Should we Pass on a flood zone property?

[Anthony Vespa]

we got into contract recently on a 14 unit property and go to find out its in a flood zone area (elevation cert. 22 feet). we finally received the ins. cost and flood cost on the property which came in at around  $ 19,500.00- double my estimate, so my bottom line got hurt by another 10K. Here is the real worry i have, 

Will the escalation cost of insurance out perform the rent increases of 3%? If so, my bottom line loses every year. I don't want to consider appreciation because we believe we purchased mid to high for the clearwater area. 

Here are the numbers: 

purchase price $ 900,000

25% down $ 250,000

leverage $ 650,000 = $ 4085.00 a month on a 5/25 amortization ballon. 

gross income $ 135,000.00

operating cost $ 64,000.00

net $ 71,000.00

less loan payments $ 49,020.00

net cash on cash return $ 21,980.00 8.8%

any advice would be greatly appreciated