Also if you think the property is located high enough, you can get an elevation survey done to try to get the house exempted from flood insurance.

There are other apartments in the area that are available, that are low income (which is what he needs anyways) and have elevators in them.

The top of the lowest part of the foundation must be 1 foot above the flood plain, if you house is in a flood plain but built on a mound or hill, a "spot elevation" by a surveyor is worth the engineer's assessment.

My plan is to spend between $20-$30 per foot to remediate all that damage and bring it up to Class B+ (there is no elevator).

He even sugested building elevator shaft into 1st 2 stories (just use as storage until) so when it did go higher you you then pay to put in elevator....  

Lower-end houses you may see too thin margins or elevated risk and higher-end houses your profit margins will end up considerably higher than your competitors and you'll likely close fewer deals.- This assumes that your financing costs aren't tremendously high, as they sometimes are with hard money lenders.- This assumes your happy with about 12-18% ROI on your invested capital (for an all-cash deal).In my opinion, there are better ways to evaluate a deal. 

The problem is that there is a flood zone along this creek and it only impacts 5 or 6 houses, so none of my comps are in the zone.Of course, I would get an elevation survey to see if the structure was actually in the zone, but I am pretty certain it is.

I'll even throw in a brand new AC and water heater and you're still nowhere close to $30K.I think you can elevate the value, improve the cap rate and not risk $30K.

We're maybe a quarter of a mile from Clear Creek, but its about 30-40 feet below us in elevation.

This article, "Fix your elevator speech"http://www.inc.com/marla-tabaka/fix-your-elevator-speech.html did makes some good points.