Owner says he'll sell, One caveat


#1

Small park, 16 spaces. Not deplorable looking. Looks like working class folks.
100% occupied
Rent well below market
No POH’s
Not in city limits
Community water
Owner says, I’ll sell it to you. Asking price 9 cap, pretty sure he’ll sell for a 10 cap.
One caveat: Sewer is aerobic system. Says he was contacted by DEQ to install new system 6 years ago. He did. Multiple aerobic tank system with sprinklers on adjacent land that will go with the park. Could possibly have slightly larger capacity and/or room for additional tanks/sprinklers for more lots.

Question: How ugly is the idea of aerobic system (fairly new) for the sewer function?


#2

Aerobic systems just break more often with the additional moving parts (e.g. pumps and sprinkler lines, sprinkler heads specifically). Have someone inspect the system quarterly, or more often if required by regulations, and you should be okay. Otherwise the manager will be able to tell you when the yard service runs over a sprinkler head and can fix those,. Not a deal breaker for me at all…


#3

Thanks jhutson. I value your input.


#4

I wish I had an aerobic system. Their drain fields don’t build up the gooey bio-mats. In fact, if installed at the right time, they can clean up a drain field that is pretty much all clogged up.


#5

Thanks for the input Randy. Of course city sewer is the golden grail, but I really want no part of an oxidation pond, and leery of a water treatment plant because the capex is potentially so large when it fails. I guess the aerobic system is the step below the city option. Although an aerobic system like this has a lot of moving parts, none are wallet busters, although they can nickel and dime you.


#6

It is my experience that there is no perfect deal; there will always be several things that you wish were different. But you can build a nice, private, real estate empire that can provide your family with an upper middle class income and a large measure of control over day to day life, if you keep buying opportunity and working to realize that opportunity, despite its flaws.


#7

Wise words Randy. I’ve made a few trips around the sun. I’ve made money and lost money, but overall definitely way ahead of where I started in most every way. And you are correct, there is no perfect deal, (business, opportunity, fill in the blank), but steady incremental gains make a big difference over time. As a line in a song says, “I just keep on keeping on.”