Trying to close a deal should I back out and how if so
Hi, I am a new investor to real estate. I'm 22 and I'm looking in to doing a house hack for my first deal using an FHA loan with 3.5 down at a 6.5 rate. me and my fiancé had recently found a property in Baytown Texas on the east side of Houston. The main house is a three bed two bath, and it has a studio on the backside. The asking price was 258. We offered 245 with all closing cost covered and sellers accepted offer. we continued with our buying process getting our home inspection and everything was coming out great however when we went to get home insurance, we realize the rates were outrageous. Nothing like we were expecting in our underwriting. In our underwriting, we were expecting around 2000 to 3000 range and the number still worked. So far we have tried multiple different home insurances and more than half are saying, our property is uninsurable and only have gotten two quotes which was 8000 and 6000 a year not including the flood insurance we would have to get. And now the numbers just don't work on this deal as a house hack as even when I move out in a year and rent the other property I still don't think it's going to hit positive cash flow and insurance only goes up so who's to say in 2 to 3 years if I can even afford that. My monthly income after taxes is roughly 6400 a month and realistically with what the mortgage and insurance will be and all other expenses I just don't think this deal works out anymore, but I'm past my option fee. What are my next steps is my earnest money going to be completely gone. I feel stupid for getting this far into the process to just have to back out now but I just don't know what to do and I don't know if I'm worrying myself. All advice is great like I said I'm new to this Please help.
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I am not familiar with your contract but if you want to back out you will most likely lose your EMD and you are opening yourself up to the seller pursuing you/lawsuit (very rare). In my area insurance is mentioned during the inspections/due diligence part. Once you are past that window you waive that. If the insurance is insanely high your lender might be able to provide a loan denial which would help but you need to speak to your agent and go from there. Be careful taking advice on a forum with a sticky situation.