New York City · Member since 2019 · 9 posts · 1 vote
Hi all,
Would really appreciate insight on how to manage a situation with an active underground oil tank (this is our first time purchase and looking to jump into the multi-family space).
- 3 Family home in NJ
- Underground Oil tank which is currently being used by the Owner and 1 other unit (other unit is vacant)
- I'd like to make an offer on the condition the seller removes the oil tank to avoid the nightmare environmental stories I hear about
- How do I convert to Natural Gas and maintain hot water / heat for the existing tenant? Sounds like gas is far cheaper than oil as well!
Maybe I should offer over asking on the condition that the seller completes the full conversion to a new boiler system?
Maybe I should offer over asking on the condition that the seller completes the full conversion to a new boiler system?
Yes, that a good plan. I was in a similar situation, I had actually walked away from the deal when the testing I paid for indicated the tank was leaking. Then the seller contacted me and said "it's done". I'm like "what's done?", and he said the tank was removed with the proper permits and inspections, and he had installed a tank in the basement.
So after closing I ended up replacing the boiler with a gas unit, and the new tank and piping was a waste of money. Obviously it's smarter to switch to gas (some boiler can simply have the burner replaced, a good move if it's not too old) and then get rid of the tank.
@Johann Jells That's really good to hear, we currently have a conditional offer based on a Oil tank to new Gas unit conversion completed by the seller. My preference would be for a tankless water heater and a separate furnace but let's see what they respond with! (Also rolls the costs into the Mortgage so I don't take the hit up front!)
Tankless can be a problem because of their high gas and exhaust requirements. Plus for a 3U it might be hard to keep up with demand. I just have 75 gal tanks in my 3 & 4 unit places. In the one with a steam boiler, I have the supply running through an exchanger in the boiler to preheat the water so as not to get slow tank recovery when the supply water is in the low 40s. Supply temps can make a big performance difference.
@Johann Jells No it's radiators and (excuse my ignorance) but the underground oil tank powers the heating and hot water. We've gone in with an offer above asking on the condition they install a new gas furnace and hot water tank. Thanks for the headsup on tankless, I asked my broker to follow up and he received similar advice to go with a large tank.
I'm sure this isn't the only house for sale in your area. Unless you are getting a screaming deal, I would pass and find something with less excitement for your first deal.