All Forum Posts by: Cameron O'Connor

@Mike Wood Thanks Mike, that is very helpful! My background is in construction and have dealt with serious flood remediation on some of my projects. I agree, it is extremely expensive, all contractors add a premium because they know you need to get it done ASAP and know it's an insurance claim (not ethical but hard to prove otherwise) and just a major pain in the behind. 

The advantage of this specific property is the first floor is at least 3 feet above grade, and the grade is inclined and probably another 3-4 feet above street level. There is also a basement, but this basement has no drywall, doors, wood trim, and outlets are higher off the ground - likely for just this reason. And it was an extremely well built and thoughtful house. Now, there are mechanicals in the basement, so I appreciate your insight greatly, as I will definitely look into a way to elevate these.

Duly noted on the rise of flood insurance premium. Not looking forward to that.

@Jason Bott Thanks for the heads up. I will look into that and see what I can figure out. Appreciate the insight!

@Joshua Ratliff No problem, fair question. The reason I did not include that is because Tax and Property Insurance must be paid regardless of financing. Flood and PMI are only required because the bank financing (and federal laws). Once the property is paid in full, Tax and Property Insurance will still need to be paid. They are included in my expense calculations, along with vacancy, maintenance, CapX, etc. but those are beyond the scope of this article.

Thanks for reading!

@Jason Bott how do you submit for remapping or LOMA or other tools that I am not aware of before owning the property? Is this possible?

@Joe Splitrock A couple of his books are on my "To-Read" list. Any suggestions of specific ones that you found overly helpful?

You have a fair point, that was not the best argument, I am no lawyer, nor trying to convince anyone of a deal that works for me. However, my only point with this is, there are inherent risks with any property and I think a full evaluation of these risks are very important, rather than a blanket "Do not buy from a flood zone" type approach.

This property, while in a flood zone is exceptional. And I understand the negative impact of the flood zone, however, that is the exact reason I have been able to get a better deal on this. People are not as interested when they here it is in a flood zone, which can lead to sellers increase motivation as time ticks and they don't have interested offers. It would be ideal to put that $150/mo towards another deal, or a larger down payment on a different property, but I don't think that erases the fact that this is a solid deal. I remember a comment that David Green made, it was along the lines of - don't think of buying properties as if I don't want to buy this one, because I might miss out on another property that comes up. But rather, think of it as I will buy this property because its a good deal AND the next one that comes up. 

So frankly, in my opinion it has come down to, this is a good deal, that works for me, I don't need a home run on every property. Instead, consistently hitting singles will win the game - the game of financial independence.

Sounds like I do need a new bank! Chase only offers .01%, but frankly, I completely ignore this interest and only use Chase because of their ease of use and large integration in my area.

Thank you for the incite and continued conversation!

Also, anyone heard of the new FEMA NFIP 2.0? FEMA has announced in October of 2021 they are releasing an updated program to their NFIP that can change flood insurance premiums and essentially re-evaluate how they are currently configured. Anyone have any thoughts on how this will be determined? Any change your current rates will increase?

Here's a link to their website for more information. https://www.fema.gov/nfiptransformation

Flood Zone's are often talked about as the hatred zone. The no-go zone. But I've recently been reading about FEMA's Letter of Map Amendment (LOMA). Has anyone been issued a LOMA? How was the process? Is there any possibility that a surveyor could determine you're in a higher risk zone that originally quoted and drive the premium up? Any insight into the process would be helpful. Thanks!

@Erik B. Yes, I unfortunately had come to the realization that this house could be worth much more outside of the flood zone. However, if it was, I would likely not be able to/not want to afford this specific property. And my current goals are focused less on equity value and more on cashflow. I.e. I don't care to call myself a millionaire, a thousandaire, or any title referring to my personal asset value. I care more about finding deals that provide monthly/consistent cashflow that push me towards my goal of being financing independent.

Thanks for reading! I agree with the outdated and upside down flood system that is currently in place. I've been doing some research on LOMA's (Letter of Map Amendment), and am looking into this option once I have closed on this property. Essentially, my understanding of a LOMA is having a surveyor come to your specific property, determine elevation (instead of from an outdate map as FEMA does), determine adjacent structure (levees, dams, etc.), and can provide an Amendment from FEMA for your specific property to be considered out of the flood zone.

Anyone have any experience with LOMA's that can share some insight?

@Vahe Iskandaryan AWESOME! I'm glad I could be of some assistance. I am by no means the BEST RE investor, but I enjoy sharing my opinion on certain investing options. And this is my current approach.

I would've thought the exact same thing that you did, in fact I have in the past. So, I'm glad this was able to provide some insight. Good luck!

@Ola Dantis thank you for the kind words! I hear where you are coming from. And, frankly, there is not a one-size-fits-all approach to investing. This is how I feel currently at my age of 25, but I am entitled to change this at some point when don't need acquire any more properties and would prefer have more equity in each. So, I agree with your statement of this is a dynamic approach depending on age. Thanks!