focused on purpose-driven societal impact.

Approach with realistic eyes about the risks and operating complexities, while anchoring efforts in a compelling ‘why‘ tied to elevating education.

With careful financial planning, legal positioning, leadership and a clarifying vision – buying a school allows you to manifest educational ideals in a concrete, self-directed way not possible working within traditional institutions.

I hope this insider guide from an education reform expert equipped you to evaluate if and what type of school acquisition aligns to your aspirations and capabilities. Please reach out with any other questions!

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Source: [Can You Buy a School? An Expert Guide for 2026 and Beyond](https://33rdsquare.com/can-you-buy-a-school-an-expert-guide-for-2024-and-beyond/)