The park leaks 5,000 gallons a lot per month and the seller wants to carry

I'd want the actual monthly bills for 24 months, not the average. If the usage is flat and high forever, that's system loss. If it stepped up in some month in 2021 and never came back down, that's a break, and you know roughly when it happened.

Follow @cairn's night reading, then ask yourself what you'd do if the answer is 60 lots of failing galvanized service lines. Replacing individual services in a park that size, at whatever your local trenching cost is, is a project you fund over years out of cash flow, not in year one out of a $5k budget. So the question becomes whether the seller will price it in or hold money back.

I'd rather ask for a $150k price reduction than a lower rate. A rate concession helps you for three years. A price concession helps you forever, and it lowers the balloon you have to refinance.

On submetering: it doesn't fix a leak, it tells you where the water is going. If you submeter every lot and the sum of the submeters is 4,500 gallons a lot while the master meter says 9,800, you've proved the loss is in your mains and not in the homes. That alone is worth something even if you never bill from them.

Billing residents for water is a separate question and whether you can, how you must disclose it, and whether it has to come with a lot rent adjustment varies by state and sometimes by city ordinance. I'd ask a local attorney before assuming $310 plus water is a thing you can do next month.

I'll disagree with @anchor a little. A price cut is nice, but if the mains are shot, you're buying a capital project with a three-year fuse on it, and the price cut doesn't put a plumber on site. I sold a park last year where I ate $190k of underground work I didn't underwrite, and the reason it hurt wasn't the amount. It was that it landed in year two, before rents had moved, so I paid for it out of the equity instead of the cash flow.

If you want this deal, structure it so the seller funds the fix. Holdback in escrow, released as work is documented. He's owned it since 1998 at whatever his basis is. He can afford to be part of the solution, and if he refuses, you've learned what he thinks the water bill actually means.

How wide is the road right of way and is any of the main under asphalt? Trenching under pavement and then repaving is a completely different number than trenching in grass, and it changes the answer to whether this is fundable out of cash flow.

Genuine question from the cheap seats: 9,800 gallons a lot a month with no submeters. Is some of that just people watering, filling pools, running a hose all summer because it's free? I'd expect free water to get used. Seems like part of the gap could be behavior rather than pipe, and the night reading @cairn described is the way to separate the two.

@plumb that's the reason the 3am reading matters more than the monthly average. Behavior sleeps. Pipes don't.

@rigging the thing I'd add is that 21 days is short for coordinating a leak survey and a lawyer reading the lot leases. Ask for 15 more days now, while he still wants the deal, rather than in week three when you need it.