Flipping Homes In a Flood Zone

[Dan Carbone]

I'm looking into a home in Fl that is in flood zone AE, has anyone had any experience flipping a home in a flood zone? Do they sit on the market longer than flood zone X? Also will a hard money lender require me to carry a flood insurance policy while I own the home?

[Austin V.]

The general answer to your question is yes. Particularly if there are not a large number of homes in flood zones in your market.

Any traditional lender is going to require you carry flood insurance and any new buyer will have to do the same.  A hard money lender may or may not ask you to carry the insurance, depending on their level of sophistication.

Not only will you have to deal with the stigma but you will have to deal with the increased monthly payment for a buyer  when doing  calculations for whether not they can afford the property. 

Overall you can usually plan on a flood zone property selling for 10 to 20% less then a similar home in a similar neighborhood And being on the market for longer. 

In other words, I would only buy it if it was a phenomenal deal.