New w/interesting one as potential (sort of ) first investment

[Beth Clerc]

Hello everyone. I’ve heard lots of good things about this forum and am excited to join. Quick real estate background is that I bought, lived in, fixed up and sold 2 foreclosures. I've completed my RE Salesperson schooling and passed the state and school tests but probably won’t become an agent for a while (if at all). I have a busy, demanding job as a paralegal w/a major corporation and a very long commute. I live in SE NY. I have over 20 ys experience in the legal field. In the fall my youngest will be going to college. My goal is to hopefully transition to real estate investing and leave the corporate world – it’s just those darn benefits that have kept me there this long.

I wanted to share my first potential purchase not necessarily for advice at this point but because it has an interesting twist that may be helpful to others and not something everyone would think about when purchasing. Today I am going w/my S.O. (a NYS home inspector) to look at a 5 bdrm house in Westchester County. It is priced way, way below market value. It is not run down by any means but does need updating (cosmetic, electrical and we’ll see what else today). Aside from that, the main reason it is priced so low is that there is a major break in a shared sewer line. I have done a lot of research on this issue already and so far it hasn’t scared me away. There are 3 houses that share a driveway and two of them share a sewer line. The lines meet in the driveway and then run together across a VERY busy major road. The break is right in the middle of the road. I know the homeowner(s) are responsible for fixing it even though the break is under a road (owner is responsible from their house to wherever it meets the main municipal connection even if it runs under public road). I have already spoken to DPW supervisor and the private repair person who gave the homeowners an estimate a couple of years ago (yes it’s been going on that long).

Here’s the 2nd bad part - the other homeowner who shares the line is completely uncooperative and so far has said they won’t share cost of repair. The house I’m looking at has been vacant for the most part for 3 yrs (seller’s father went to nursing home and she just checks in on the house every month or so). There is actually raw sewage running out near the end of the driveway and road area and I understand the Board of Health has already cited the uncooperative homeowner at least once. Both other houses also look very nice from outside so it’s not that this other homeowner has neglected their house – they just don’t want to cough up the approx.. $25,000 for their portion of repair. If all goes well today I will speak to a RE attorney about this. I’m guessing worst case is I would pay for full repair then get a lien put on their house for the other part, realizing I may never get the money back. My SO said he has heard of similar things in the past and even though it is not the town’s responsibility, because it is creating a potentially dangerous situation the town will sometimes do the repair and put a lien on the homeowner who won’t pay. I’m not sure the town is at that point yet but I will look into that as well. I am obviously going to ask today and ck w/town if it is the same situation with the water line which it probably is.

The owner of the 3rd house happens to be a friend of a friend of mine. I plan on speaking to her as well. Even though she isn’t directly responsible for this repair they will have to shut her sewer off and do some type of reconnection that I’m not clear on at this point, so it involves her but apparently she isn’t responsible for sharing much (if any) of the cost. For those who aren’t familiar with major sewer line repairs they can do trenchless repair meaning they don’t have to dig up the street. It’s actually pretty cool how they do it.

If I get through today and don’t’ find anything else that makes me run, I’ll approach the next steps which will be the attorney and financing. I may be asking for advice on the financing since I’ve only done traditional in the past but I have flawless credit report and a good amount of cash avail but I’d rather not touch much of that. I’m excited but surprisingly not very nervous about possibly taking this first giant step.

Take care and I look forward to learning from you all and sharing experiences.