Well and Septic

I’m looking at my first park, 42 spots, mostly all TOH. It hits most of my points except well and septic. Looking at buying it around a 10 cap, with 75% occ. What should I be looking at in due diligence on the water and septic? there may be a option to hook into city sewer and water, not sure yet though

I own two parks with well and one with septic.

Main things I looked for:

  1. is the well pump in good condition or will it need to be replaced?
  2. water table? Is it drying soon or in an area where it’s not a factor?
  3. good track record from testing results from the well water? Has it ever failed? If so where and how? How often? Important to know if the quality of the water isn’t there.
  4. when was it built, by which company and what’s the lifespan of it?
  5. if the well were to catastrophically fail and had to be completely replaced, including a new hole, do you have proper setbacks in the park, and how much will it cost? Does that bankrupt you or can you afford it? Set this money aside.
  6. is it a septic tank per Home or for the whole park or multiple for the park? In my experience per Home gets messier and more expensive, not to mention if it fails, you may have to cannibalize a lot to use as septic.
  7. on that note, do you have extra land in case you need more septic spots? The only park I own in septic is a large field with only one large tank and I can easily have the space for very many new tank spots. Do you in this park?
  8. how often does the owner pump the tanks? Once a year is minimum, once every 6 months is what I suggest.
  9. condition of the septic tank and material? Consider replacement costs.
  10. any lift stations or control panels? These can be expensive too in case of failure. Good to consider.
  11. are these utilities properly installed and have the required health department permits? (Depending on state or county). Sometimes mom and pop build
    Illegal utilities and when sold the authorities come by…

Those were at the top of my head. I sleep well at night despite the warnings of other owners. If anything city water and sewer has been a bigger headache for me due to difficult to find leaks and proper submetering billing and installation (cold climate). Your mileage may vary…

2 Likes

Gonzolo hit a lot of good points. I’d add, check regulations on testing - my wells are regulated by the state (testing required according to a schedule they set). Always worth a call to make sure everything has been done above-board.
Check water usage and make sure it’s in the ballpark of expectations.
Make sure you’re making enough money in case things go wrong. Personally I pull a line of credit on top of having cash on hand. 10 cap you’re probably fine especially if you have upside.
Check rent comps in the area factoring water and sewer. I find mom and pops undervalue providing water and sewer.

Which state? …the state requirements are different.

I have well and septic in Illinois; Illinois requires chemicals and sampling - these things are the largest expense!