Park in the 100 year floodplain

Hey everyone! I have a small park under contract near San Antonio TX that’s in the floodplain. It’s an unusual property as it has two permanent houses and four park owned mobile homes on a 1.35 ac lot. It’s large enough for more mobile homes, but since it’s in the floodplain I don’t think the city will let me add any unless they are raised above the floodzone. I’m going to get elevation certificates to find out how high the floodzone is, and I’ll have to keep flood insurance on the homes that aren’t raised. We had two very bad floods within the last 12 months, and it doesn’t look like any of these homes were actually flooded. I think only the lot itself fills up with water in places. Does anyone have any experience with floodzone properties? Is it a bigger deal than I’m thinking it is? My house is in the floodzone and it’s not a problem at all. Also, does anyone have any experience raising mobile homes onto taller framed foundations? This is my first ‘park’ and I’d like to be as prepared as possible. Thanks so much!

A property being in a ‘floodplain’ typically means it is in a FEMA designated 100 year floodplain, meaning engineers have estimated the property will flood on average at least once every 100 years. It’s unlikely the two floods you had in the past 12 months are on par with the worst storm that would expected over a 100 year period.

I’ve never placed homes in a floodplane (doing so is fairly rare) but if you’re in a great market it may be worth it, and the added cost will likely be heavily influenced by how high the floodplane is. If your park is in a mediocre location the lots are likely empty for a reason.

Our company kicked around a similar deal. It was a 20 some lot park that was being packaged with a 100 lot park. Both parks had problems and we initially thought that the 20 some space park could carry the 100 spacer for a few months until we got it cash flowing. Big problem was that we knew the 20 some space park was in a 100 yr flood plain. Our line of thinking was very similar to yours. Is it really that big of a deal if we can get them at “x” price with “y” terms? Well, we typed in the name of the river + flood and this pulled up:

From an ethical standpoint, I certainly have a problem with owning something like this. I just don’t want any part of that after seeing a real life picture of what actually happens in these situation. From a business standpoint, it raises some very tough questions:

  1. Provided we can’t get seller carry to term, what bank will ever finance this?

  2. Who is actually going to buy this from us when it’s time to dispose of the asset?

I bought a former gas station that spans across the floodway, 100 year, and 500 year flood plains from a “bayou.” The environmental stuff is another conversation.

The development costs were 15% higher because of the additional engineering, surveying, and site preparation required to address the city’s requirements. We got lucky and did not require detention, so it could be much much more depending on the results of a hydraulic analysis.

I would never develop anything without the proper site preparation, which would help alleviate the scenario @CharlesD painted so well above.

Noel, “technically” that’s not really correct. The definition of a 100 year floodplain is not that it will flood once every 100 years. It means that every year it has a 1% chance of flooding. I know the difference is minor, but there is a difference.

The challenge with the 100 year flood plain is that the flooding can happen the day after your closing. So beware when you are entering into these agreements and seller financing is a way to ensure you are covered some what.

Keep in mind that FEMA cannot / does know the exact boundary of the floodway, 100, and 500 year floodplains - they make general estimations that are usually pretty good.

On my property we had a topographic survey performed to compare the land versus FEMA’s data, and found that the FEMA maps were overly conservative and explained why a 1000 year flood only reached the 100 year and part of the 500 year plain.

There is a process to have the FEMA maps corrected with this data - it’s called a LOMA or LOMR and had that updated for insurance purposes.

Thanks for sharing. When you presented the results from the topographic comparison, was this in an effort to have FEMA modify their map? Did you have success, was the process easy , timeframe to get the change made? I know Frank posted about one of the larger gas stations that did this and just trying to have a better understanding of real world application. Thanks

It’s basically slow (90 days), expensive (6k), and tedious.

Clarification - The topography survey was for the hydraulic analysis to build in the floodplain and determine cut and fill calculations for site prep. Then an elevation survey performed after development for the LOMC which adjusts the map to account for the improved structure not affected by their mapping data.

The application works in such a way if you are able to submit everything correctly it will be accepted. Document heavy.

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My advise: having owned and operated a mhp in a flood plains where past floods were minimal I THOUGHT my time would be OK… When half of the homes were destroyed and made unlivable by FEMA which also pulled the plaques off the back of the homes where was my monthly income and worst how to involve future home owners into a night mare worst than a tornadoes since every time you have heavy rains you think about what!!! Only a MHP in a flood plain is really BAD BUSINESS since you are gambling with the worst hand never knowing if the next owner wants 14 cap, if one can get a loan from a bank, or the actual experience of losing an income–maybe forever!!!

@carl is right.

This whole thing is about life safety - if you cannot have supreme confidence your tenants can get out of harm’s way during a flood then it’s not a good location to operate.

I doubt there is not much of a business case for major site prep in an MHP… one scenario is the adjacent land is already performing and this would help squeeze in some lots to make it more investment grade, but it would come at a very steep price to do properly.

Thanks to everyone for responding. Of course, I’m not going to buy a park that floods and could be unsafe for tenants, but thanks for the words of caution. I’ve since found out what I needed to know and am moving forward with the purchase.