All Forum Posts by: Julia Rohleder

We have been looking for a couple of years for a house in an expensive area. Many of the houses were built in the 50's, have had DIY low end remodels, are 2500-3000 sq ft, and are around $350k. Most of the homes need electrical redone. My #1 desire is a good lot. We would want to live in this house for at least 5 years. The investment aspect that's most important is not to spend too much, so we can retire, not to flip it. There's a house in foreclosure with a great lot in a perfect location for us. It would need to be lifted, because the ceiling in the basement is too low. A garage space would need to be added, because it's only a one car garage. We'd need the main level reworked and the kitchen redone. I would love to add a 2nd story with 2 bedrooms and a bathroom. The house is listed at $262000, but I can't imagine they'll get an offer at that price, because the basement is really terrible. The MLS info isn't accurate, as far as it including a basement bathroom and a finished basement. We'd offer $140000. I could get estimates to back up our offer. There are many lots priced above that, and it seems it would be cheaper to have a foundation and utilities already run to the lot. We would used an architect and licensed contractors to do the work. Any thoughts on the offer price or the headaches involved in embarking on this type of project? Any thoughts on what the improvements would cost?

Thanks for all of the comments. I have found out that the differences in the insurance quotes are due to differing amounts of coverages. We live in Colorado, and last year we had a year's worth of rain in one week. It was enough rain to take us out of the extreme drought that we've been in for years. That creek flooded, but this property didn't. I'm not worried that the house will actually flood, it's the cost of the flood insurance that I don't like. We would be paying $2500/year on a $380k house, just for flood insurance. That seems like a lot of money to pay for something that doesn't help to pay off the mortgage. The way I see it, the more money I spend now, the longer I have to wait to retire. I'm waiting on one more quote to come in. That company is actually going to send someone out to the house. I'm curious to see how someone going on site will affect the premium.

We have found a great house, in a great neighborhood, that typically has great resale values. The house is priced lower, because it needs updating. The house is designated to be in a special flood hazard area. The description says that there's a 26% chance of a flood event over the course of a 30 year mortgage. The first flood insurance estimate is $3200/year, which would be a deal breaker. I've heard that USAA is typically very expensive insurance, so we're going to get a couple of other quotes.

Our biggest quandary is that this seemed to be a GREAT investment, because these types of homes in this area don't come up very often, in this price range. The fact that it was in a flood hazard area wasn't disclosed by either realtor, even though we specifically asked if it was in a flood plain. We've paid for the inspection, and the house is in great shape, and shows no water damage. The creek near this property flooded in Sept 2013, but this house nor the houses across the street (closer to the creek) were flooded.

We are angry with the realtor, and kind of want to say no deal. We've fallen in love with this house. I wonder if I would feel differently about the investment aspect of this property had the flood insurance requirement been disclosed up front.

What kind of impact does the flood insurance requirement have on the resale value and the ability to rent this house?