House in a medium / high risk flood zone area?

[Chris T.]

Hello BP ! Do you think flipping a house in a medium to high risk flood zone area is worth it? I would like to hear your thoughts on this. Especially for the experienced flippers out there.

I know the resale risk is higher, and people w/ mortgages probably have to buy a flood insurance. Therefore lowering our buyer pool, and affecting the ARV of the property. I have checked floodsmart.gov and this is considered as "high risk".

I have already called 3 agents that do flood insurance. 1 of them says this is low to medium risk from a scale of 1 to 10 (10 being high risk), this property is a 4. 2 other agents have to do their homework first to confirm if this is a flood zone or not. 

Ultimately we have to take the discount into consideration when selling and everything is based on the numbers. What do you think ? 

[Jim Adrian]

I would pass on this.  It could be a hard sell when finished as you many be holding it awhile.  Find data of when the last time this area flooded.   Look at the fema maps and see if this is in the flood way or flood zone as these are different.  With a higher score tells me you are close to the flood way (channel of flood water like the river's current channel).  Adjust your margins for this if you decided to buy this.