Flipper/Rehabber · Bridgewater, NJ · Member since 2018 · 4 posts · 1 vote
I am looking to start my real estate investing by doing a flip. As I am looking for homes in the area I want to purchase, I notice that some homes are on septic and/or have well water. So I am curious what are the costs that are associated for converting these over to sewer and public water? Also, as I am new to this should I minimize my risk and avoid these issues?
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
7y
@Richard Hernandez the key to successful flipping is keeping the 2do list short. A long list eats your profit. Sounds very simple, it is not.
If you have a property on well and septic most likly this is because there is no public sewer and water line in the road, so you can't make the conversion. If the city expands their sewer district most of the time connecting is mandatory.
So there is nothing wrong with a private well and POWT if you can leave it alone if you can, but be sure to include a well and water test and spectic inspection in your offer. In Wisconsin the seller typically pays for the test. A failing system is usully a $25k job and a new well about $10k.
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
7y
@Richard Hernandez the key to successful flipping is keeping the 2do list short. A long list eats your profit. Sounds very simple, it is not.
If you have a property on well and septic most likly this is because there is no public sewer and water line in the road, so you can't make the conversion. If the city expands their sewer district most of the time connecting is mandatory.
So there is nothing wrong with a private well and POWT if you can leave it alone if you can, but be sure to include a well and water test and spectic inspection in your offer. In Wisconsin the seller typically pays for the test. A failing system is usully a $25k job and a new well about $10k.
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
7y
If I had a choice of being on Municipal or well and septic, I will take well and septic any day, the Well is little maintenance and no bill and with exceptions, generally you may replace a pump and piping every 50 years or so unless lightning whacks the pump, still a pretty cheap fix, septics, in WI require pumping and inspection every 3 years ($150-$300) and if maintained will last 20-50+ years and depending where you are and soil type replacement would be $2,500 to $20,000 I can get a 1000 gal (3 bedroom) system replaced up north in sand country for $2500, in clay its more as often you need a mound. But I would stay off the grid if possible. Just my opinion.
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
7y
@Richard Hernandez I didnt notice that @Marcus Auerbach threw some numbers out, his numbers are on the high side for Worst case scenarios. Where is the property located? and what are the soil types? Wells rage from about $5000 to $10K for a full replacement, but unless the water is bad (contaminated) or dry you can usually fix them its litterally a hole in the ground with a pump at the bottom of the pipe, everything else is in the house and as simple as can be, a $20 pressure switch and a $100-200 pressure tank is pretty much all that usually fails. I have tons of experience in this area if you have questions.
Flipper/Rehabber · Bridgewater, NJ · Member since 2018 · 4 posts · 1 vote
7y
@Marcus Auerbach Thank you for your response and providing information on both topics. I will consider this information while I look at more properties.
Flipper/Rehabber · Bridgewater, NJ · Member since 2018 · 4 posts · 1 vote
7y
@Scott Schultz thanks for the insight and providing some numbers along with it. I am not familiar with septic or well so this was good to hear from someone who knows.
@Richard Hernandez I didnt notice that @Marcus Auerbach threw some numbers out, his numbers are on the high side for Worst case scenarios. Where is the property located? and what are the soil types? Wells rage from about $5000 to $10K for a full replacement, but unless the water is bad (contaminated) or dry you can usually fix them its litterally a hole in the ground with a pump at the bottom of the pipe, everything else is in the house and as simple as can be, a $20 pressure switch and a $100-200 pressure tank is pretty much all that usually fails. I have tons of experience in this area if you have questions.
Haha yes you are right Scott! I am used to people holding me to my numbers!! I thought Richard was talking about a flip. All of our rentals are municipal water and sewer and of course managing water bills is like herding cats - every year I have about 20% of the bill's that hit me on the property tax bill and the we have to collect from the tenants! We have to get better and be proactive in August, I missed the boat (again) this year, because my wife is a teacher and August is a travelling month. Another chance this summer I guess..
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
7y
@Marcus Auerbach Water bills were a huge deciding factor when I hired a manager, as it sits I think 50-70% of the managements fees are covered by water bills I would probably get otherwise nailed with.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
7y
Well and septic are fine depending on the condition and the area you are in. If it is unusual for the area expect to lose some buyers. If a town is half septic well it is more likely to be accepted.
You are in NJ though so in many areas of NJ expect that septic/well is unusual. It may not be acceptable to some buyers. Also WI costs for well septic will not be NJ costs. I think we paid 8k about 10 years ago for an NJ well but it depends on depth it is costed per foot. We also had to replace a pump within 3 years of that so they can have issues. In Pa we had to add filtration to the well. Like any other system estimate costs locally for rehab. That said some property types on larger lots your buyers have to expect these systems and willingly make the tradeoff.