Buying MF in a flood zone

[John Blanton]

Working on a potential opportunity in a flood zone

Should buying in a flood zone be a non-starter? 

Not sure the elevation certificate, but according to the flood zone map the flood zone is AE. The property did flood just last year which left it currently uninhabitable

Seller is currently delinquent on property taxes and unwilling to make repairs on the property which is motivating them to consider very aggressive offers. The building is relatively good size (20+ units) and could handle a decent amount of capex cost ($200-300k) if the purchase price was low enough. The property was fully occupied previously prior to the flood damage.

Business plan is to perform needed structural and unit rehabs, lease up/ stabilize and look to exit the property to an investor

Wasn't sure investor appetite for buying properties in flood zones on exit

[Andrew Schutsky]

Hi John - As an investor in FL I can relate to the flood zone situation! While I typically don't immediately rule out an opportunity just because it's in a flood zone, it's a significant expense (and risk) that most would consider unnecessary since there are plenty of properties outside of flood zones.  With that in mind, if you have quotes from insurance firms and the numbers work, why not go for it?