House used to be in a flood zone, has 10% cap rate

[Abdul Hassan]

Hi everyone, newbie here looking for some advice.

I'm looking at a 4 family rental property in Bound Brook NJ. The house is in the part of town  that used to be a flood area, but since they've completed the "flood control project" about 2 years ago it no longer has that designation -  e.g. the house will not require flood insurance. 

The rental is fully occupied currently (has been for 2 years) and is bringing in about 58k in rental income, 41k net after expenses. It's listed at 375k, so it has over a 10% cap rate (hard to find in my area). 

The house itself is in decent shape (will find out more during inspection time), and I've made some calls around the town and it seems that there hasn't been much flooding in recent years, but I'm not sure what to do. I'm scared to go forward with it because of the past history with flooding in the area. The cash flow it produces is great, but it feels like a game of hot potato - you don't want to be the person who owns the house if/when it floods. I worry it'll be difficult to fill if/when the current tenants leave, and if it does flood again, I worry it'll be impossible to sell without taking a loss (thus wiping out any cash-flow gains).

What are your thoughts? Would you buy a good income generating house in a once-designated flood zone?