Private utilities (water system) in a park

When evaluating a park, I have heard a lot about private utilities versus municipal utilities.  What type of things would one need to look out for if a particular park had a water utility that consisted of a pump house, a water main down the middle of the road serving the houses, and regular testing from state water regulators?  Is this a deal killer?  Where could one find a consultant knowledgeable about these types of systems to hire during the due diligence process?

So that is a well. I would start by locating the system on the state wellhead regulation site to see if the well is permitted. There is also a national web site that will show any issues with the water or testing. These will also show you the flow rate and uses for the water. There are local people you can use, like someone that works on wells or does drilling. There are some private utility experts that only perform due diligence on private utility’s. While this might not kill your deal, you must really get a good snapshot of what your have and what you can expect.

If this is your first deal and you don’t have a ton of money sitting around, don’t buy a deal that is not on city water. A ton of risk and worry, and no upside, as it severely reduces your future buyer pool for your exit. City water and city sewer are one of the key ingredients to a successful park.

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