ADU Project - Spend $30k On New Sewer Improvements Or Install Sewer Injection Pump?

Question

Advice Needed

TLDR - Spend an additional $30k now to upgrade the sewer system on-site while the contractor is already mobilized or go with a sewer injection pump which is likely a viable solution the will last for years with proper maintenance.  What would you recommend?

Background:

I have a property with a duplex (3bd/1ba & 2bd/1ba), detached house (4bd/1ba) and detached garage on it.  I recently pulled permits to convert the duplex's attached garages into one 2bd/2ba ADU, convert the detached garage into a small 1bd/1ba ADU, and add 1 bath and laundry closet to the 4bd/1ba house.  I'll be going from a 3-unit to a 5-unit property.

As the project is getting ready to break ground I need to decide on the level of sewer improvements I should do.  The existing system is pretty old cast iron except some ABS pipe towards the front of the property before going into the street. The detached garage is in the very back, at the lowest spot of the property.  It would be a challenge to get the 1/4" per foot fall necessary to tie into the existing main line on the property, although not completely ruled out.

Since it's low in the back the contractor bid the project to install an injector pump for the 1bd/1ba detached garage conversion to tie into the adjacent house's system.  This will eliminate the need to try to tie in at some unknown point to the main on-site.  His plumber came out and camera'ed the line and suggested the main line on the property may have issues.  He said he saw some 'bellies'.  As such my contractor gave me an estimate to install new ABS main line (~225 LF) for the property and connect all 5 units (3 existing and 2 ADUs) to it for approximately $30k.  He would tie in before the property line to avoid right of way permits and inspection.  He also suggested I bring out someone else to camera the system again to get a second neutral opinion.

I hired Cable, Pipe, & Leak Detection and the technician that came out today was very impressed with the on-site system.  He said he was able to run the full video cable 130 ft from a couple different cleanouts and didn't see any problems.  There was some minor root intrusion at the very front of the property and this tracks with my service plumber who last came out ~2 years ago and cleared some roots when the back house was experiencing back ups.  He said the system looked very good but being old cast iron he couldn't say if and when it'll fail.

We did have a blowout at the end of the line where it daylights around 10 years ago.  If I remember correctly it was an issue again at the front of the property (probably roots) that needed to be cleared.  There was crap everywhere in the back.  It hasn't happened since but I usually have to have my plumber out every couple years when the back house starts to report issues with their sinks and tub not draining well.

At this point I'm trying to decide if I should go ahead and redo the whole system while we're out there and consider it a capital improvement benefit that will last for as long as I'll own the property.  I've had it 20 years and I plan on keeping it.  I think I'm still a little traumatized from the blowout we had a decade ago.  It'll be nice to never have any problems with a new system.  At the same time it's currently functioning with no sign of substantial compromise to the cast iron pipe beside the age.  I had it camera'ed more than once (I did it this summer as well when I was doing due diligence that's how I knew the existing depths will make it hard for the detached garage ADU to tie in to the main line).  Both times I was told the line looks great.

One of the main drivers of this dilemma is the low 1bd/1ba garage conversion and $30k seems like a large cost for one element of a 350 sq ft conversion.  At the same time it benefits the whole property and not just the ADU.  If and once it's done I shouldn't have to worry about it ever again.  If I opt not to do it and just go with the pump there will be maintenance requirements for it and I'll have to rely on the tenants not doing anything that will compromise it.  Also, if in the future I ever do need to redo the main line it'll be more expensive (L&M increases), I will have already likely spent thousand installing and maintaining the pump, and I'll have more tenants impacted by a sewer construction project (currently a 3 unit but will be a 5 unit at that time.)

Help.  What would you do?

Dan H. · Answer

Thursday I completed a large rehab in mission beach on a small unit that was supposedly built in 1901 but I question if that is accurate (I have some belief it tax built in the 1920s, but records show 1901). Regardless it was old.

There was more ABS than cast iron sewer pipe (replaced over the years) and copper runs but the layout was changing so location of plumbing features had to move.  I decided to re-do all the plumbing seeing a significant amount has to be re-done regardless and the flooring was being pulled so there would never be easier access.

I made same decision on the electrical.   A lot of new/updated electrical was required, but we chose to have all new electrical because so much was necessary and there would never be easier access.

So I have new plumbing and new electrical, but have never been further over budget on any of our rehabs (not even close to this over budget on anything previous) and we have done quite a few rehabs (enough that I never expected to be this over budget).

we were only 10 days over schedule (we allocated just under 2 months) which is remarkable considering the various issues we encountered and the size of this rehab (we removed 4 walls (including a load baring), added 1 wall, added new bathroom, redid kitchen and existing bathroom layout, (new locations on shower, toilet, and vanity) removed a door, added 2 windows, new flooring throughout, and added an eyebrow porch. I wish our budget was as close to our estimate as our schedule.

As indicated we ran into multiple unexpected issues but also it was our first time rehabbing a unit that was old enough to have lathe and plaster (whether built in 1901 or 1920s).

Did we make a mistake re-doing the entire plumbing and electrical rather than just what was necessary? I am not sure, but if you have an opinion, it could provide insight on your decision. If you proceed with optional Repairs/upgrades you will likely bust budget (hopefully not as bad as we did), but should have years of trouble free service. is it worth it? As I look at our costs, I question if I should have done a tear down and constructed a 3 story, so I am not sure.

By the way my general rule is we do not do rehabs unless it returns double the cost and at least $50k. We were so over budget and some of the budget went to Items that add very little value (such as new plumbing and electrical) that I suspect we barely added more value than the cost. I certainly was not well compensated for my efforts. that may also play a role in your decision.

Good luck

K James · Answer

Thanks @Wesley I..  All of your input is helpful.  It's giving me a lot to think about.

Wesley I. · Answer

@K James

Sounds like the first plumber who inspected was looking for some extra work telling you that they saw problems. Your contractor was good to advise you to get a second opinion.

I will also  install a sewage ejection pump in our primary for a bathroom addition (well my plumber is), from my research, im going with a grinder pump. I am on septic not sewer.

I second the pump but have reserves for that old cast iron.

K James · Answer

I see.  Thanks Dan for your input and insight!

Dan H. · Answer

I allocated $60k for rehab and spent ~$100k.  In hind site I would have performed underwriting for a tear down and compared the two but suspect I would have gone with same decision because my underwriting on rehab was so off.   In the rehabs we have done, We never did full new plumbing or electrical.  My price in. Underwriting was off significantly.   Being tiny unit added costs.   For example we paid for designer that made multiple errors including one that we caught too late and pushed the schedule (but designer picked up the cost impact but not the schedule impact).  Also little unit had challenges having multiple contractors at same time.  Coped ceiling added some cost.  Remove of fireplace revealed mortar was compromised to extent it was closer to sand than mortar.  The haul away of plaster is much more expensive than drywall.  Basically we had no experience in rehabbing this old or small of a unit.  Also some of my contractors did not want to bid due to parking challenges of mission beach.

It came out fairly nice, but the cost was crazy and I personally did way more construction work than anticipated due to getting $crewed by 2 separate handymen.

I am happy it is complete and that I have the reserves to not have any significant impact from the overrun other than not liking it and making virtually zero for our efforts (my guess is value add is about the same as our expense - we traditionally add value 2x the costs).

Without doing thorough underwriting on a tear down, I do not know if I would make same decision.  I do know looking at how few original structures are left n the area that most have gone the tear down route.    I also know new plumbing and new electrical adds very little value (especially compared to the cost) but should provide worry free service for decades.  this parallels your decision.  Bomb proofing the sewer will not add much value, but should provide decades of reliable performance.  The upgraded sewer will likely place effort above plan and is unlikely to be the only unexpected item Discovered.

Good luck

K James · Answer

Thanks Chris! Magic to my ears.

I appreciate getting advice from experienced investors like you and Dan.

I welcome others opinions too. Keep them coming.  Thanks!

Chris Seveney · Answer

@K James

I would do the sewer ejector pump. Just make sure to maintain it.

K James · Answer

Thanks @Dan Heuschele for your detailed reply describing one of you own experiences. By the way, Mission Beach is the beach I grew up going to :-).  It sounds like you went through a lot with this last project. If you had it to do again, would you make the same choices?

Of course you're right about the budget.  I allotted $20k for contingencies (could be considered very lean) so this would blow that amount before we've even started.  I could rationalize it's for my long-term investment in the property and still sleep okay if it's the right thing to do.  But not knowing what else we may encounter once we get things opened up, I don't want to end up regretting it.  I think if I have to go over $20k for the rest of anything else that comes up is where I might start to question things.

Decisions, decisions.

ADU Project - Spend $30k On New Sewer Improvements Or Install Sewer Injection Pump?

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