I'm looking at my first MHP purchase and my attorney suggested I get a Phase 1 Environmental Study done. Is anyone doing this or have any experience with it? Or not doing it and feel good about it? Thanks in advance for your help.
if you don’t do a Phase 1 and contamination is found on your property, you could be liable for cleanup and possibly damages
@Jared Lillard They are not cheap, but depending on where you are buying, its far less costly than the alternative: paying to remediate a contaminated site.
You know which is one of the few agency's scarier than the IRS? The Federal or state EPA.
I have had Phase 1 and Phase 2 ESA's performed as part of diligence. Also remember if you don't do one and close, and then you come to find out there is an environmental issue - you basically won't be able to easily unload the property without taking a loss.
The extent of monitoring and remediation is very site specific - it's difficult to broadly state "it's always expensive to remediate" But to know how much it will cost to remediate costs a lot since a Phase 1 + Phase 2 can cost upwards of 20K or more depending on the size of the site and study area. This is the only way to know the extent of the contamination and whether groundwater is impacted, requires long term monitoring, etc.
The common approach is this: perform a Phase 1 for $1,500 as one of your final Due Diligence activities and if it does not pass then walk away.
@Jared Lillard Yes, you should get it done despite it being pricey. The consequences could be high if you don't. Good luck!
My attorney suggested this, but I thought it would be good to check with the BP community, too. Thank you all!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing