Park in a flood plain

Hi,

Anyone out there ever a] purchased a park in a flood plain and if so b] were you able to get it financed with a local bank? Situation where a park is in one but no issues in decades. I understand weather can change but just interested in your valuable opinion!

Thanks!

Dave

I’m also looking at a park in an AH flood plain. Would be very interested to hear how prior purchases have gone with financing and obtaining flood insurance for the park.

It’s all going to boil down to the following:

  1. How many lots are actually in the floodplain (and houses on those lots that are part of what the lender is counting on for you to pay your mortgage).

  2. The Base Floodplain Elevation (BFE) of those lots. This is the height the water would actually get above ground level if there is a flood. Remember that mobile homes sit about 3’ off the ground, so water that would hit 12" in height would only impact the skirting and possibly the electrical system. If the water could rise higher than the floor of the home, then that would be a crisis situation.

  3. Whether the water is in the direct flow of the channel or what is called “pooling” water – in other words if the water has a strong current or virtually no current. Current is bad as it can rip homes from their anchors and other bad issues.

There are a huge number of parks out there in floodplain and most of those have mortgages and flood insurance (as well as loss of income insurance). It’s not necessarily a deal killer but you have to get the facts and then talk to your insurance agent on what protections are available.

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Thank you Frank! Really appreciate the guidance! The particular park I recently looked at had about 40% of the pads in the zone. I also found out that it was prone to flash flooding rather than a lake / river etc. Your comments will be very useful to me as I evaluate deals moving forward. Thanks again! Dave

Ditto to what Frank said. I’d add that some banks will require, and if you buy the park you may want, loss of income coverage that includes flood as a covered peril. This coverage is relatively expensive at maybe 10x the cost of regular loss of income coverage (wind, fire…). Sometimes this becomes a deal killer. It’s rare for a seller to have this coverage or disclose the cost of it if they do.

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That is excellent, than you Kurt! Great advice.