Seller didnt reveal flood zone.Already in contract. Help.

[John Jacobs]

I'm starting to feel like a jumped the gun a bit on signing the purchase contract. I just found our recently that the house is in a high risk flood zone and just took a large chunk of my returns. FYI the owner/agent failed to disclose that the house was in a flood zone when I signed. I was still wondering that even with the extra 2k a year in flood insurance if the following would be considered a good deal.

The property is two units with two apparently solid tenants already occupying the units. I want to know if on its face, would you guys consider this a good, bad, or decent deal. My goal is to have a good cash flow and a good Return on Investment. Let me know if there’s anymore information you guys needs in order to make a fair evaluation.

2 Unit Residential

129,000 Purchase Price

25% Down = 32250

Loan Amount 96750 @ 4.75 Interest

Closing Costs = 6500

Down payment plus closing costs = 38750

Mortgage plus Taxes = 9720/ year

Taxes = 3500 year

Rental Income (2 Units) = 21600/ year

Landlord/ Hazard Insurance = 1800 /year

Flood Insurance = 2000/ year

Sewer and Water = 1200/ year

Maintenance and Repairs = TBD

Thanks