Sewer easement on first multifamily

[Ed Rataj]

i am looking at a 4 family building that is in a B area. Preliminary numbers look good. Specifically:

Asking 130k

Market rents are 500-600 per month

Currently 100 percent rented at 380 due to extensive deferred maintenance.

Arv should be $225k

I am going to see the property showing tomorrow. Here is the question...

There is a sewer easement under the house itself. Apparently the sewer company could access the sewer through the basement if needed. Is this a big deal?

I am thinking that there is a 90 percent chance that it is never accessed and only a 1percent chance that it is accessed and becomes a problem.

Aside from the basics of the deal, what should be considered with the easement? Resale issues? Should it be avoided? I appreciate any BP expertise that can be shared!

Ed

[Chris Winterhalter]

@Ed Rataj

Are you looking in St. Louis City? Sewer easements are not uncommon as it can be the only way to hook up to main sewer lines in certain areas.

Also you need to understand the sewer programs in St. Louis. Depending on property type and municipality you will pay into a sewer program to MSD for replacement. Commercial properties and 5+ multi-families are not covered. Also I believe the City cancelled the program for everything 2+ units. If you are in the County you should be covered. Double check either way.

Also make sure to get the sewer inspected (camera).

http://www.stlouisco.com/PropertyandRoads/NeighborhoodServices/WaterServiceLineRepair