Property flip - installation of Septic System required...

[Rex Celle]

I'm going to be walking through a potential property tomorrow morning, but what I do know upfront is that there is a need to install a new septic system which will run roughly between $30-$35,000. Has anyone had experience with the rehab that included having to install a septic system. The asking price of the is $69,000 And the ARV has a $200,000 potential give or take a few thousand. Is this an opportunity or a headache with risk.

[Jordan Deeney]

Hi @Rex Celle. My dad, who happens to be a septic designer in Washington State, was over at my house when I was looking at your post. So I asked him to give his 2 cents :). Hopefully this helps a little. 

"Regulations regarding on-site septic systems varies dramatically across the country, ranging from very strict to what I call “the wild west of septic”. I’ve designed thousands of systems over a period of 37 years in a State with rather strict regulations. Then within that tough State I design mostly in a particular county with even stricter rules and policies (I specialize in tough sites, rules, and regulations). You will definitely want to consult with whomever designs systems in that area along with conferring with the applicable regulatory agency. As with most things, you will want someone with experience in that area that “knows the ropes”. In some states the regulatory agency designs the system. In some, the contractor designs and installs with regulatory agency oversight. In others, professional engineers and/or State licensed designers are authorized for design, again with regulatory agency oversight.

Since the area in which I work is very strict, I will speak to those rules. This input should then be on the conservative side for you (hopefully). This advice will be very general as there is a complex array of system options available in conjunction with regulations and site specific constraints.

To protect or even increase the value of the property it is crucial that the replacement system meet current code (be “conforming”) and also provide a backup (reserve) replacement area. Otherwise future building permit options may be very limited, if not non-existent. This of course can have a dramatic impact on the value of the property. Additionally, you will want to consider if the market would dictate replacing the system with a higher capacity than the existing system. Most areas size systems based on the number of bedrooms. In the 80's most folks wanted one or two bedroom systems. Today, most systems are between 3 to 5 bedrooms. What is the market in the area you are looking at? What existing homes are selling? What number of bedrooms in new construction? When I have clients that just need a two bedroom system, I ask them if they would like to consider at least a three bedroom system in order to enhance future market value. If they do not wish to pay the additional cost for a larger system I still try to layout the system design in a way to be able to easily expand in the future.

Since soils take a very long time to develop, it is typically changes in soil classifications in the regulations that will be of concern. My State has updated the soils classifications four times since I began design work. Another concern would be whether of not man-made activities have impacted the soils in an adverse manner. Man-made events could include grading or bulldozing the site or driving heavy vehicles over the area (compacting the soils). Even without the soils classifications changing due to code changes, just having a different regulatory person than the one that originally looked at the soils can make a big difference on outcome. I am sure most of us have encountered situations were the regulations have not changed one iota, however, the “new” person in the regulatory agency interprets the rules differently.

I’ve droned on for a bit, however, this is just the tip of the iceberg in relation to all of the things I take into consideration when addressing septic system issues on a property. As with most things, the key is to get competent experienced advice. Hopefully the regs, rules, and soils in your area are on the easy side and your project proceeds smoothly."