Hello BP ! Do you think flipping a house in a medium to high risk flood zone area is worth it? I would like to hear your thoughts on this. Especially for the experienced flippers out there.
I know the resale risk is higher, and people w/ mortgages probably have to buy a flood insurance. Therefore lowering our buyer pool, and affecting the ARV of the property. I have checked floodsmart.gov and this is considered as "high risk".
I have already called 3 agents that do flood insurance. 1 of them says this is low to medium risk from a scale of 1 to 10 (10 being high risk), this property is a 4. 2 other agents have to do their homework first to confirm if this is a flood zone or not.
Ultimately we have to take the discount into consideration when selling and everything is based on the numbers. What do you think ?
I would pass on this. It could be a hard sell when finished as you many be holding it awhile. Find data of when the last time this area flooded. Look at the fema maps and see if this is in the flood way or flood zone as these are different. With a higher score tells me you are close to the flood way (channel of flood water like the river's current channel). Adjust your margins for this if you decided to buy this.
thank you @Jim Adrian
I have checked the fema maps as well, and it seems like it's right at the border between low/high risks. The front of the property where the house is in a low risk but the huge backyard at the back is high. But it might not mean anytime. So I'm hoping the other agents can give me more confirmation.
Do you know where I can research to find out the last time this area was flooded?
Im not quite sure but I would start with Fema which may take a few calls or emails. Flood Ins would be another good sources. I would bet they track this type of information to set premiums.
ok thanks again!
Hi Chris - As you can see, I am quite new here, but I have had to deal with a very similar issue with my home. When I went to refinance my mortgage earlier this year I was told that the underwriter required I get flood insurance since we were in a high risk flood zone. I was surprised, to say the least, since I'd never had this issue before, and I've lived in the home for 13 years. I checked the FEMA maps, and sure enough, they said I was in the flood zone, but only part of the property - the actual house is not. I worked with the Dupage county stormwater management department as well as the local FEMA office here in Chicago - both were very helpful. I can give you the names of the people in both offices i worked with if you'd like. Long story short - we ended up not having to get flood insurance because only the backyard, and not the garage or the residence were in the flood zone.
Hi @Jeff Atwood
Thank you very much. Yes, I will PM you if you could pass along the names. I have a feeling it may be a potential issue when re-selling the house.
Did you have to pay to have a surveyor come out to confirm your house was not part of the flood zone?
I appreciate your input and feedback on this!
Fema flood maps are regularly updated. The flood areas see to keep growing outward.
@Chris T. here is a link to the official FEMA flood map. You can type your address in the top right corner and it will pull up an image of your property with the flood lines and designations. As a surveyor these are the maps we use to make flood zone determinations.
If the structure itself is not in the flood zone, but other parts of the property are, you should not be required to have flood insurance.
Feel free to PM me if you have any questions and I will try to help you out - I am in Florida.
Here is the link:
thank you @Dave Dagostino
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