Ran out of money... Tampa, Fl. (Riverview)

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Ran out of money... Tampa, Fl. (Riverview)

Christopher Wand
Contractor · Tampa, FL · Member since 2015 · 19 posts · 1 vote

So a little back story before this question and I'm hoping I can get some ideas on how to resolve it.

I've purchased a duplex property on well and septic.

$89,500

2/1 800sf & studio/1 400sf.

(Terrible buy in and a bad deal situation that I should of walked away from when the previous owner wouldn't negotiate at all.) That being said, it's mine and I own it now. We finished the interior renovation and cleaned up the exterior for the most part. I assumed we would have another year on the septic and well before needing anything major.

The studio brings in $650 currently and the front unit I'm staying in.

I 've spoken to a couple septic guys and water guys. The septic system needs to be replaced because of the water table in our location and the damaged drain field. The well water needs to be treated for the sulfur and Iron content to really make it useable. All in these items are respectively $8,200 septic and $6,000 for the water.

I'm tapped out... I have $5,000 left on my line of credit and I need options. I'm scared of going for an ARV appraisal this soon because I didn't pull permits for the interior work and in this county it may be big negative.

I own a townhome that I've been wanting to unload but, currently cashflows so I haven't really done anything with it.

Any ideas would be great. I feel like I'm leveraged up and I'm concerned about more unbacked credit and paying it off.

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  • Robert Berganza
    Contractor · Lakeland, FL · Member since 2016 · 21 posts · 11 votes
    10y
    At this point, is the county in on your well and septic issues, or are they items only you and your tenant know need to be addressed?
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  • Nicholas W.
    Investor · Germantown, WI · Member since 2012 · 206 posts · 364 votes
    10y

    I'm not saying it's the best decision but considering the cost of well drilling and septic systems many of the installation contractors offer third party financing. You could call around and ask if any of them offer that.
    Honestly $8200 and $6000 for a septic and a well isn't all that bad. My septic system install alone was $14k. Here in Wisconsin it it standard to do a "well water and septic" test during any real estate transaction. Obviously hind sight is 20/20 but something to keep in mind for next time.
    Good luck with it all.

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  • Scott Schultz
    Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
    10y

    For FL the Well Price seems high, are you needing to go deep with it? you should be able to reuse your pump and equipment unless you need a submersible.  up her i can have a 100 foot well with a submersible pump installed for about $4K, cant imagine your going 100 ft. and most of the equipment down there is shallow well stuff, so id guess you could get it drilled and piped for $2500

    Septic seems appropriate, can you limp it along? maybe enzymes, or some of the systems for failing systems that are out there? 

    as far as the money, do appraisers check with code enforcement? i've never heard of any doing that up here, the valuation for a loan doesnt go to the municipality from my experience, but most areas im in you dont need permits either. 

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  • Christopher Wand
    OP
    Contractor · Tampa, FL · Member since 2015 · 19 posts · 1 vote
    10y

    @Robert Berganza

    No, the sanitary lines and water lines are literally less than a 1000 yards down. I've called for pricing on both to extend and they were something ridiculous $20,000 for each. 

    The pricing for the well I should of been more specific. The cost is to treat the water, heavy iron and sulfur. The cost is for a water softener and filter system.

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  • Christopher Wand
    OP
    Contractor · Tampa, FL · Member since 2015 · 19 posts · 1 vote
    10y

    @Nicholas W.

    I'm kind of thinking you're correct. I probably just need to look further for financing. Currently I've been looking for cheapest.

    The water filtration system I need I know I can finance. The septic is what I'm more concerned about.

    Thanks for the input. I probably just need to continue searching. I'm running out of time though...

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  • Christopher Wand
    OP
    Contractor · Tampa, FL · Member since 2015 · 19 posts · 1 vote
    10y

    @Scott Schultz

    Sorry about misleading the well problem. I need to filter out problems in the water. Heavy iron, sulfur, and tannins. The price I've received was for a filtration system.

    Septic system is failing mostly because of the water table. The drain field has been damaged by trees but, I'm limping along currently. I just don't want to lose a tenant and then start construction and then try and perform the repair while attempting to relist.

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  • Robert Berganza
    Contractor · Lakeland, FL · Member since 2016 · 21 posts · 11 votes
    10y

    I really think you need to look into second opinions. Unless the water is horrendous, if it's only a duplex could you not buy and instal and water softener and filter from Home Depot ($500 or so each piece) and install it yourself? I had very hard water in my personal home and fixed it in an afternoon. But again, I don't know what you're actually working with. As far as the septic, unless you can help it along with pumping it out and adding enzymes, I don't know what to tell you. 

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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    10y

    With regards to ARV for a refi, like @Scott Schultz noted, appraisers (and home inspectors for that matter) typically just observe what they see and appraise the home based on its present condition. They do not generally check for permits. 

    The only time I typically see permits checked during a closing is by the title company when they run a lien search, and that's just to confirm there are no open permits that have not been closed out by a final inspection.

    Also, many interior renovations do not even require a permit (plumbing, electrical, windows, and structural changes certainly do, but not cosmetic stuff such as flooring, cabinets, countertops, painting, light fixtures, etc).

    My point being, refinancing may be a viable option (it sounds like you were already thinking along those lines). But it also depends on your exit strategy. 

    If you're just looking to get by until you can re-sell, then it may not be worth the hassle. But if you intend to hold it as a rental, now is as good a time as any to refinance, and the hard water and sewer issues aren't going to be visible to an appraiser, so they should not affect the value, per se (admittedly, they might hold up a sale based on inspection results, but they should not really impact an appraisal).

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