Replacing Utility Systems: A Primer

One of the key requirements of owning mobile home parks is to provide working utilities. But in many older mom and pop parks there may be problems with old lines that have been denied proper maintenance for decades. Here are some things to think about when it comes to the issue of replacing a utility system.

Are you sure you really need to do it?

It’s a giant commitment to replace a complete utility system and not one that should be taken lightly. Before you would even consider such an option you should get at least three opinions on replacing vs. repairing the existing setup. You should also get firm written bids that show the total cost in parts and labor from reputable contractors with insurance (not Jerry in lot #13). The sheer cost may quickly persuade you to simply work with what you have. However, if you have water lines that have millions of holes in it through corrosion – or sewer line made of orangeburg -- you may have no choice.

Have you explored other new options?

There have been some technological advancements in recent years regarding improving your lines or replacing them using new methods. The two most prominent are the coating of the inside of your metal water lines with a layer of PVC so you don’t have to do any actual digging, and the other is called “pipe bursting” in which your old clay tile lines are pulverized while pulling through new PVC pipe, using hydraulics. Some of these options are significantly less expensive than traditional methods and are worth getting a bid.

Line locating

Most mobile home parks are like spaghetti bowls of pipes and wires. You definitely need to do line locates before digging in a mobile home park. The good news is that this service is free if you call your state’s helpline (such as DIG-TEST). Since a fiber-optic cable cut can cost you $1 million in damages and loss of service, you’re crazy today if you don’t get all the lines located.

Engineering

You don’t simply replace a utility system by sketching it on the back of a napkin – it requires substantial engineering and approvals from municipal authorities (all the way up to the state in some cases). If you are replacing the sewer system and it does not have the exact correct amount of grade then the sewage will not drain (which is not a happy ending).

Careful selection of contractor

These type of projects are extremely high dollar, and you have to be extremely tough on your selection of contractors. You need references, insurance policies, and even discussions with the authorities to make sure they have been happy historically with their work (they may also need certain licenses and permits). The selection of the wrong contractor can literally destroy your property, so no glossing over this step.

Be ready to hit other lines as you go

One reality of replacing utility lines is that you are going to hit things as you go. There are lines in the wrong place, lines long abandoned, lines missed in the locating process. Some of these will cause ruptures in other utilities, and some will just scare you. But you have to acknowledge that things will happen no matter how proactive you are. So just accept the fact and don’t get upset when you get a call that you cut one residents cable TV and another’s water line. It’s just going to happen and you’ll fix it as you go.

Notify residents and keep them updated

In these type of projects it’s essential to have complete transparency with the residents. There’s no way they’re not going to notice the torn-up streets and piles of dirt. Let them know exactly what you’re doing, why you’re doing it, and when it will be completed. Also give them a contact number for the contractor in case of emergency, and safety tips. Make sure that all excavated areas are clearly marked with safety tape and that all risks are fully mitigated. Always give residents prior notice of any utility being turned off – give them the exact same respect you would want.

Conclusion

Replacing utility lines is a rarity in the mobile home park industry with most owners electing to simply patch the existing ones and avoid the cost and process. But if you have to replace your lines, this primer will at least give you some things to think and ask about.

Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.