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I need contaminated soil advice.

Old 01-16-2007, 12:07 AM
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Default I need contaminated soil advice.

The Misses and I are looking at a rural property which has an approx. 3k sq. ft house (two houses joined together) plus includes an old gas station up front (store and two bay garage).......the property is being auctioned off this weekend. The property is being auctioned off as, “AS IS”. The property has contaminated soil issues from the old gas tanks in the ground and probably some spilt oil/ anti freeze issues. No bank will write a mortgage for this property because of the soil condition reports!!!

10k is needed to enter into the bidding and balance is owing in 20 days after closing of the auction. Failure to complete the transaction in 20 days one forfeits their 10k. If I do enter into this auction I’m thinking my highest bid would be somewhere between 30 & 40k. A 100k into the property and get out somewhere over 300k a year, year and a half later.

My question is:
- has anyone dealt with these types of issues before or have some insight to offer?
- has anyone had to deal with gas station related contaminated soil issues?
- has anyone been exposed to getting a mortgage on a property that was once deemed contaminated soil?

What am I looking at here guys? I could use all the help I can get on this one!

Oh, I just about forgot to mention, since the house is comprised of two homes joined together, only one of the two houses has a basement. Well word has it the basement was used as a pot growing operation......so there is mold issues in the house that will have to be dealt with as well....you can see the green mold on the wood panel walls.
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Old 01-16-2007, 12:27 AM
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Default Re: I need contaminated soil advice.

Garett, Iwas thinking of another post .

The property you are looking at is at auction for a reason .The buyer will assume all responsibilities [ read a SH!T load of $$$ ].

The city I work for now is scared to death of any property in town that has had a old gas station on it. Here in the US/Texas the new owner is ultimately responsible.


I would RUN AWAY.
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Old 01-16-2007, 12:51 AM
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Default Re: I need contaminated soil advice.

Anything contaminated cost a fortune to dispose of and often has to be transported a long way. Not sure, but I believe some sort of monitoring systems may be required along with a independant monitoring service when fuel tanks are involved. I'd be scared to death of that one.
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Old 01-16-2007, 12:56 AM
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Default Re: I need contaminated soil advice.

Hmmmmmmmm, thanks Les. That gives me an awful lot to think about and reference in a very short time.
I know I want a fixeruper but I don't want to go bust in attempting to make some money.
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Old 01-16-2007, 01:01 AM
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Default Re: I need contaminated soil advice.

dont even touch it unless you are paying cash. at least here if paid by cash , no soil test needed whoever you use for a mortage will def. have soil tested and you dont even want to hear those prices to remove soil

think of it as lead removal on a house
those contractors rip you off BIG
now multiply that by the machinery and overhead in construction and cost for disposing trust me i am in construction and have the equipment and i wouldnt touch it
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Old 01-16-2007, 01:20 AM
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Default Re: I need contaminated soil advice.

For some reason I feel like the Road Runner dangling from the edge of a cliff and hearing the plinking sound as each finger looses it's grip.
As I said, I've got a lot of running around to do in a very short order.
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Old 01-16-2007, 01:29 AM
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Default Re: I need contaminated soil advice.

now that i think of it , heres an example. i could throw a stone at property from here at a 3 corner intersection.it was a gas station . prime location heavily commercial area .if you dont beleive i will take a pic i think the gas price on the signs says $ 1.15 per gallon so you do the math
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Old 01-16-2007, 01:29 AM
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Default Re: I need contaminated soil advice.

2005FishermanWinner,

I've already found out that I can buy the place and live in it as it is, but as long as the soil condition are what they are I'll never be able to have a mortgage on the property, nor will anyone else. I'd need a mortgage to do the renovations because I don't have that kind of money. My sole intension given the location is to flip the property and make some money.
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Old 01-16-2007, 01:32 AM
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Default Re: I need contaminated soil advice.

your gonna fight a losing battle brother trying to make $$$ my opinion at least in these parts you would
as far as living there and paying cash by all means its a no brainer. i lost a deal that my girls father bought for 100k same deal contaminated soil , he rents out the building cut it up into garages for rent he made that back in 2 years.... thats why i said if you got the cash its a deal you can do lots of things with the land without disturbing the soil

forgot to mention the building on the property was existing and is now worth 800k
so of course im not a happy camper
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Old 01-16-2007, 02:00 AM
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Default Re: I need contaminated soil advice.

Buying it and renting it out Was something the Misses and I have discussed. Looking at the house I could easily and quick cost effectively convert the house back into two serperate homes, plus then I would have a garage that I could rent out. We haven't ruled that one out yet.

But knowing me the way I do, I'd want to deal with that soil issue if I owned that property!
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Old 01-16-2007, 02:04 AM
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Default Re: I need contaminated soil advice.

2005FishermanWinner - 1/16/2007 2:32 AM
you can do lots of things with the land without disturbing the soil

forgot to mention the building on the property was existing and is now worth 800k
so of course im not a happy camper
So does the father still owns the property? I take it the soil still has it's issues? So what's the overall plan, just sit on the property, rent off the units, make the money and don't worry about the soil......let the property keep generating money?
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Old 01-16-2007, 05:43 AM
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Default Re: I need contaminated soil advice.

Garrett, I demo'd an old gas station about 10 years ago. We crushed the building and hauled it off, dug out tanks and took them to shop and sold them, and then we had to truck off about 250 tandum loads of "contaminated dirt" to a hazardous waste landfill. The hazardous waste landfill charged about 30 per ton to dump the dirt (10 years ago, probably 70 now). I think the bid was around a quarter mil. that I was awarded. So this could give you an idea why it's being auctioned off.
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Old 01-16-2007, 07:11 AM
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Default Re: I need contaminated soil advice.

Garett, sometimes when doing acquisitions for my various clients I run into the contamination issues concerning old UST's. Once these are identified and recorded they never go away. Even if you bought the property and had the UST's and the contaminated soils removed the record will forever remain with that parcel of land, and would need to be disclosed if the ownership ever changes.

Usually it's the Phase I environmental survey that will uncover a UST situation and unless it has already been remediated it will require a Phase II survey. Do you know if there was a Phase I ever done on the parcel???? If not then you're off to a rocky start already. Environmental's are VERY expensive and timely to get done but it would be the only way to put your lender's mind at ease once the removal is complete, and even then they MAY rate your mortgage accordingly.

I know you didn't ask for my opinion on the purchase but since it's free (today only) I'll give it to you..... Unless you have some deep pockets and some patience I would seek another parcel without all the baggage that this one seems to have.......
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Old 01-16-2007, 07:13 AM
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Default Re: I need contaminated soil advice.

BUGBUSTER - 1/16/2007 6:43 AM
we had to truck off about 250 tandum loads of "contaminated dirt" to a hazardous waste landfill. The hazardous waste landfill charged about 30 per ton to dump the dirt (10 years ago, probably 70 now).
That was just for the landfill fees correct, plus the excavation fees, trucking fees, testing of the site soil fees and clean fill? Do you recall how long it took to have the soil tested and costs after the contaminated soil was removed? Do you recall if it was only in the tank(s) area that contaminated soil needed to be dealt with or did you basically have to remove dirt from around the whole building as well?
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Old 01-16-2007, 07:23 AM
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Bailey Boat - 1/16/2007 8:11 AM

Usually it's the Phase I environmental survey that will uncover a UST situation and unless it has already been remediated it will require a Phase II survey. Do you know if there was a Phase I ever done on the parcel???? If not then you're off to a rocky start already. Environmental's are VERY expensive and timely to get done but it would be the only way to put your lender's mind at ease once the removal is complete, and even then they MAY rate your mortgage accordingly.
I do value your opinion Mumbles, no worries there.
Sunday that just past I was talking with the auctioneer that will be doing the auctioning, he was saying some sort of environmental assessment was done on the grounds, hence why the property is not entitled for a mortgage. Afterwards I got talking with a few of the neighbors and they were saying that the assessment took about 3 months to complete. Nobody was able to tell me who did the assessment or what type of assessment was done.
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Old 01-16-2007, 07:42 AM
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Default RE: I need contaminated soil advice.

I am in the UST clean up business and have worked on over a thousand of these sites, but no where near the Great Lakes. The cost of these things is very site specific, it can run just 10 to 20k to pull the old tanks and excavate a little soil or in rare cases people have spent millions on old gas station sites. No way to tell where in that range you are.

I would call the state environmental regulators, UST sites are handled by the state and most states have UST programs. They will not know or estimate how much it will cost but they will know what has been done and might be able to tell you what is required. In most states if it is a more recent tank some kind of trust fund exists and that might pay for some or all of the clean up. If it is very old that is less likely.

On the positive side lots of contaminated properties are bought and sold all the time, and you can get a loan but first you need to either get it cleaned up, or get a letter from the state saying that it is cleaned up, won’t require clean up, or that someone else is cleaning it up.

If you do your homework you might get a real bargain here; on the other hand this could drive you to bankruptcy if you are not careful. Remember once you buy it you are fully responsible for the clean up no matter what the cost.

Good luck.
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Old 01-16-2007, 07:55 AM
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Default Re: I need contaminated soil advice.

Alligatorob,

Talking with the neighbors, they feel the tanks were removed years ago! So as far as I know, all I'm dealing with is soil, but I don't know this as fact.

If the first assessment did in fact take 3 months to complete at X unknown amount of money, does a follow up assessment take as long or as much money? Would the second assessment be done while the hole is still open?
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Old 01-16-2007, 08:02 AM
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Default Re: I need contaminated soil advice.

Garett - 1/16/2007 7:23 AM

Bailey Boat - 1/16/2007 8:11 AM

Usually it's the Phase I environmental survey that will uncover a UST situation and unless it has already been remediated it will require a Phase II survey. Do you know if there was a Phase I ever done on the parcel???? If not then you're off to a rocky start already. Environmental's are VERY expensive and timely to get done but it would be the only way to put your lender's mind at ease once the removal is complete, and even then they MAY rate your mortgage accordingly.
I do value your opinion Mumbles, no worries there.
Sunday that just past I was talking with the auctioneer that will be doing the auctioning, he was saying some sort of environmental assessment was done on the grounds, hence why the property is not entitled for a mortgage. Afterwards I got talking with a few of the neighbors and they were saying that the assessment took about 3 months to complete. Nobody was able to tell me who did the assessment or what type of assessment was done.
Based on that, it sounds like "someone" is trying to keep the bidders from seeing the reports. At auction there is no disclosure requirement, (hence the "as is, where is" disclaimer) at a private sale disclosure of the report would be required.......
I would almost be willing to bet that "leaching" has occurred and you MAY have adjacent property owners that have contaminated soils because of the UST site........ Put on your running shoes Mr. Gump..........
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Old 01-16-2007, 08:15 AM
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Default Re: I need contaminated soil advice.

Garett, all the EPD stuff was done before I even got there. There was an EPD guy there during the process doing some tests. I guess we got it all because I got paid. To me I think its all a big croc. When I was a kid I lived on a dirt road and the county used to bring all there waste oil and oil from local garages and spray the road to keep down the dust. The landfill fees on the demo were 30 per ton just to dump. No excavation in that price just dump fees. I remember that we ran a couple of trucks during the day while the EPD was there and alot of trucks at night and took that dirt and built a parking lot around my shop. Now I think there is no excavating of the dirt, they use new technology where they pump air through the soil and somehow that clears it up. That's what I've heard anyway. We haven't done any environmental waste clean up in a long time. If the property is in a prime location and auctioned very cheap and I had a little money to invest, I'd go for it. In the future, someone will come along that doesn't care what it costs to purchase or clean up. Location, location, location. Do you have the first assessment?
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Old 01-16-2007, 08:18 AM
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Bailey Boat - 1/16/2007 9:02 AM

I would almost be willing to bet that "leaching" has occurred and you MAY have adjacent property owners that have contaminated soils because of the UST site........ Put on your running shoes Mr. Gump..........
To the best of your knowledge, "if" leaching has occurred, say over to the neighbor's property or even to under the street(s) (the property is located on a corner of a T intersection) would I have to clean up these areas as well?
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