Hello - I am in the process of purchasing a 6-unit property - it’s on 3 acres so has room for expansion and seems like a decent low-risk, low-reward property to get my feet wet.
I know Frank said that a Phase 1 was essential during due diligence, but am wondering if maybe a property this small would be the exception to the rule. Is there a cutoff with the # of units in a park where a Phase 1 would not be necessary? Any thoughts would be appreciated…
One way to look at it is. Would you drive a car around with no insurance just because it was cheap. The third party reports that are like your insurance policy are one reason small parks need to be bought at much higher returns. I have thought about the same thing on a 10 unit park near me but if there is contamination found down the road, your low return park will bankrupt you.
That’s just one point of view in justifying the cost. Real world experience probably comes down to risk tolerance.
Ken
Yes that does make a lot of sense when you put it like that - not worth the risk just to save a few bucks. Thanks
You need to get one. If you have the money to expand 3 acres then spending $1,500 for an ESA is an easy decision.
Even if the Seller has a Phase 1 I would still contact the company that performed it to have it updated - that should be less expensive.
Will do. Thanks for the tip
Yes, just in case the first two responses were not clear, you ALWAYS get a Phase 1 when buying a park 