My boyfriend and I bought a house through new western acquisitions (wholesaler company) for our first rehab. Bad idea # 1, anyways we got the property in a great area of town and had to close in 3 days, so we were not able to get an inspection. Initially we only got the house because it had a huge basement we were going to turn it into a master, today we learned a surveyor has never came to the property and that it is in a flood plain. So according to code we cannot finish the basement for a master or include it for square footage when we list it. Could we get sub contractors to finish the basement as a master and list it in the square footage anyway ? And In force flood insurance to the buyer.
Is this a buy and hold or a flip?
Many people rent out properties with "bonus rooms" they just get a little bit of a lower rent. Same thing goes for selling a house. If you finish it it will slliiiightly boost your home value but not as much as if it was legal.
It sounds like it's time to get creative with your options. What line in the code is stopping you from finishing it? Is it enclosed on all sides and completely below the flood plane? In my experience flood planes can be a total headache but sometimes there are ways exceptions in the code that still allow you to continue with construction - might just have to adapt a bit.
I'd consult a local architect that has experience in flood planes. They should be able to assist you in figuring out what your options are.
Hi @Kally Dobak - I am the General Manager and Principal Broker for New Western Acquisitions here in Nashville, and I wanted to provide some information on this to possibly help you along your way.
I spoke with Anthony, the Sales Agent you and your fiance (Zain) were working with on this transaction, and he informed me that at the time of purchase there was a conversation about the presence of a floodplain on the property, but that local maps showed that it did not actually touch the property dwelling. Typically in situations such as this, an elevation certificate (or something similar) can be obtained to show that the dwelling itself is not in the flood zone, but that simply a portion of the property is. An elevation certificate can be obtained from a survey (though there may be other methods locally as well). I am by no means an expert on this and am simply regurgitating experiences of other investors I have worked with, but in this scenario the dwelling itself would not be treated as having been in the floodplain.
After reading your post I circled back with the Acquisition Agent who procured this property, and he confirmed that the information provided by the seller was that no flood insurance was required on the property due to the floodplain simply encroaching on the backyard and not the house. I hope this helps. I am unaware of any reasons that the basement would not be allowed to be finished out, unless they are treating the house as being a flood risk. Here is a quick link from the FEMA website that quickly outlines Elevation Certificates and how to obtain them.
Only way of truly knowing is via a survey. This can take about 3 weeks.
Parcel viewer can show you a general outline, but not exact of flood plains.