What do you do with this property?

[Michael Rutkowski]

I've got this property on my mind which has been keeping me up at nights. I want it so bad, but there is really nothing which can be done with it. Let me explain.

The BAD: This is an 8 unit mobile home park, of which half is in a FEMA designated floodway. Not a floodzone, but floodway. As such, it cannot be financed, underwritten by any sort of entity, or even insured in any form. The septic system is obviously failing. I walked the property and noticed that it was creating a swamp, rather than functioning properly, and pulled all septic permits since 1969. It's a disaster. The county sanitarian will not approve a new septic permit. The county will require a permit "for any ounce of soil moved" on the property, and the neighbors want this mobile home park gone. Raising rents is a dangerous game here. If someone leaves, their mobile can't be replaced. That's it. If the septic or well fails, that's it. In fact, if a tenant even leaves, I can't fill it with another without breaking county laws, unless they sell it to me, which just isn't going to happen. Eviction requires 180 days in my state, unless they break some rules in our agreement. Rents are so low, that if I double them, they may stay though...

The GOOD: Owners seemed receptive to a Master Lease, and rents have never been raised. I could double the rent over 2 years to get them up to market value, and get a 16% CAP on the property, that is, if it was mine. Otherwise it would only generate about $1200/mth for me, but for a lot of work and hassle (county meetings, deadbeat tenants that I can't even evict because they own the mobiles). That's without any improvements. I also will stipulate a contingency on habitability in my lease, stating if the septic fails, I'm out of the picture. It is 5 acres, on a beautiful island in a river, in the middle of one of the most touristed areas in North America. I want that land, but even with the mobile home park gone, I'm not even sure I could build on it... It has amazing Freeway visibility (no chance of billboards). Right in the middle of town, but on county land (low taxes + all city services).

What would you do with this? I can't find a business model which would work in the long term for me here. Can't have a tree farm because I would need to upgrade the well. I can't farm in general. A campground would be regulated like a subdivision per county regs, and that wouldn't fly. Right now, with the neighbors, and county, it seems like no business would ever work on that property. The mobile home park is doomed, and you can't remove trees or plants because it is in a sensitive ecological riparian area. I want to build a house on it, but I would not be allowed to have a bathroom.

Is there any use for a piece of land like this except for picnics?