Utility Line Nightmares? Here's How to Handle Them Effectively

Don’t Get Blindsided: A Real Estate Investor’s Guide to Unexpected Utility Lines

Real estate investors often expect challenges with tenants, rehab budgets, or financing. But one silent deal-killer is buried underground: utility line issues. Sewer, water, gas, and electric lines can derail a project if you’re unprepared.

Why It Matters

• According to the Common Ground Alliance, an underground utility line is damaged every 6 minutes in the U.S.
• Repair costs can run $5,000–$25,000+, and delays can kill profit margins.
• If you hit a line without proper clearance, you could face legal liability and fines.

Action Steps for Investors

1. Call 811 Before You Dig 🛑
   Always contact the national 811 hotline before excavation. Utility companies

will mark underground lines at no cost. This step is legally required in most states.

1. Review the Survey & Title Exceptions 📜
   When purchasing, check surveys and title docs for easements. Utility easements can restrict how you build, fence, or landscape.
2. Budget for the Unexpected 💰
   Always keep a contingency fund (5–10% of project costs) for unexpected site issues like rerouting utilities.
3. Bring in Experts Early 👷
   If you suspect problems (e.g., old sewer lines, rural water supply), hire a civil engineer or utility contractor to inspect before closing.
4. Negotiate with Sellers 🤝
   If utility repairs are discovered during due diligence, use it to negotiate a lower purchase price—or require the seller to fix them.

Key Takeaway

Utility line issues can stop a project in its tracks. But with the right due diligence, expert help, and financial buffer, you can protect your investment and keep projects moving forward.

At Longhorn Funding, we know speed and certainty are critical. That’s why we encourage borrowers to plan ahead for hidden risks like utility line surprises—so your hard money funding and execution stay smooth.