Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
7y
Properties located in flood zones are perfectly fine as long as the heated living area is above the base flood elevation.
Things to consider would be the cost of flood insurance as lenders will require this and it can be expensive in some areas. Things to consider would be the cost of flood insurance as lenders will require this and it can be expensive in some areas.
From a listing standpoint the flood zone will be disclosed and is standard practice when listing properties in a flood zone.
The only time the properties can become hard to sell is that they are below base flood elevation and have a history of flooding.
Real Estate Consultant · Lansing, MI · Member since 2011 · 356 posts · 306 votes
7y
And in my experience, some areas have really been targeted by insurance companies, which have raised rates. If it's me, I get a couple of quotes to make sure the premium isn't something outrageous that would prevent you from selling down the road.
For example, in my market of Nashville we had a BAD BAD BAD flood in 2010. After that you couldn't give a house away if it was in a flood zone.
Now, almost a decade later it has subsided. FEMA has moved their maps around. People are more willing to purchase homes in flood zones, however; if the lender requires flood insurance then there is definitely going to be a price reduction in the final sale.
Investor · Nashville, TN · Member since 2017 · 21 posts · 11 votes
7y
@Thuy Pham-Satrappe a strategy I have used to sell my personal flips in a flood zone is offer to pay the first 2 years of flood zone insurance for the new buyer.
I am currently going through this with my personal residence that we flipped and the subsequent lot attached to the property.
Rental Property Investor · San Clemente, CA · Member since 2019 · 160 posts · 34 votes
7y
@Wyatt Cutler Tiffany thank you for sharing! I was thinking that could be a concession if we have hesitation from the buyer, or do you offer it upfront?
Developer · Dallas, TX · Member since 2015 · 84 posts · 79 votes
7y
@Thuy Pham-Satrappe
My first property was in a flood zone as most properties in my home state of Louisiana are. There's no way around it where I'm from.
Aside from handling any apparent drainage issues there's really nothing additional you have to consider other than additional insurance costs. You'll want to maintain flood insurance from the NFIP. Obviously your end buyer will have to do the same.
Investor · Nashville, TN · Member since 2017 · 21 posts · 11 votes
7y
@Thuy Pham-Satrappe I usually dont offer anything up front. If you do and the potential buyer is represented by a good agent they will inevitably ask for more (give an inch and they will take a mile). Also I found that when the potential buyer has walked the house and is willing to make an offer you have more bargaining power to then start negotiating. Now that being said that usually only works when you have created a desirable flip and you're already priced below some of the other houses in the neighborhood (if the other houses are not in a floodzone like my current house). What gets people excited is the lower price point in whatever neighborhood your in. You can only make the returns your looking for though if you have bought the property right.
I dont mean to drag on, and I'm sure other people on this site have had success doing things in a different way this is just what I have found to work in my market. Its hard for me to speak on the CA market since I have never done any work there. Flood zone houses are tricky and can be a riskier investment but if bought and handled correctly they can definitely lead to a good return.