Park in a AE flood plain

[Zach Scheer]

We are looking at a park in Mass. that has good cash flow and all the numbers work. I checked the GIS and it's showing that part of the park is in a floodwaters and the rest is in a FEMA AE 100yr flood plain. Does anyone have experience with having a park in an area like this?

[James C.]

Zach,

I don't know what you mean by "floodwaters", but AE is certainly a flood zone. If you own a MHP, then you are responsible for maintaining flood insurance on the buildings owned by the MHP. Theoretically, you should not be responsible for providing flood insurance for mobile homes in the park that are paying lot rent, but are owned by someone else. Park owned homes that are pledged as collateral for the loan would require you to maintain flood insurance. 

Keep in mind that you can have your title company provide you with a map, and areas with buildings outside the flood zones on the FIRM map are not required to have flood insurance. This may have changed, so double check on that. 

So, determine what you need to pay for, how much it will cost, and make sure it comes off the expenses side of the ledger, so that cashflow is correctly accounted for, and price accordingly.

Good luck!

Jim