Hey guys and gals. So I’ve come across a potential MHP deal and wanted to get some feedback from people who have been here before. It’s a pretty big dump, but it’s surrounded by a good community of houses. It is a rough crowd of tenants, I’ll have to rebuild roads, deal with this septic issue, and scrap about 20 condemned trailers.My plan is to clear out the property of all homes and tenants, bring in new homes, and lease to own until full. I understand the costs associated with this will be large and I am prepared for that. Ive started talking to some people with knowledge of the area and the first thing I have learned is there are many sites with leaking septic tanks. My question right now is, what is the process to fix this? Can you just come in and drop new tanks on the lots or is there an expensive environmental remediation required? Im sure it varies state to state but I’d be interested to hear anyone’s similar experiences. The park is in Alabama. Thanks in advance!!

Hey @Josh Carlegis . Check with the local health dept and talk with a few local septic companies. They’ll set you straight. 

And Go Gamecocks!

Thanks Jay. Planning on that next week. You just have gone here if you know about JSU lol.🐔

Originally posted by @Josh Carlegis :

Thanks Jay. Planning on that next week. You just have gone here if you know about JSU lol.🐔

 Yes. Graduated in 2001. 

@Josh Carlegis  

@Jay Helms gave you great advice to get quotes from a few local septic guys. Depending on when the tanks/ leach fields were installed could drive a lot of your costs. Regulations could have changed a lot in the meantime and the potential exists that you'll have to install an entirely new system (tank+ leach field). 

How did you find out the tanks leak? Does each house have its own system?

Find the best septic company in your area and have them scope the pipes as part of DD. This will answer all of your questions about the health of all the systems and allow you to see what type of expenses you'll end up having.

@Josh Carlegis You may want to talk to any contractors and/or companies that have worked on the park. Also, if you talk to some septic companies and any local government entity in your area who may oversee this area if it comes to installation and inspection (such as what @Jay Helms ) mentioned, they may give you a better of idea of what you're getting yourself into. If it's a rough crowd, most likely you will have plumbing issues if they are not trained properly on what can and cannot be put down the drains/toilets. Good luck! 

How is this going @Josh Carlegis ?  Did you move forward with the deal?  Either way, what did you learn about the septic issues and solutions?

Generally speaking  , septic tanks themselves dont leak   ( unless they are steel )  its usually drainfield problems . 

Samuel, the deal ended up not going through. We a little too far apart on the value. The seller thought a MHP that was 16% occupied needed to trade on a 10 CAP of revenue (including the income off the 3 trailers on owner finance). It will continue to spiral further downward, if that’s possible. As with all things in real estate, sometimes the deals you miss turn out to be the best. I would have been completely tied up with capital and time in the rehab of that property when a tornado came through town in March. Since I wasn’t stuck in that, I’ve been able to take that capital and buy 18 doors at huge discounts since that deal fell through. What was going to net me about $200k in equity after a gigantic headache, is going to end up netting conservatively about $400k in equity with minimal headache. I couldn’t have pulled the other deals off if I was tied up in that park.