Flipper/Rehabber · Houston, TX · Member since 2013 · 74 posts · 20 votes
Received an email this morning with homes in a good area here in Houston but issue is all flooded during Harvey. These are off market and Seller would like to sell them all and is highly motivated. Wants to meet to today so I can take a look. I admittedly have done no studying into buying flood homes so more than likely I will wholesale buy depending on responses, I will be learning more about flood homes.
In the area I have seen 4 flips done and Realtor says people have been buying in the same subdivision that flooded. Actual homeowners which is a good sign.
Just wanting feedback on whether or not to pursue and if so, some suggestions on what to look for. Also what calculations to make for making an offer.
Definitely will find me a mentor if flood homes are a good idea. I have been passing up sp many calls on flood homes but this morning something is telling me to get feedback because may be opportunities in flood homes afterall.
Thanks in advance.
Note: My GC says he will gladly tag along today as well.
I personally would not hesitate to buy a remodeled flood home if it was in an area that didn't typically flood (Harvey was not a typical flood event). That being said, I'd expect a significant discount compared to pre-flood market.
I've spent most of the last two years rebuilding flooded houses (tax day flood and Harvey), and I can tell you some of them have sold at 40% less than their pre-flood values.
@Andrew Taylor when time permits, could you please forward me your contact information. With you being a contractor, I need to keep you in my pocket for any future potential projects or needs. Thanks!
@Andrew Taylor, I agree that the property right off the bat should come at a lower cost and agree if the area is still considered, low to moderate risk (flood zone X) then it might
@Sarah S. good to learn all you can about the property before you buy it, I would suggest you get all the history about the flood? How water entered the home, how much damage? how high the water came? was this the only time the property has flooded? is the home in a high-risk flood zone? Highrisk flood zones will require the purchase of flood insurance to get a loan.
If the property has had more then one flood or a loss that was over $50K - $100K paid in the claim that the government might put it on the Severe Repetitive Loss list which is not a good thing.
I would also see if there are new flood building codes that you need to be aware of. Sometimes if you improve a building more then 50% this will make the year of construction date change in the regards of flood insurance rating this is the difference between Pre firm and post firm buildings.
Post firm buildings are supposed to be built to flood code and if not then sometime flood insurance can be very very expensive for these properties.
I also suggest that the seller give you money towards getting an Elevation Certificate ($600 - $1200) and then you can decide if you are going to get one.
@Richard Sherman I'm with Sir Richard here if you are planning to keep the home's say as rentals then there is a risk of flooding and I would totally keep a policy in place. If you are flipping it then I think you should make sure that the new homebuyer knows the property has had a loss and that you are indemnified should GOD forbid it to have another one.
That was a lot of very helpful information and appreciate the resources. So much to learn. I have been studying since this initial post and found value in all everyone shared. Thanks again.