I am looking at a park with city water and sewer. It has Orangeburg sewer lines. I know that part of the line was already replaced and since it was discovered that the sewer line ran close to the water line, both the sewer and close water line were replaced at the same time (that one portion). I was wondering if the Orangeburg is going to be a constant and expensive problem?
It has a very bad reputation.
Many buyers would not proceed with an orange burg property but if you decide to move forward you’ll definitely need to budget replacing it
Orangeberg was a joke 60 plus years ago when they put it in the ground. Plan on total replacement.
Your options are:
Pipe lining i.e. reflow or other cure in place pipe (CIPP) dont work with colapsed, deformed, offset, or other major failures. It is really only good cracked or leaking joints. So it is a bad option for Orangeburg. That leaves pipe bursting, directional drilling, or treching in a new line.
The real question is if the park will support it and what will your return be after you put 100 to 400k in cap ex. If not it just becomes one more park that will die due to failing infrastructure. The math on dropping massive capex up front demands massive discount in price, owner financing, and low or no downpayment unless your talking about a beach front property.
Thank you for your reply. I have started taking steps to obtain an estimate on total replacement. I thought if I could set aside enough of a reserve to provide security, I would just wait until I had a problem and replace a section at a time. Do you think that would be sufficient?
Thank you for the information. I always appreciate your input. If you were taking on a park with Orangeburg, would you replace all pipes at the outset or just section by section as each failed?
Once you camera the lines you will know. How big is the park? At some point the cost of repairs and roto rooter will kill you on an anual basis. I would assume replace the whole system within first 5 years for sure though. The current owner is probably well aware of the problem as they probably have a sewer guy on speed dial.
It is really hard to say what i would do until you camera it but it would make sense to do it on a street by street basis sort of approach verses 20 or 50 feet here or there as a patch approach. With any other pipe a replace the bad sections in patch approach might work but orangeberg is just a distaster.
We closed on a 150-space park last quarter where about 35% of sewer pipes were still Orangeburg. For us it boiled down to fully-burdened economics and tolerance for a big capital project. Our deal made sense for us because we (1) bought the park at a steep discount (11% cap in a 6-7% cap market), (2) structured the deal for seller-carry financing with a 10% down payment with interest-only payments, (3) budgeted 200% of the estimated cost to completely replace the Orangeburg and (4) The park was in a great market (very high demand, $450 lot rent, etc) and had so many compelling things going for it. With the $350K or so of CapEx baked in we are still at a 25%+ Cash-on-Cash return on this park so this one made sense - however, most Orangeburg deals we’ve seen do not and we’re better off walking.
We currently have two full-time crews with trenchers laying new lines - with some luck we will finish the project by the end of the summer.
How many feet of mainline are you laying and what size is it? Are you redoing the service laterals as well? What do you think the cost per foot will be all said and done? I think most dont really understand what they are signing up for when they do a repipe project. Im glad to see the deal was compelling enough to take the head ache and risk. You bought right its hard to find sellers who really understand how much it really decimates thr value of their park.