Rhode Island septic issue purchasing a multi family

[Sean Doherty]

HI everyone, I'm going to tour a property tomorrow in Rhode Island. It's a 4 unit in a location that I like. The issue is the property currently has a cess pool and needs a septic in order for the seller to actually sell it but apparently the seller doesn't have the money to install a septic, he wants to use the money from the sale to do the septic. Is this even possible? how's he going to get the money from a sale to install the septic if he can't make a sale until it has the new septic? I originally wanted to use a 203k loan on a property i could house hack but I'm not sure if that will work here. Is there anyway I can get this property under contract/purchased with a contigency that the seller has to use the money to install a new septic? What are some financing options I could use in this situation? thanks for your help there any way I can structure some financing to

[Al Murray]

Hi Sean,

Who is requiring the septic to be installed before the sale?  Is it occupied? In most cases, you can have an addendum waiving such things (check with your attorney as I am not giving any legal advice).  Another way to settle that is, If you're paying cash/hard money, having the seller put the property into a trust and you transfer ownership interest in the trust.  Also, you could possibly do an escrow hold-back, where at closing the cost of the septic is held for the install.  If there is no mortgage on the property, you could give the seller the money to install the septic as a mortgage in the 1st position to protest your money.

When dealing with banks, they can complicate things so, the 203k could take some time or not even close the deal.

Hope this helps