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Updated 14 days ago, 12/19/2024
Purchasing a fix and flip in flood zone
Hey everyone, I wanted to get the opinion of someone with more experience than I have. I am looking to purchase a fix and flip in Daytona Beach, Fl. The deal makes sense financially however the house is in a flood zone A and flooded during this past hurricane season. This is the first time this area has flooded in years. With hurricane season now over and the house would (hopefully) be sold well before the next one I am curious if anyone has any seen any change/decrease in sales with areas that have flooded recently? Thanks!
- Real Estate Consultant
- Mendham, NJ
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Buying in a flood zone, especially A, in Florida, where it recently flooded would be a terrible purchase to me unless they are giving it away. I mean, giving it away. Why do you think this will do well when you make it look nice on the open market and disclose it's in a flood zone and flooded in the past year? It's like buying a house next to a bus depot. House is good, locational significance is not. There is a price for everything, but flippers make the mistake of thinking they can still get market value on a locational error.
- Jonathan Greene
- jonathan@trustgreene.com
- Podcast Guest on Show #667
Quote from @Sam Dunlop:
Hey everyone, I wanted to get the opinion of someone with more experience than I have. I am looking to purchase a fix and flip in Daytona Beach, Fl. The deal makes sense financially however the house is in a flood zone A and flooded during this past hurricane season. This is the first time this area has flooded in years. With hurricane season now over and the house would (hopefully) be sold well before the next one I am curious if anyone has any seen any change/decrease in sales with areas that have flooded recently? Thanks!
- Chad Shultz
- chrfpropertiesllc@gmail.com
Quote from @Sam Dunlop:
Hey everyone, I wanted to get the opinion of someone with more experience than I have. I am looking to purchase a fix and flip in Daytona Beach, Fl. The deal makes sense financially however the house is in a flood zone A and flooded during this past hurricane season. This is the first time this area has flooded in years. With hurricane season now over and the house would (hopefully) be sold well before the next one I am curious if anyone has any seen any change/decrease in sales with areas that have flooded recently? Thanks!
Yep, are there some people who will buy in a flood zone? Sure. But More people will buy in a Zone X. It's the first question I ask buyers/sellers. Most of my buying pool won't touch flood zone properties.
I've done deals in flood zones and flood insurance is not cheap. You'll need to figure that in to your numbers.
I stay away from flooded properties and those in flood zones. For many of the reasons already stated. Your goal is to reach as many potential buyers as possible, and right off the bat you're limiting your pool of buyers. I think many people are going to avoid buying in flood zones, especially after the back-to-back hurricanes we had. Fixing and flipping in Florida is hard enough these days without making it even tougher on yourself.
@Mike Klarman: Can you quantify what "not cheap" is? I purchased flood insurance on a Zone A property in July this past year on a house that had previously flooded. A 12-month policy was only ~$900
- Chad Shultz
- chrfpropertiesllc@gmail.com
I think it depends on the area and insurance costs. I would get an opinion and recent comps in Flood Zone a from a few different agents to make sure you are doing your due diligence on the resale market in that flood zone, especially with the recent hurricanes