Soil Contamination......Always run away????

[Jason Krick]

I came across an REO with disclosed soil contamination. The underground oil tank was removed, and it leaked into the soil. That's all I know at this point. I don't know the extent. The listing agent made it a point to say that the house and surrounding area is on municipal water and sewer, so it "shouldn't be much of an issue, but it must be disclosed."

I have searched through threads on this site, and the general consensus is to run away.   Here are my questions:

Is it ever worthwhile to buy a property such as this to flip? Would the price ever be attractive enough to give it a go? Does the municipal water/sewer make a difference in remediation standards? Finally, I know I would have to disclose it at the time of resale, showing the remediation, and to expect a discount off typical ARV. How much would this issue discount the property, if properly remediated, and everything else rehabbed? 10, 20, 30%?

The house is currently listed, IMO, about $100K below ARV. The inside of the house looks great. I would assume I would have to hire a qualified company to dig up the contamination and replace with clean fill. I would also decide on whether to get a new oil tank (it has radiators), or retrofit a forced air system for AC/heat. Everything else looks to be modern and up to date, with minimal work needed. Depending on the costs, could this be viable? The area is extremely desirable in the most desirable school district.