Flood Zone Multifamily

[Scott Royer]

I found a completely remodeled duplex at a steal of a price.  It meets all of my criteria except one, it is in a flood zone. This flood zone happens to be in and up and coming area around a favorable market.

With the flood insurance included in my expenses, the property will provide a 18% year over year return.  Am I being too particular about wavering on this property because of the inherent risk?  Or will the insurance minimize my risk? The cash seems too good to pass up, so I will appreciate hearing what others have to say on the topic.

[John Mocker]

Scott,

With Flood Insurance in todays market, I recommend that you get quotes from both the FEMA National Flood Insurance program (NFIP) and also the many Private Market Flood programs. Many of the Private market programs will offer coverage not available from the NFIP including limits over $250,000 on the building and often come in with lower premiums. That will give you a more acurate estimate of the costs of that coverage.