My first park deal died at day 52, and most of the $31k was avoidable

$31k to learn to make one phone call first is expensive but I'd rather read this than another post about how great lot rent is. Still working out which strategy fits me and this thread just moved parks down the list a bit.

I've got a park on my list right now with a private lift station and I did not know that transfer could trigger a permit review. Adding a line to my checklist tonight.

@lantern did the seller ever sell it? Because if the next buyer just closed and nothing happened, that changes how I'd read this.

The sequencing point in this post is the one worth taking. Diligence spend on a park should be ordered by how likely each item is to end the deal, not by convention. Environmental and survey are standard, they are also rarely fatal on a park that has been residential for fifty years. Private utility infrastructure operating under a municipal permit is frequently fatal, and it costs a phone call to check.

On the mechanism, since @bramble asked. A private lift station, package treatment plant, or community water system is typically permitted to an operator, and many jurisdictions treat change of ownership as an event that reopens the permit file. What happens then is entirely a matter of local and state practice. Some cities issue the new permit on the existing conditions. Some require the system to be brought to current standards, which on a sixty-year-old station can mean a new wet well, new pumps, new controls, and telemetry. Get the answer from that utility department in writing, and have a civil engineer who works in that jurisdiction read the response.

What the answer here depends on is whether the upgrade cost is knowable at diligence. @lantern was quoted a $200k to $400k range with no commitment, on a $1.6M asset. That range is 12 to 25 percent of purchase price. No reasonable underwriting survives a variance that wide on a single line item, so walking was consistent with the numbers rather than a failure of nerve.

The cheaper version of this diligence is to ask, in week one, for every permit the park holds and the date each was last renewed. A missing renewal is the signal.

A few deals in and this is the ceiling I keep hitting too, though for me it's usually zoning rather than utilities. The pattern is identical. Something in a municipal file that costs nothing to check and everything to miss.

What I'd add to @lantern's checklist: also ask whether the park is a legal conforming use or a legacy nonconforming one. In a lot of towns parks were permitted decades ago under ordinances that no longer allow them, so the park exists as a grandfathered use. That's usually fine until you want to add lots, or a fire takes out four homes and you find out you can't replace them. How grandfathered use works is state and municipality specific and worth a land use attorney's hour.

I'm brand new so mostly reading, but the thing that stuck with me is that four trips cost $3,900. I hadn't thought about travel as a diligence line at all.

The structural fix for this is in the contract rather than the checklist. You can write a diligence period with staged deposits, so a small amount goes hard early and the larger amount only after you clear specified conditions, and you can name the utility permit review as one of those conditions explicitly. Whether a given seller accepts that is a negotiation, and enforceability of contingency language varies by state, so an attorney drafts it.

@lantern the $7,500 legal spend suggests you had counsel involved. Did the contract have any out tied to permit status, or was it a general feasibility contingency? Because a general contingency protects your deposit and does nothing about the $23k of third party reports you already ordered. Sequencing is what protects that money, which is exactly what you said.