100 Year Flood Plain

Does anyone have any experience with a MHP in a 100 year flood plain? Are there any insurance options available to reduce risk? Just wondering if anyone came across this during due diligence and how it effected the deal. 

Please talk to your insurance agent or Kurt Kelley and he can help you.

Yes I experienced it first hand, NEVER think twice about any deal in a flood plain.    If you buy YOU know the problem and not if but when you look into the eyes of the residents with the sadness of their loss you will REMEMBER the look!!! Sure you can raise the homes up but why try and the problems are endless.    No way to guarantee an income plus WHEN it floods plus banks will be hesitant to loan plus TRY to bring in new residents–how do you explain no problem. 

If only a part of the park is in the flood plain then you could make an offer based on the part of the park not in the flood plain.  That way, you may get a good deal while not putting tenants in harms way.  The lots in the flood plain you would then convert to open space or possible surface storage, as in trailer or RV storage.Jim Allen

1 Like

Tell me F and T have you EVER experienced a flood plain disaster???    The property will Always have a nasty negative and I can guarantee aaronb that the next sale will be increasing difficult with more information given to users required by law.

I understand both F and T and Carl’s positions on this topic, and currently own parks with minor sections in flood plain. The only way you would ever want to tangle with flood plain is if everything else about the park is terrific, and outweighs the scarlet letter of flood plain.

First, I apologize if I’ve offended anyone here.  I am trying to offer constuctive ways to make money by being creative.  In real estate in general, there is much room for being creative, provided that one stays within the bounds of the law. 
If the entirety of the park is in a floodplain, then it is worthless as far as I can see.  However, if the current owner would agree to a price based on the lots that are not in the floodplain, then the new owner may be able to make a smart buy.  That is, he may be able to make money on the initial purchase and then more later when he grooms it to a 20 cap rate.  If you read Frank and Dave’s book the 10/20 system, you’ll note that several of those deal were partially in a floodplain. 
Likely though, the current owner would dig in his heels and hold that the floodplain lots are just as good as the non-floodplain lots.  And yes, I have experienced floods, major floods. Having grown up near the Little Miami and Ohio rivers in SW Ohio I saw all manner of things floating down those rivers and many families were wiped out financially.  My own basement once had 5 feet of water in it once.  I completely agree that it’s not fair to tenants, or any other stakeholder for that matter, to put them in a position knowing that they will, sooner or later, suffer flood loss.
Lastly, I think that there’s lots of money to be made by someone who can salvage poor performing parks that have problems that are fixable with some combination of knowledge, skill, and elbow grease.  This doesn’t include gangland or drug infested parks.
Jim Allen

Hi @FandT
I’m currently looking at a deal with potential floodplain issues.
Is there any way I could contact you to discuss some strategies?
dwryu72 (at) gmail (dot) com

MobileParkMan–been there done that never again!!! There are numerous parks available without that major issues. Try looking into the face of tenants that have lost all their earthly possessions and their home is ruined and you will be in the news!!! The value of the lots and even some out of the flood plain carry a negative and your rents will be less than other parks with similar amenities. FEMA has their nose under the tent and regulations as per setup for homes could become increasingly expense and complicated.

It depends on how deep the flood level is. You need to look into it. If the land is say only 1’ deep into the floodplain and the homes are blocked up 30", then the homes themselves are not in floodplain, just the land. You can even install new homes in floodplain, as long as they’re 1’ above flood elevation.

1 Like

Coach62 and who pays for the added cost for homes elevated and have you ever owned a park that experienced flood damage? We have and it will tear your heart apart if you care about people instead of just money. A park in a flood plain will always experience more costs vr a park not in the flood plain plus added insurance costs for residents.

I would not be overly concerned personally about the residents assuming they are all aware they are in a flood plain. Its no different than a park in tornado alley. If the homes are destroyed it’s too bad but your problem is the business loss not their personal loss.
I have had residents homes destroyed by fire and it is tragic but not my problem beyond determining if they intend to continue paying rent. Money is not my only concern but my business does come first.
Caring about people does nothing to bring their homes back so emotions do not enter the equation.

1 Like

@carl, @Coach62, @Greg
Thanks as always for offering your perspectives.
The flooding might be associated with a drainage issue that city has supposedly fixed.
The flooding affected a handful of homes and the rest are built on high ground that have never experienced an issue.
Even if I were to write off the potential ‘flood’ lots, which if there’s any risk of flooding again I would, there’s a lot of lots that can be filled.
It would be a big turnaround project.
But in terms of FEMA - not a flood zone. It’s in a low basin; flooding not caused by river / lake.
In terms of zoning issues in the city - no issues with the flood. Most in the city admin aren’t even aware that there had been a flood several years back.

So on to the question of - Can the lot be filled?
Time to talk to 21st Century / Clayton Homes and others ^^

Here’s a few more thoughts:

  1. Mobile home owning tenants in parks will typically buy flood insurance on their home ONLY when they are required to by a lender;
  2. The cost to carry flood insurance on a MH located within a 100 year flood zone is usually $100/month or more;
  3. Homes can be elevated to get them out of a 100 year flood plain, but the cost to do so can be $2,000 to $20,000 and then you still need a flood elevation certificate (about $400) to certify the home is now out of the 100 year flood plain;
  4. We’ve had some clients with a number of tenant owned homes that had to carry NFIP flood policies (fed gov’t issued policies) on every home they own at a substantial cost. The cost was high enough to affect the economic viability of the park, and at the very least, capped the amount of land rent that could be charged;
  5. You can NOT reasonably purchase loss of business income coverage on a park in a flood plain. It’s just not readily available - it has been from time to time, but today, it’s not.

Kurt, as you pointed out, the park can be in floodplain, but not the homes.

Is loss of income available for parks were the land is in floodplain but not the homes?

I’ve done a lot of research into this and it’s perfectly legal to install homes in a floodplain as long as they are blocked up 1’ above base flood elevation.

You said $2,000 and up to do this, but this is not always the case depending on the flood level.


Thanks for adding more info to this thread!
Great to get more perspective.

Thanks @KurtKelley.

Question - can you get loss of business insurance if say 25% of the homes were in the 100 year floodplain and they were all elevated out of the floodplain?

Also - does anyone know what resource I can use to look up the floodplain height? I don’t believe the standard FEMA maps show how deep the floodplain a park might be in.

Thanks for the nice feedback.

Coach - you can get loss of income on the land, but it almost always excludes flood as a covered peril. Thus, you have little financial help if a flood closes your park for any period of time. That’s why I recommend heavy due diligence on flood plain parks.

And yes, the height you raise a home can make a great difference in the price to raise it. We see homes along the cost raised 10’ plus and that can cost upward of $25k. A few feet, much much less. Get a quote from an installer and you’ll know for sure with your height.

Cole - You can get flood coverage on the home, yes. The price differs greatly based on the value of the home and the home’s floor elevation in relation to the area’s “base flood elevation.” But in practice, the park owner can’t get flood coverage on the loss of income any flood may create.

You generally need a flood elevation certificate to know your exact elevation heights in your park and on a particular home. As Coach pointed out, 1’ can matter a great deal.

1 Like

I am looking at a Park that is next to a Creek. I spoke with FEMA and how to read the map. I also had them give me a initial evaluation. They said the creek is a hair/small over the back part of the property.

I don’t see the point in going into the whole process, negotiating, contract and due diligence if this a problem. My question is who/what company can I call to do the survey/analysis on the park. I understand that you can dispute the flood zone and I would want someone who is “licensed/qualified” that can make that decision. Also, does any one have a questimate on the range of cost this would be?

Kurt-if this is the case with a hair of flood zone is it then insurable?

Thanks, Lynn

You need a surveyor to do what is called a LOMA application with FEMA to challenge/ modify their map. Surveyor will shoot elevations and if the property is above the flood plain they do the LOMA to modify Femas map

1 Like