Massachusetts Title V on a flip

7 Replies

Good evening!

Hey everyone,

I walked through a single family flip with my GC today and the big wild card is the septic. The seller claims it’s a septic “installed many years ago” he said its been pumped every year but it hasn’t been inspected in some time. The only documentation I could pull from town records is something from the 1940s and it mentions a “cess pool”. The property is 50 feet yards from a large pond and the town requires the septic company to fill out a report any time a tank in that area is pumped. I was told by my GC that depending on the perc test the town could make me put in some $40,000 system if the water table is high. I'm trying to perform my due diligence so maybe I call the health department to see what's been installed in the area recently? Or if they have specific requirements for that area? What do you think? If I make my offer subject to inspection, what actions should I take during the inspection? Any feedback would be helpful!!

Your GC is right - a failed septic could be a huge repair ticket and eat all your profits. The best person to call is the local Title V inspector who can look at your system. Most towns have qualified inspectors on their city website for your use - that's your best resource and a few hundred dollars to inspect the system is well worth your risk of buying a lemon. 

Hey @Craig Fogarty , if you are looking Northwest/Merrimack Valley area let me know and I can tell you who I use.

What @Lien Vuong said is spot on.  Spend the money to do the inspection.  The last three houses I looked at in MA, with septic, all failed title V.  I realize this is just anecdotal but still points to the risk.

The reality is most people don't understand septic/cess pools and don't properly care for them.  My primary residence is on septic and we are good about pumping but I know many around me who aren't.

Few hundred to insure against 20-40K...not a terrible deal in our game!

We are currently working on two projects with septic issues.  When I offer on a home that says Septic is buyer responsibility then I assume its dead and bake in the $30k+ to my offer.  This is almost always.  However I recently went to offer on a  home built in 2002 with a septic and did not deduct for that one.  It is a gamble.  The other way is to do a title 5 test yourself during your due diligence period.  That 500-800 dollars may be well worth your piece of mind

Title 5 is not required by the state, but rather by the mortgage company.  You can guy a home cash or with hard money with a filed or un tested septic.  This is a good way to get some deals as not every investor wants to deal with the variable of a new septic. You really have to do your research to see the ledge and the water table in the area