Major damage caused by Hurricane Harvey, Insurance not covered

[Jeff McIntyre]

I own a single family rental property in Houston that was ravaged by Hurricane Harvey. I bought the home from Memphis Invest in the summer of 2015. They have been very helpful with information and updates through this disaster.

The home was flooded with approx. 5 feet of water throughout. I have no idea what the costs are going to be associated with this yet.

My homeowners insurance doesn't cover for flood and FEMA declined to provide assistance because it is not my primary residence.

Looking for some advice and maybe the contact info for a Texas real estate attorney....

1. The house is worth $145k.....Does it make sense to spend $50k or more on repairs??

2. Should I consider walking away from the mortgage and letting the bank foreclose?

3. Any other suggestions?

Thanks for any advice.....

Concerned..

[Jay Hinrichs]

I am sure MI will do everything in their power to assist you in this act of god event.

 I would caution U on just walking away.. Texas is a dual action foreclosure state.. they can and do go after deficiency judgments .. and the only way out would be a personal BK

You want to be in talks with them and negotiate out if your going to just try to short sell the property..

now during the financial crisis the fed's stayed the deficiency judgment rules on mortgages .. maybe they will do that for flood victims.. although it might only be owner occ's that get that treatment as investors are in a different class .

I would also caution you on getting a lawyer that could just be throwing good money after bad.. Only way I would do that is if YOU HAD flood insurance and they were denying it.. but if you do not have flood insurance and fema does not have a responsibility to cover non owner occ.. then that's the risk of being an investor.. you have to deal with it as bitter of a pill that is to swallow.

Other wise just rebuild and hopefully rents will be strong and your cash flow will allow you to recoup what you put into it over the coming decades.