Duplex in the studs but location is in flood zone

[Jobin Cherian]

hey everyone, 

I have a duplex that we bought about a year ago from a friend of ours. It went original owner>wholesaler>wholesaler friend>to us. We typically trust our friend since they have over 500 properties and have sold us several and they did not know it was in the flood plains. the original owner tore it down to the studs on the inside and when he filed for a permit, the city mentioned that he probably knew that it required fema requirements of being raised about 30 inches. This was never disclosed. The problem is this house sits on a slab. We found the same problem once we went to get permits and since FEMA has a 50% substantial improvement clause, they required us to raise the property or some solution to reduce the risk of floods. We know ultimately we should have done our due diligence and we will never make that mistake again. we are trying to go through all of our options and we need the help of our community. we have had this property for almost a year. we will be meeting with the city again next month to discuss our options but we wanted to be well prepared. The city has not been beneficial at all at this point. Most foundation companies and structural engineers do not sign off on us raising the foundation due to the high damage risk and the cost associated with it. With stem walls, I know a couple of their flood guys said it may result in us also having to do a flood study in the area and another foundation guy said it may throw off property values. One other option is if we had multiple bids for rehab at under 51.5k. the appraised value is 123, with land being 21k at a total value of 102k and FEMA requirement is we have to follow the rules if it's over 50 percent. we are all in at this property at 135k and with insurance cost etc, 140k. we think the property will be worth 280-300k. Are there any solutions/ideas you guys might have for us or any point of contact you recommend I talk to? I want to resolve this property as soon as possible because I feel like it's paralyzed the rest of our deals. Any help would be greatly appreciated. Thank you again.

[Kevin Sobilo]

@Jobin Cherian, I live in an area with a fair amount of properties within flood zones.

Are you sure of what you were told?

We have a town here that is in a flood zone and if anyone does a substantial remodel, they need to do things like make sure the HVAC and I think the electrical panel are above the 100 year flood elevation. So, that means moving those items which are typically located in the basement here to somewhere higher up in the house which isn't cheap but is doable.

With regard to raising a house. I always thought that was an option if the owner wanted to bring the house out of the flood zone by getting some sort of elevation certification saying the house itself is above the 100 year flood plane and therefore does not need flood insurance.

I would dig into those details and perhaps consult a local real estate lawyer who might know better.