A stabilized model for a ~110-child, ~10-12k sq ft owned center in Damonte Ranch / South Meadows or Spanish Springs / Kiley Ranch, sized to work for both James (full-time operator income) and his father (return on ~$2M equity). Educational modeling only.
A ~10-12k sq ft building supports roughly ~110 licensed children once you net classrooms against NAC 432A's 35 sq ft/child indoor rule (~3,850 sq ft of pure classroom for 110) plus support space, and confirm the 37.5 sq ft/child fenced play yard (~4,100 sq ft) fits the parcel. Capacity is set by staff ratios + usable sq ft + fire code, not a headline number. The revenue-optimal mix keeps infant capacity deliberately small (scarce, loss-leading, locks in families) on top of a large preschool base that carries the P&L.
| Classroom (age band) | Ratio NAC 432A.5205 | Kids | Reno tuition/mo EST | Teachers at ratio |
|---|---|---|---|---|
| Infant (<9 mo & 9mo-2yr) | 1:4 / 1:6 | 20 | $1,450-1,550 | ~4 |
| Twos (2-3 yr) | 1:9 | 18 | $1,300 | 2 |
| Preschool (3-4 yr) x2 rooms | 1:12 | 48 | $1,150 | 4 |
| Pre-K (4-5 yr) | 1:13 | 24 | $1,050 | 2 |
| Total at licensed capacity | 110 | ~$134K/mo @ 100% | ~12 + relief |
Reno center-based tuition runs ~$1,250-$1,550/mo (higher near downtown/university), above the Nevada state average (infant ~$1,000-$1,208, toddler ~$880, preschool ~$750/mo). Infant/toddler commands a premium here because supply is scarcest and the >2-year infant waitlist is real.
New centers open at ~40-60% capacity. In Washoe's structural shortage (capacity meets only ~45% of need; providers down ~33% since 2013), a well-run center fills fast, roughly 4-8 months to stabilize toward ~90%, with cash breakeven ~month 9-15. Model Year 1 as a planned partial-year loss; the $2M must fund the building and ~12-18 months of runway (~$600-800K cushion, comfortably inside $2M).
Year 2-3 stabilized, ~92% utilization. Building owned (no rent), which is the whole thesis, it removes the single largest non-labor cost (~22-25% of revenue for leased centers) and converts it into equity + a depreciation shield.
| Line | Annual EST | % rev | Notes |
|---|---|---|---|
| Revenue (~92% of 110 slots, blended) | ~$1,475,000 | 100% | ~$1.60M at 100%. Swing factor = age mix + utilization. |
| Payroll, loaded (~19 FTE) | ~$820,000 | 56% | Headcount fixed by ratios, not by how full the building is. See Sec. 03. |
| Food (net of CACFP reimbursement) | ~$60,000 | 4% | Federal meal reimbursement from day one. |
| Insurance (incl. abuse/molestation) | ~$30,000 | 2% | 6-7 policies; SAM endorsement bought separately, target $10M/victim. |
| Supplies / curriculum | ~$45,000 | 3% | |
| Utilities / R&M | ~$50,000 | 3% | |
| Admin / marketing / software / licensing | ~$85,000 | 6% | |
| Property tax (owned, NV ~0.6-0.7%) | ~$28,000 | 2% | NV effective property tax far below CA. |
| Rent | $0 | 0% | Building owned. This line is ~$300-370K for a comparable leased center. |
| Total operating expense | ~$1,118,000 | 76% | |
| Pre-owner-comp cash flow (EBITDAR) | ~$357-430K | ~24-29% | Funds operator salary + debt service + return to father. |
Model center at ~$1.475M revenue and ~$1.118M opex nets ~$357K; a leaner staffing year or slightly richer mix pushes it toward ~$430K. Well-run owned centers run 10-25% net; ~25% pre-owner margin here is credible because rent is zeroed out.
Payroll is ~55-56% of revenue and is the operational make-or-break. Headcount is dictated by ratios and by relief coverage (ratios must hold through breaks/lunches), so ~12 classroom teachers become ~19 FTE once you add floaters and non-teaching roles.
| Role | Count | Wage EST | Loaded annual |
|---|---|---|---|
| Director (licensing gate, NRS 432A.1773) | 1 | ~$75-85K | ~$96,000 |
| Assistant director | 1 | ~$50-55K | ~$62,000 |
| Lead / assistant teachers | 12 | ~$16-20/hr | ~$490,000 |
| Floaters / relief | 3 | ~$15-17/hr | ~$108,000 |
| Cook + admin/front desk | 2 | ~$16-18/hr | ~$78,000 |
| Total | ~19 FTE | ~$834,000 |
Nevada Registry (2024) put the Reno lead-teacher median ~$16.80/hr and director ~$20.59/hr; BLS/aggregator preschool-teacher figures for Reno land ~$12.50-$17.85/hr. But Tesla, the data centers, and the general labor squeeze push the hireable wage up. National turnover is 26-40%/yr and 80%+ of centers report a shortage, many run below licensed capacity because they can't staff, which legally forces turning away paying kids. Budgeting above-market wages is the core competitive lever, not a nicety. A wage line 10% higher than modeled trims pre-owner cash flow by ~$80K, so wage inflation is the single biggest downside risk to this P&L.
The ~$357-430K pre-owner cash flow has to do three jobs: pay James a real operator salary, service any debt, and return capital to his father. Two structures:
James's construction-PM license lets him self-GC the build/conversion (the largest budget line, ~$150-550/sq ft ground-up; 20-30% cheaper on a 2nd-gen shell) and capture contractor margin while maximizing the cost-seg short-life components. His realtor license lets him screen parcels against the eased Jan-2026 Title 18 zoning and the ~45% capacity gap. He earns an operator salary + developer margin; his father earns a preferred cash return + the depreciation shield + an appreciating, liquid real-estate asset. The one structuring question for a CPA: because childcare is an active business (not a passive rental), the depreciation flows against active operator income, so confirm who materially participates and design the ownership/waterfall split before funding.
Ratios/space = codified (high confidence). Tuition, wages, insurance, cap rates = 2025-2026 market estimates (medium confidence); confirm with local operators, a childcare insurance broker, and a CPA.