Northern California · Member since 2019 · 106 posts · 5 votes
Hi,
I am getting inspection done on a house, for which the water district has shut off the water perhaps due to non-payment by trustee (attorney) after owner’s demise.
The house requires a lot of work done in order to rehab it. May need to taken it down to the stud, remediate electrical hazard, get all the additions and alterations brought back to code or demolished, possible asbestos abatement, lead paint remediation, water fixture upgrade to the new code.
Estimates from a couple of contractors run anywhere from 150-200K to rehab this property. Given this circumstances, what other risks I may have if the water is shut off and plumbing can’t be inspected?
Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Jeff Cliff - You can still test the lines for leaks by pressurizing it with an air compressor. Pressurize the line and let it sit for an 30min to an hour. If it loses pressure then you have a leak
If the water is off, there may be plumbing issues once it gets turned back on. Put a contingency in to have it inspected just before closing AFTER the water has been turned on and ensure those costs are paid by the seller along with any outstanding bills. You can hold money back at closing as well and have it released within a week or two of closing to give you time to check the plumbing.
Thank you for your response. I think the trustee doesn't want to do anything so even if I put additional contingencies its not going to make any difference. Hence the question, besides walking away what else can I do? Also, considering I am going to have to take the hose back to studs do I even bother at this point that the water is shut off?
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
On every REO we've purchased the water has been shut off. What we do is have the water company unlock the meter but not actually turn the water on (unless we're there). Then we turn it on with one person by the meter and one in the house in case there's a leak. None of the houses we've purchased this way have had water leaks. (one had disconnected plumbing in a bathroom but we were aware of that ahead of time)
How can a rehab cost that much? Is it a huge house? You can build a 3/2 from the ground up for that amount of money in Georgia.
Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Jeff Cliff - You can still test the lines for leaks by pressurizing it with an air compressor. Pressurize the line and let it sit for an 30min to an hour. If it loses pressure then you have a leak
Thank you that is a good idea. I will try to contact the water district and see if we can do something like this. I know the rehab cost quote is pretty high, but again this is a property in CA in a desirable location.
Yeah I will ensure that but just for my knowledge. In case, if they are not paid off for what-so-ever reason can water district or utility company ask new owner to pay them and/or penalize them?
Estimates from a couple of contractors run anywhere from 150-200K to rehab this property. Given this circumstances, what other risks I may have if the water is shut off and plumbing can’t be inspected?
Given the rehab costs, minimal. You might want to have the sewer pipes inspected with a camera. This can be done with the water shut off.
New to Real Estate · Member since 2021 · 104 posts · 30 votes
5y
Thanks for posting this @Jeff Cliff I am on the fence about a bank owned property with the water shut off at the street. Unfortunately the numbers are a bit too tight for enthusiastic purchase and it already has multiple offers on it. It's unlikely they will accept an offer with lots of contingencies.
New to Real Estate · Member since 2021 · 104 posts · 30 votes
5y
@John Teachout would you please explain in a little more detail what unlocking the water meter on and then turning on the water on accomplishes? I get why you want the person inside- to see if there is a leak...but why is there someone at the meter? Couldn't a leak be in a wall? Thanks!
@John Teachout would you please explain in a little more detail what unlocking the water meter on and then turning on the water on accomplishes? I get why you want the person inside- to see if there is a leak...but why is there someone at the meter? Couldn't a leak be in a wall? Thanks!
The person is by the meter because that's where the valve is that turns the water on and off. "unlocking" the meter is literally removing the lock that keeps it from getting turned on by a non-paying customer. The water company removes the lock but doesn't turn the valve to the on position. We do that but only with a person inside the house that can yell "Turn it off! Turn it off!. Unfortunately, I've heard that a number of times when testing the integrity of the plumbing. And yes, a leak could be anywhere.
@John Teachout Thanks for the more detailed explanation. I have decided not to move forward on this particular property but may need it in the future!
Water shutoffs vary a lot depending on where in the country you are. In northern states they're often in the basement. Here in the south, they're typically in the front yard of the house and the meter box contains the meter and shutoff and typically about 12" below grade.