House on septic that's not up to code, should I close?

[Pat Jackson]

I have a 2/1 under contract for 28,500. ARV 70,000. Would rent 700-750 rehabbed. In a nice B neighborhood. Needs ~20k in updates, not including septic updates. I bid on it not knowing it's on septic.

I signed the contract paperwork and learned about the septic.  I had a full inspection, including an inspection on the septic.  It functions property, and no water from the leach fields surfaced during the test.  However, it's 500 gallons.  Missouri code (where the house is) is a minimum of 1000 gallons.

I called the city, the house is over 200' away from city sewer, so I can never be forced to connect to city sewer.  The lot is .4 acres, with good loam soil.  It would be easy to put in a 1000 gallon tank, it would just cost 5k.

I've also talked to lenders, they will lend on this house without inspecting the septic.  I'd prefer to flip this house, but would be ok with renting it.

Thoughts on closing?  Hope I provided enough information!