Purchasing community well

[Aubrey Ford]

So one of the properties I own gets it water from a community well. The well serves about 74 properties (some lots are vacant)  of which currently 40 are paying and the owner estimates as many as 18 may be stealing water. She wants to sell the 1/2 acre and the two wells that feed the community as her husband who passed away set it all up and maintained it,  I don't think she has been keeping up. She says she just doesn't want to deal with it anymore as she is elderly and its a hassle for her. Claims she would make me a great deal to get rid of it... I am skeptical, but doing as much due diligence as I can. Its not really my wheelhouse. 

I am just starting the investigation to figure out if this could be profitable. These are the few numbers I have (purely based on first conversation) 

Her operating costs are about $900-$1000/month. about $450 for the county to come inspect once a month, costs of upkeep, meter reading, invoicing etc.  She says the average water bill is about $40/month which equates to Gross income of about $1800/month currently. Taxes run about $600 a year.  

I think she does not want the hassle of finding/fixing the water thieves to make the business worth keeping. But I think if I can solve the water stealing problems, this could make some good profits. 

Any advice is appreciated. 

[Bruce Woodruff]

You want to hassle with that for $700 a month? That's not a good profit, and you are stepping into a can of worms. Speaking from experience. A lot of it. How much do you plan to pull out of that $750 mo for your Capital expenses? I would suggest you put away $1000 mo for future repairs and maintenenace. Once you take over operation of the system, you will be required to keep it running (by the County Govt)

You're losing money already and you don't even have all of the true numbers. I'll bet she's lying to you so far......and you'll need to carry a pistol when you go meet with the water thieves, people don't like having their water shut off. Ask me how I know all this.....

[Aubrey Ford]

Quote from @Bruce Woodruff:

You want to hassle with that for $700 a month? That's not a good profit, and you are stepping into a can of worms. Speaking from experience. A lot of it. How much do you plan to pull out of that $750 mo for your Capital expenses? I would suggest you put away $1000 mo for future repairs and maintenenace. Once you take over operation of the system, you will be required to keep it running (by the County Govt)

You're losing money already and you don't even have all of the true numbers. I'll bet she's lying to you so far......and you'll need to carry a pistol when you go meet with the water thieves, people don't like having their water shut off. Ask me how I know all this.....

Yeah the water thieves are my real concern. If I can’t solve that a definite hard stop I think.