What are you paying to bring in a mobile home? Park is on septic and well water?
How expensive is it to add a new septic system?
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Moving-in a MH and getting it set up, skirted and with a small 5’x5’ deck is $4,000 - $4,500 depending on where you are.Septic tends to run around $5,000 per house for new construction. If you are repairing, it’ll be less. You probably won’t have to replace the tanks. It’s the lateral lines that go bad after 25 years or so.But if I were you, I’d not buy a MHP on septic unless city water runs immediately infront of the park.My 2 cents worth,-jl-
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Jefferson are you saying that you can’t make money with septic and well? I’m just asking because I see so many people frown upon this.
Ty, you need to build in the cost of operating a septic into your numbers. The lateral lines that Jefferson speaks of are nothing more than perforated tubes that send waste into the ground to be cleaned by mother nature. When you have a mobile home park, you have to accept that tenants don’t make good choices about what they send through your sewage system. Things like grease, cigarette butts, paper, etc. cause problems for septics and you need to build this type of thing into your numbers. Having the city sewer in front of the park gives you options in the event that septic becomes too costly to own.
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Do some research on the problems and costs associated with septic. And wells too, for that matter. When I started shopping for a park, my mentor made sure I made city water/city sewer a MUST HAVE. And looking at the costs of repairing either, I’m soooo glad I did. And being on either will reduce the attractiveness of the park when you go to sell it.My small Arizona park (city water, city sewer) is for sale. Email dkshinnick@gmail.com for a PDF describing it.:0)
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Ty, the costs for Moving a Mobile Home & Setup for a Singlewide (16 x 80) in South Carolina are:- Moving, Block, Tie Down & Level: $2,100- Underskirting - New: $800- Stairs - New Wooden - Front: $400 - Stairs - New Wooden - Back: $400Septic Tanks are fine if you have the following:- One Septic Tank Per Mobile Home- Septic Tank Drain Lines Sufficient For The # Of Bedrooms In Mobile Home- Sufficient Amount Of Area To Drain Septic Lines- Soil Conditions Conducive To Draining Septic LinesWith Septic Tanks you will need to do one of the following:- Pump Septic Tank Of Scum, Liquids & Sludge- Replace Drain Lines We wish you the very best!
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We have NOT pumped a septic tank in 15 years–the design of the system is the fix. We have opened tanks and find less than a third solids. Our only problem have been tree roots (we then remove the tree) and personal wipes. As mentioned before if the perk rate is good and with enough lateral lines if the scum and etc, does not enter lateral lines 50 years is easily possible and never need to replace a correctly placed concrete tank. We have utilized septic tanks and package plants for over 30 years BUT with that said I would NOT presently buy a park with septic knowing what EPA is planning. EPA can be the thief that keeps on demanding more control and paper work. .
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Carl makes a good point above, the septic system should be good for 50 years, generally, depending on soil conditions and soil leach rates. The tree roots can be dealt with by a professional service that poisons the root from inside the pipe or line. Look online or in the yellow pages, you want someone who specializes in this and who will give you a time based warranty.The wipes are a different story. They are not digestible in a sewer plant, a package plant, or a septic tank. In addition, they have a tendency to snag on the inside of sewer lines, pile up or stack up where the flow is low, and foul pumps at lift stations and grinders at sewer plants. The best thing to do, in my opinion, is to outlaw their disposal in your sewer system no matter what type of system you have. An insidious feature to the wipes occurs when they get into your leach field. They will plug the leach field pipes thus robbing some of the capacity and accelerating their replacement. Your tenants should be able to use wipes, but they have to dispose of them in the normal trash and not in the sewer system. Last point on wipes: most are labeled ‘Not Flushable’ but some are labeled to be flushable. For clarity, none of them are flushable, period, no matter what anybody says, because none of them disintegrate or decompose in the sewer process stream.A sanitary sewer system is only designed for the 3 P’s to go into it, as follows: Pee, Poop, and (toilet) Paper. For more info look at the Orange County Sanitation District website, ocsd.org , as I recall.Jim Allen
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I’m not saying you can’t make money with septic and well. But here’s the nightmare scenario I’m trying to steer you away from:1. You buy a MHP with septic and well for a ‘reasonable’ 10%-cap after being assured by your state’s DEQ that your system is functioning normally2. A month later your ‘friendly’ government DEQ inspector says he/she believes your well or septic has failed (or simply does not meet the EPA’s new unreasonably high standards). You protest and point out that the DEQ just told you everything was fine. The inspector smiles wryly and says 'that is not my department that told you everything was fine. You must prove your systems are working properly and make any needed repairs.'3. Government gives you 120 days to completely re-do your well and septic. The cost to make the upgrades will likely be 2x or 3x what your entire park’s earnings are for the year.4. Your bank ‘took a flyer’ on investing in you and a MHP, but they now clearly see that you are a fool, and have made a fool of them, and they don’t lend you more money for the improvements.5. You now either come out-of-pocket for the upgrades, or declare bankruptcy. Thanks for playing.Just don’t ‘go there’ for your first park. Learn this business on a park that has city water and city sewer. Maybe later once you have cash in the bank and more experience, you might consider buying a park with private utilities - if you can get it at more like a 12%-cap and/or a park with 50% upside in rents. Dramatically improving profits will go a long way to paying for any unexpected surprises - especially if the surprises come several years or a decade into banking higher earnings into your pocket. But most ‘newbies’ getting into this business do not hold-back enough in reserve to cover unexpected surprises, so this nightmare scenario is not one from which most newbies can recover.Make it easy on yourself for your first park. Buy all-city utilities. Even if it costs you an 8%-cap.My 2 cents worth,-jl-
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Jefferson has a very valid point when it comes to investing. This includes all types of investing. Know what you are doing by starting with a investment plan offering the least amount of risk. A investors level of risk is usually proportionate to their level of experience not the particular details of the investment vehicle involved.Start with a 6-8 cap in the city and leave the higher profit properties to experienced investors that can buy a 12 cap without the worries of the higher risks.Ty_ It is not that a investor can not make money in a property on well and septic, quite the opposite in fact the profit margins can be much higher, it is that you simply need to know more about what you are doing when going into the investment to realise those higher profits. Knowledge mitigates risk and increases profit margins.
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In one of our parks our cost for the last 15 years has been less than $1,000 dollars for the septic system and our water cost including electricity and chemicals are less than $175 per month on 140 units. As per above comments do not buy a park with well or septic if your are inexperience. Jefferson is right on and the EPA is the thief in the night that we NEVER know their next group of people to take on and yes the cost could be devastating. Right now the night mare for wells is nitrates where the legal limits is 10 or less ppm and many places where agriculture is dominate the rates are above 30 which is illegal to sell and very costly to correct. Many Midwest cities including Ohio are facing difficult situations and the costs WILL BE passed on. At times buyers thing there are in a safe area, EPA is presently at Dallas, Texas looking at over 200 possible new contaminates to test for and have more regulations that can be very costly. Presently my cost of testing for water is more than our residents usage cost–never though that could be possible.
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I don’t own a park yet so take my words with a grain of salt. I spoke to Jefferson a while back about a variety of things, and he told me not to buy septic, at least not for my first park… I said, “sure”. Then as I started generating leads, I came upon a wide variety of parks with decent cap rates and occupancy with Septic and Well (or city Sewer and Well, or City water and Septic). I was until the last week or two EXTREMELY tempted to make offers on them, especially if I could get non recourse financing.However, in the last week or two I’ve had three separate conversations with three separate owners, all relating to the insane costs of replacing Septic, all having to do with the EPA. They are coming down hard and that is my big worry on septic/well. There was actually a park listed on MobileHomeParkStore.com that was cheap, I knew there had to be a catch. Googled around, they are consistently failing every EPA/state inspection on their well. Good luck with that.So it comes down to a risk thing, but what you need to realize that it’s more then just maintenance risk, there’s also regulatory risk, which to me is what kills those deals. That wasn’t clear to me when I looked into it, so I hope I’m saving someone some grief.
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There is going to be a window of opportunity in the future for shrewd investors to capitalise on the actions of the EPA. Mom and pop park owners are going to be forced into bankruptcy due to high costs of upgrading water and septic. This will result in the sale of rural parks for pennies on the dollar. Knowing there is a solution to every problem investors with money will be snapping them up and putting money into necessary upgrades. My guess is that local governments may even throw in some money to insure the residents do not end up homeless. Every dark cloud has a silver lining.
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Greg makes a real good point about the EPA and sewer systems. It seems like there is now, or will be in the near future, a huge opportunity for people who want to fix MHPs with sewer collection and treatment issues. To be clear, I’m not saying take advantage of mom & pop operations, I’m saying let the numbers do the talking in any proposed purchase of a park that doesn’t have city sewer service. And from Frank and Dave’s book the 10/20 MHP System I got the idea that 1) there must be quite a few parks with sewer problems and 2) the local authorities, whether cities or counties, could be enlisted with financial help and expedited permits to help solve the problem. Further, while many cities currently find MHPs repulsive, I think there will come a time when they again embrace their existence and even construction. Every city and every county in the US will need, and in fact needs now, housing for their working poor population. Voila! well run MHPs to the rescue. By the way, waste water collection and treatment isn’t rocket science, although some gov’t agencies would have you believe so. Like Jefferson says, and I like it, that’s ‘my 2 cents worth’. Jim Allen
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Ty, my Husband and I own two Mobile Home Parks:- Park #1: City Water & Septic Systems / 24 Lots / 10.9 Acres- Park #2: City Water & City Sewer / 65 Lots / 11.9 AcresWe WOULD buy another Mobile Home Park with:- City Water & Septic SystemsWe would NOT buy a Mobile Home Park with:- Wells AND Septic Systems[Too Big Of A Risk Of Septic Systems Contaminating Your Own Well / In SC DHEC, Department Of Health Environmental Control, Sets The Standards For Septic Systems & Wells…They Will Not Allow Wells Within A Certain Distance Of Septic Systems For The Very Reason Of Contamination]Our Park #1 has (City Water & Septic Tanks):- One Septic Tank Per Mobile Home- Very Low Housing Density (24 Lots On 10.9 Acres / 2.2 Mobile Homes Per Acre)- Well Drained Land- City WaterThere are so many different variables with MHPs with Septic Systems that you should evaluate each MHP on a case by case basis.We wish you the very best!
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@carl just curious when you say that your cost for testing is more than the resident’s usage cost - what does that mean? Are you talking hundreds of dollars per month or thousands?
Have you seen small public water providers pushing back at the EPA to be more reasonable for smaller operators, or providing more time for the testing process to become less costly? I suspect the EPA would at least have provided a position or statement that they recognize this is providing a hardship for the smaller groups - even if that position is “screw you that’s just how it’s going to be…”
Thanks for more information on your experience here…
The clean drinking water act of 1974 set the criteria for the definitions of public water systems. A community system is any system that has 15 or more connections (houses) or serves 25 or more of the same people for more than 6 months out of the year. The rules and testing are generally the same for a mhp with 15 homes or 500. So unless your park is 14 or less homes you basicly get the same rules as a city. Most states set operator certification based on size and complexity of the system. There are usually two types of licenses treatment and distribution. There is usually a small distribution system license for a system with less than 150 homes.
The real application of the 1974 act is very sketchy and have found if there are no complains very little intrusion into any system in our state. The testing varies considerable and is usually how the ones in control view the laws and how close to retirement in some cases. We know of numerous violations in wells and nothing happens or in the case of septic tanks they are to busy to enforce unless they receive complains. With our new wells the state engineers are ok to deal with but once we sent in our first test we never saw them again in two years but the number of new tests are about 1-3 per month beyond bac-t testing and yes the list continue to grow and can be very expensive versa cost of pumping and chemicals. As to Kristen most wells have some form of contamination and really the problem that septic tanks create are normally neutralized by chorine. The use of chlorine by water systems is not the most healthy way to deal with water problems as per EPA experts will say over 1 p/m will harm fish but most treated water has about 3 p/m chlorine–cancer is one problem!!!
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I completely agree the application, interpretation, and enforcement of the drinking water act varies widely. The EPA basicly said here are the rules to the states. Then the states enforce how they please. It varies state by state and county by county. If you have serious violations hoping the government looks the other way is not the best business model. Worse yet if a resident gets sick and you have had ongoing violations for years any decent attorney is going to take you to the wood shed and your insurance company is going to wash their hands and say your on your own. You just gave the insurance company an out.
Just my thoughts
Phillip Merrill
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