The Effects of Harvey

[Edgar Cifuentes]

Hello all, 

I just wanted to get some insight on our current situation here in Houston and our surrounding areas. As investors I think we all understand the market is going to be full of flooded houses and a demand for livable move-in ready houses will be high. This catastrophe did not discriminate and properties ranging from 30k to 1 million were victims, and unfortunately from the many people that have called me to work on their homes they did not have flood insurance and are really depending on FEMA to help with the situation at hand. Everyone's situation is different and obviously there will be some irresponsible homeowners that will spend their insurance money on a new vehicle and wonder why they will not have enough to cover the 60k repair. This will then be the prime example of a "distressed seller", and this is where we come in to get them out of the hole they just kept digging into. Now here are a few of my questions and would greatly appreciate any input.

Will this be the best time to do short sales as the mortgage debt will be much higher than what a flooded house is worth?

There are many affluent areas still under water or damaged by the storm such as memorial, cinco ranch, meyerland, sienna plantation, etc. some of these areas have houses built in the 70's that in my opinion will need to be completely redone and brought up to code (I have been noticing this before the storm when I go to inspect houses) for a better ROI, these are really the ones I plan to target. What are your opinions on doing these type of flips in older affluent neighborhoods? I know there are houses that have been redone inside the beltway, but I am looking more into the Katy/Cinco ranch are and the Clay Rd area, these houses were flooded due to the overflow of both the reservoirs and now that we all know there is a possibility for it to happen again unless some major overhauling is done to prevent. In my opinion these would be great investments if they do something to prevent this from happening but also if nothing is done these might be areas now known to be in a "flood zone" as they should have originally been disclosed. Any thoughts?

Sorry for the long post.

[Candace S.]

Flood zones do not have to be disclosed. It's up to you to look at the maps. The areas flooded behind the reservoirs should probably never had been sold by the government. However, they were, and the buyers should have investigated. 

Addicks Res Map

Barker Res Map