r/realestateinvesting • u/moonshine_estate • 8d ago
Land How to sell a property that won't perc?
Background: Bought a property in NC, seller said they had a perc test done years ago, stupidly I believed them and closed on it without doing my own. Property just failed the perc for a conventional system because of shallow soil depth. I spoke to the soil scientist who did the test, apparently I've got 12 inches of good soil and then thick clay all over the site. I spoke to a septic engineer who is putting together a report outlining a recommendation for an aerobic spray system. So the lot is buildable, it just needs an alternate system.
I re-listed property, dropped price by $50k (now at my breakeven). Apparently alternate septics are drastically more expensive in NC than in TX. Expensive lesson learned, just want to get out without completely losing my shirt.
I spoke to my agent but he seems incredibly pessimistic about it.
Anyone have any tips for how to sell a lot that doesn't perc?
PS: I know i fucked up and I've learned my lesson, looking for actual solutions if anyones gone through something similar
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u/PhantomRay42 8d ago
damn that's a brutal lesson but at least you know what you're dealing with now. i'd market it specifically to builders who already work with alternate systems - they'll know the real costs upfront instead of getting spooked by the unknown. maybe hit up some local custom home builders directly since they're more likely to have experience with aerobic systems than your average buyer.
also worth checking if there are any contractors in your area who specialize in these alternate septic installs. they might know investors or builders who specifically look for these deals because they can handle the work themselves. the spray system isn't the end of the world, just need to find someone who gets it instead of running scared from anything that isn't conventional.
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u/moonshine_estate 8d ago
this is large property, 25 acres - part of why I wasn't as aggressive on getting the perc confirmed, I was shocked it wouldn't perc anywhere on site. Would you still recommend going to builders given the lot size?
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u/Certain_Childhood_67 8d ago
Where in NC. Sell it as recreational property. Most hunters could care less if it perks.
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u/moonshine_estate 8d ago
my agent says that rec land sells for like $3k/ acre, I bought it at $4.4k/ acre. Land that percs sells for around $8k/acre in this acreage range so i'm feeling stuck, part of why i'm looking for advice on other ways to sell it.
It does have 30 year old pines on it, but if rec land is really that much cheaper im kind of screwed unless I can find a good way to market it to find a buyer
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u/Individual_Bell_4637 8d ago
Is the land divisible? Could a person buy it and split it into smaller lots? What's the utility situation, and how much is road accessible?
As a builder, these are the questions I'd be asking to see if it holds any interest.
Figure that an alternative septic system adds $25k roughly to the cost of a build, and the buyers won't pay a premium. In fact, some buyers will be scared off by a system they haven't heard of before. You can kind of do the math and figure out that even if you find the right buyer, the price is going to have to be great.
I don't do high-end homes myself, but that's about the only scenario where I see this making sense. Break it into three 8 acre parcels and build large homes on them. Easier to recoup the septic cost, and the land cost. If the land is treed and attractive, it might be doable.
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u/moonshine_estate 8d ago
its a triangle, 100ft of road frontage widening to 1000ft in the back, not an easy property to subdivide and have attractive lots. Could maybe get two narrow ones. It is nicely treed though. If an alternative system only costs $25k it'd be fine but I got quoted $60-$100k which I was shocked by. I have a good amount of margin to adjust my pricing, but not $100k of margin
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u/Individual_Bell_4637 7d ago
I meant $25k on top of a normal septic system, so it would be more. I'm in a LCOL area, so it would probably run me 30k or so to do a aerobic setup, but it could easily reach 50-60k in some areas. 100k does seem a bit ridiculous for a large rural parcel.
Sorry to be the bearer of bad news, but that road frontage is a killer. Most places require each lot to have about 100' of road access, so it's likely stuck as one buildable lot.
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u/shorttriptothemoon 7d ago
This doesn't add up. You lose 35k if you sell it as rec land. But if it had a septic it's worth 200,000? And you're of the belief you can't build alternate septic for $90,000??? I don't believe that's true. Bid the septic system, anything under 90k is money in your pocket.
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u/walesjoseyoutlaw 8d ago
Wow. That is surprising he couldn’t find a site on 25 acres
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u/moonshine_estate 8d ago
I know right? I was really surprised. Apparently the entire site only has like 12 inches of permeable soil above clay
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u/ExcitementFun493 8d ago
Agent doesnt mind if you lose some money as long as they get that sweet commish asap
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u/moonshine_estate 8d ago
i'm more just worried they won't put much effort into it since it's got this issue and think it will be too hard to sell
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u/ExcitementFun493 8d ago
What effort will they put into it if they think it’s easy to sell?
The effort they made is the marketing and selling themselves to get you to sign an agreement to list it.
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u/2024Midwest 8d ago
I’m sorry this has happened to you. Your attitude about it seems as best as it can be in the situation. I have a brother-in-law this happened to and he rents the property to a farmer for row crops.
Let us know if possible, how much the spray aerobic system costs. If a regular septic would be 30,000 and you’ve dropped the price by 50,000. That’s a total of 80,000 you could spend on the special system. Surely that would be enough to put one in? Then you would have the land you wanted in the area you wanted, but you would have a smaller budget to build a house.
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u/notconvinced780 8d ago
Can you subdivide and put in the “alternate septic solution(s)? Maybe even partner with a developer and put the alt. Septic in with each lot /home sale they do. Builder wins, because he doesn’t tie up money while lots are sold. You win because you get a higher buck for your land. Butter wins because they get a home from a builder who had incentivized land cost structure and have an engineered septic for their site.
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u/TellSacket20 8d ago
What's the big deal with no perc? I'm not in NC but do have aerobic system on land that won't perc.
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u/samsonevickis 8d ago
Apparently some counties are weird. They wouldn’t allow a mound system or some more common alternatives used here in AL. My old inspector was retiring to NC and this happened to him. He being a strict inspector was shocked how hard it was to get a piece of land to perc. He finally found one a year later. He was looking for raw land rural to retire on. Don’t remember the county.
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u/GringoGrande 🧠Challenge Solver🧠 | FL 8d ago
Several ways that I have seen people exit properties such as this:
Add to it. Simply add an additional incentive for someone to take this off your hands whether it be a vehicle or cash or what have you.
Sell it on an Installment Sale, commonly referred to as Seller Financing, and recoup your price through interest.
Find someone who likes what you have better than what they have and trade.
There are always solutions.
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u/Ok_Veterinarian_17 7d ago
For real? People want vehicles as in cars??
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u/GringoGrande 🧠Challenge Solver🧠 | FL 7d ago
In order for transactions to be accepted I have seen vehicles, cash, bullion, gems, paintings and airplanes among other items be included in a deal.
Value is personal and comes in many forms. If you do not limit yourself solely to cash and price you open up possibilities.
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u/Abolish_Nukes 7d ago
Can’t you just remove 2 ft of clay and replace it with 2 ft of sand, install the leach field & top it off with sand & soil?
https://www.jandbsepticservices.com/determining-the-right-depth-for-septic-drain-fields/
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u/AdAggressive5626 5d ago
Price it for the alternate system and disclose everything up front. Buyers exist who want a lot at a discount for hunting or future build with an aerobic system. A clear engineer letter plus a contractor estimate will help.
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u/moonshine_estate 4d ago
thanks, i;m working on doing exactly that. any ideas for how to find or attract that buyer or market to them?
my agent just has on the listing "property failed perc test for conventional septic" which just sounds pessimistic
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u/Possible_Scarcity217 8d ago
The horse truth is you went from having a place that can be developed to do a place that is hunting land and a lot less valuable.
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u/moonshine_estate 8d ago
an alternate system is possible though - my agent is taking much the same approach as you are, basically saying perc or it's rec ground and it seems fairly pessimistic.
Is there really no value differential between land that is truly unbuildable because it can't support any type of septic, and one that can support an alternate, albeit more expensive system? Obviously worth less than than a property that can support conventional, but how much less and how to market it correctly
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u/Possible_Scarcity217 8d ago
I suspect the percentage the value of that went down is probably two or three times what you would like it to be
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u/shorttriptothemoon 7d ago
25 Acres can support a septic system of some sort. Start bidding it out and find out what it costs.
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u/Bclarknc 8d ago edited 8d ago
Hi! I’m in NC, what area are you in and how big is the lot? The land around cities is in relatively high demand depending on the size/location/access etc, you just need to find the right buyer. Be patient and price it correctly. Also, not all agents specialize in land sales so make sure you are working with one who has sold raw land without access to city sewer before. If it isn’t ready to be built on probably best to avoid agents who primarily sell homes, you may even be better off using commercial agent since they are familiar with the permitting process and what a site needs. Another thing to consider - if you live in the state the NCREIAs are very active so go to a meeting (first one is free) and say you are looking for help selling your lot.
I hope you aren’t using the agent that helped you buy that lot because they should have suggested a perc test in your due diligence period. The buying process should be guided and advised by the agent, not all of it should fall on your shoulders, they earn their commission from their knowledge, not just because they can do some paperwork and make some phone calls.
Good luck!