All Forum Posts by: Kevin Kong

Originally posted by @John Mocker:

Kevin,

there are now alternatives to Flood Insurance offered by FEMA (NFIP policies). These "private Market" flood policies use different rating and often are significantly less. I would get quotes to see what you are actually dealing with for the flood Insurance.

If you do plan to make changes to lower the flood susceptibility and insurance cost you should discuss it with an agent who understands the flood rating.   There are changes that impact what is considered the lowest floor.  The elevation of that floor compared to the Base Flood Elevation can make a big difference in the flood rates with some companies.

 Thanks for the reply and input!  I would have never guessed that there was something like this.  I may have to call around and get prices to see what might be best, but from the sounds of it a lot of people are telling me to stay away from it.  

Originally posted by @Evan Polaski:

@Kevin Kong, I would also be concerned about the insurance for this house.  If you haven't gotten a bid on that yet, I would.  

From there, I agree with Jim.  Not only does this sound like a massive under taking, but I would be curious what the cost is.  Stilts, pumping 24 inches of concrete under a house to raise it up.  That all sounds like a 6 figure endeavor.  

And along with Jim's comment: I toured the Farnsworth House many years ago.  When it was built in 1951, the stilts placed above the 100 yr flood plain.  It flooded in 1954, 1996, 1997, and 2008.  So the 100 yr flood plain was breached 4 times in 70 years, including 3 yrs after completion.  And there have been many other times that waters got very close to the finished areas.

The little info I have on this property, I would steer clear, personally.

 Thanks for the reply!  It seems like that is the verdict.  Everyone i talked to said stay away.  You can't be too safe especially in flood zones.  The one that happened recently was one for the books in this area.  I appreciate your help.

Originally posted by @Jim K.:

@Kevin Kong

I think the trenches you're talking about are called French drains.

But if this is your first foray into real estate investing...wow, that's a heavy-duty project that's putting the cart before the horse. The other thing I would also ask you to think about would be climate change. Do you really think that current flooding levels are going to stay steady or is there a high probability that they will they get significantly worse in the years ahead?

If you saw that this property flooded to 10 inches a few years ago, what's to stop it from flooding to 16 inches during the next "once-in-a-century" storm that, wonder of wonders, comes along in in the 2020s?

Thanks for the reply!  Yea i was worried about that too thats why i wanted to built stilts on the house and raise it 4 feet so I wouldnt have to worry about floods in my life time at least haha.  I noticed the area where the house was some people had the "french drains" already and I'm curious to see how they held up.  Thanks again for your help.  It looks like more and more people are telling me to stay away from flood area homes.

Originally posted by @Marcus Auerbach:

Stay away. Flood insurance is bound to go up in cost. If you have higher ground on the lot you can move the house, but probably not worth the expense.

Thanks for the reply!  Yea after reading some more posts and getting some feedback it seems like it may not be worth it.  Thanks for your help!

Originally posted by @Aaron K.:

@Kevin Kong the thing about flood zones is that depending on how bad it is only about 30-40% of the problem is the actual floods themselves, the other issue is the super expensive flood insurance that you will be required to maintain while you own the property, I don't think it would but raising the floor may help prevent cosmetic damage but if the flood is bad enough it can still cause damage.  Unlike many other things that cause insurance premiums to rise (like a pool) being in a flood zone does not typically increase your rent unless the home is directly next to a desirable water feature like the ocean.  So essentially in 90% of cases you increase your costs and risk for no increased reward.

thanks for getting back to me!  Oh okay that makes sense.  The house is in an amazing school district and all the houses around there are really nice.  I was going to contact my insurance guy and see what the premium is for with flood or without flood insurance.  Seeing how it probably wont matter I will probably just keep looking.  Thanks for the input.

Thanks for everyone who took the time to read this dumb post of mine.  I was wondering some stuff for rehabbing to refinance and BRRRR my way into early retirement.  I found this house on the MLS that's in a 6/10 flood zone.  There was a recent flood in the area that rose about 17-24 inches.  The house I saw had water marks about that high.  The house is a ranch on a concrete slab.  Since I dont want to buy a house that could essentially destroy all my stuff I was pondering ideas that may help.  First thing I came up with is put the house on stilts.  The house is roughly 2800sqft so that would be too expensive.  I was also thinking of adding cement to raise the floor around 24inches or more.  I know if I did that I would have to raise the roof as well and move everything up 24inches.  I know this seems like a lot of work and money but the house is listed at 299k.  The surrounding houses are at over 550k for the same sqft.  The house actually sold in 2018 for 625k.  Also would raising the house save me on my insurance?  I was also thinking of making creative trenches so the water fills up before it reaches the house.   Or should i just completely forget about this house and move on?  Thanks for any and all the help!

Hi I was wondering what would be the best way to prevent a house from flooding other than not buying a house in the flood zone.  There is a house in the north suburbs of Chicago in a amazing school district, but its in a flood zone 6/10.  From what i see they redid the house and it flooded about 17 inches on the house.  They cut out the dry wall and everything but from where i saw the mark on the walls it looks like 15-24 inches.  The house is on a concrete slab with no basement.  I was wondering if it would be better to pour cement to raise the entire living area of the house 15-24 inches a reasonable thing to do?  I figured if this was the worst flood they saw and it rose that much building a extra 15-24 inches of concrete wouldn't be too bad.  I was also thinking of putting the house on stilts but that looks to be super costly.  Also if i raised the floor i would also raise the roof.  All the windows and everything looks new still so i would be reusing those as well.  Im planning on buying this house fix it up and refinance it and BRRRRR my way to a early retirement.  Thanks for all the help

Hello everyone!  I believe this is the right post for this.  If not someone please guide me the way.  I'm probably going to move to the Jacksonville area and was wondering if anyone knew a respected realtor in the area who may be able to answer some of my questions.  I'm looking for purchase a home and start a new business in Jacksonville.  The move might not happen for several months though.  I have a restaurant in Chicago and I want to start a food truck or restaurant in Jacksonville. I hate Illinois tax.  If anyone on this forum can help me with some areas that would be a good spot for lets say a Korean fusion spot, please let me know the areas so I may venture and look at the area.  Any help is welcome!  Thanks!

Hi I’m trying to learn the MHP game. After listening to podcasts and having a close friend who actually invests in it I was trying to figure some stuff out. I listened to the podcast about MHP and I remember to have a check list with certain things but I was confused on how to run comps and other expenses. I know for apartments you need to have certain rules/guidelines such as 1% rule and stuff. Is it the same concept for MHP?  Thanks for your time 

Hello BiggerPockets!!  I was listening to a biggerpockets podcast and i forget which episode it was, but they talked about it for a little bit.  Does anyone know how much tax gets taken out of the interest rate for the lender?  Im trying to offer the owner a owner finance option with a 0% interest rate but higher purchase price.  Since you get taxed on both I wanted to do what they talked about and give more on the top end but little to no interest rate.  Let me know if this makes any sense.

Business asking price is 569k in illinois.  With 5% interest on a 20 year loan it would be around 40100$ total.  I wanted to add an extra 30k to the asking price with a 0% interest rate.  Does this seem completely dumb on my part?  Would anyone take this deal if offered to them.  Thanks again for your help