All Forum Posts by: Larry Bowers

 Daniel, what ended up happening? Cost of inspection, did you buy the house, what is your potential worst case if you had to replace? 

I am getting similar quotes to yours, so that's somewhat reassuring. What would you do with a $40K house with such a problem though? Do I have a bullet to dodge here or just keep calm and carry on?

Dylan, I perhaps was not clear. $10K will possibly do it for the tank, at a minimum. Likely much more thank $10K since the old one will need to be dug up and replaced. But I am rather sure I will have to connect the sewer, and at least anecdotally from what I've gathered talking to dozen or so gov't folks and contractors, I could be in for $40K. the real cost is probably lower, who knows, but we all seem to agree that $10K is a minimum. That's a lot of money on a C+ $40K house. 

I came here not seeking knowledge of septic tanks so much, but whether to sell this house and dodge a bullet or to just continue renting it out and take good care of a system that will certainly fail an inspection and hope for the best. 

I could live with that, not bad!!! That almost seems unrealistically low. But it seems you weren't required to replace the tanks, just to fix them. 

I can't get it from the horse's mouth here as to the regulations, but supposedly if you have a septic tank fail and the county learns about it, you're on the hook to remediate the damage and then connect to the sewer. A permit to fix or replace septic tank will not be granted. So it may be a don't ask don't tell situation for this septic tank. The real double whammy is that after paying $10K or more to hookup, therein begins a monthly bill to the sewer district ad infinitum. 

How big was the area they tore up to do all that, 5' x 5' or so? 

Hi Lynnette, your situation might be a bit different. Just being in California probably means the value of the home is manyfold larger than $40K. If this were a $400K house, I'd not worry about a thing. I'd just get it done, whatever was required Shoot, it probably would have been done already before I bought it. What was the cost of your repair, if you don't mind? 

How often do septic tanks back up to where the owner is forced to do something about it, say with sewage backing up in to the yard or the basement?

I realize the answer is “it depends” but here is more information.

The house in question is 1950s built 2 / 1, 900 s.f. with septic tank in an area where 95% are connected to sewer. House is worth about $40K, it’s a C+ neighborhood. No DOTs or liens against the house. I’ve had the house for two years. No septic issues, and it’s a tight little house getting a 2% rent to value ratio without major tenant hassles.

I've had a mind to sell the property, but agents have told me that buyers using FHA loans will require a septic inspection (have not verified this). Calling around to different septic tank / sewer contractors, they are telling me that a septic tank that is 70 years old will almost certainly fail a septic inspection, which kills the prospects of most retail sales. That generally leaves selling to another investor as-is.

The septic contractors have told me to expect at least a $10K to $40K job to fix the issue if the worst happens, such as with backup into the yard or the basement. Those prices are estimates whether I fix or replace the current septic tank or connect to the sanitary sewer (about 30 ft away and downhill). That’s serious dough for a house worth only $40K. The city, county, and sewer company tell me they don’t help out with the cost, it’s all put on the homeowner.

I suppose what I have now is a failing tank that’s leaking, but otherwise not failing in the sense that it likely won’t come back up into the house. Or will it? It's working now and it's 70 years old, so maybe it will just continue...or am I teetering on the edge? 

So, do I roll the dice and keep it, get the sludge cleaned out periodically, treat it with chemicals and what not, or, should I move on and sell it? 

What would you do to fix this for occupancy inspection? Inspector says that the dropoff around the stairwell is a safety hazard.

The solution needs to create a barrier at least 36” high with no more than 4" gaps from the grade anywhere there is a 30” dropoff, which would be 80% or so of the run around this stairwell. 

Inspector said either put up a fence, but plants put there would be sufficient. This is a C-level rental house, so cost wins over aesthetics. I'd say the plants would be the way to go. I'd probably buy the plants myself and have a handyman do it. 

@Carl Fischer, you were correct. I have a signature form to fill out and then the custodian will sign it. This question popped after business hours yesterday and wanted to find an answer before the next morning...so thanks for that! 

It's hard to tell sometimes if the title company is being petty and unnecessarily delaying closing by requesting an original notarized document from custodian or if it is a bona fide requirement to be legal. Since I executed the SD-IRA note myself, I figure I should be able to handle this myself too.

But in that regard, what about signing the original notes with the borrowers, is that something the custodian should also do? 

Can i sign a subordination agreement on behalf of my sd-ira? Or must the custodian do that? I have a closer that's requesting this at the 11th hour and needing the original signed subordination agreemtn to proceed. Thought we were closing tomorrow. Now it looks like Friday or even Monday if that's the case. Thanks!

@Dimitri Paspalaris

What ended up happening?