Negotiating Previously Flooded Home

[Jerel Davis]

I’m under contract for a property in Brookshire, Tx and the sellers stated in their sellers disclosure that the home flooded during Harvey. During due diligence, I found out that there were actually two claims: Harvey and Tax Day Floods during their ownership. This deal is make or break on the premium for flood insurance and the insurance company cant find the elevation certificate, but insists there was one. The sellers current coverage is 40,000 building 5,000 deductible with a $1,364 premium (which would probably mean I’d need more coverage and would have a higher premium if new elevation certificate doesn’t help). My loan amount would be $100,000.

How would you negotiate the fact that seller did not give full disclosure on the flood history?

I’m two days away from the end of my option period. I Still need the survey and elevation certificate to get hard numbers.

[Meir Greenblatt]

I would recommend to stay away from flood houses here in Houston, unless you are a savvy investor and did already a few flood house flips before,  for buy and hold I don't see the point,  since there is a high chance of flooding every 2 years,  which means a lot of headaches, tenets moving out, and increase in flood insurance,  and even if the house was elevated then there CAR will get flooded,  which still leaves you with not happy tenets. The tax day flood of 2015 was very fast and quick,  and was caused only by extreme rain and not even a storm. 

I know you are probably getting the house for a good deal,  but is it worth it, and maybe you can find a different deal that is not flooded.

He agreed for 10% less he may agree to let it go for even lower,  now try to put yourself in his shoes, and do you want to be there.

(This is just my thoughts,  I'm not a experienced investor, just a newbie,  and ofcourse you should make the decision yourself)

Good luck