OfflineI found a property in a good part of the Phoenix az area. I ran comps for homes that closed within 1 mile that had the same beds/baths, +/- 20% of sq ft, same number of levels, and closed between now and may 1st of this year. Comps came out suprisingly high and the asking price is pretty low... the property needs some work but the thing that I'm concerned with is the property is not connected to the city sewer system. It has it's own septic system and I'm wondering if that will change the value of the home vs the comps I ran.
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I am not familiar with Arizona septic systems but I can say if the SYSTEM IS working and code up to date with no problems to be fixed then the buyer will be saving the yrly fee for the sewer charges. U MUST check into this to see if working properly because u want to know if u have to replace if u have ENOUGH lot space to comply with codes. This may or may not be a problem. Do your due diligence n u won't have to be afraid. Ask questions of owner, contractors, neighbors, code enforcement, look up the prior owners on netronline.com and contact them to ask questions !! Do what other investors r NOT willing to do to get GREAT DEALS !!! Good luck !!'
Jay
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Hey Zachary,
if the city sewer is running on the street the house is on, I'll find out what it would cost to have the house hooked to it and add that amount to the repair cost.
Thomas
Good stuff guys thanks.
It is possible that the septic system is having an effect on the value of the home but I would be surprised if an appraiser would give more than a 2.5 - 5% downward price adjustment. I would make sure that the city is not requiring new buyers to pay for connection. This could cost thousands and that would bring down the value of the home. (List price + Connection Costs = Market Value)
Another consideration is the condition and age. This can have a very measurable affect on the property. Additionally, if it is in a larger city, 1 mile may make a lot of difference if you move into another neighborhood.
Zach , interested to hear the results of your research !!
Any news or research that u proceeded with ? Was system connected or by itself. This could help others
It's always interesting to see and hear about how these obstacles are overcome.
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It was listed as connected, I'm not sure what the difference is between being "connected" and "alone" or by itself. I think there was more of an issue with my method of finding comps which made them seem pretty high. The property did not have a garage and I didn't take that into consideration before looking up the comparables. Newbie mistake on my part.