What do you think of a good cash flowing park that is partially in a 100 year flood plain? The homes in those lots are reported to have been raised raised, supported and stated inspected/ approved. Would all this deter you all from pursuing due diligence? Thanks.
It would not be a deal killer until you have better information on the impact of the flood plain and how many lots are effected. Bear in mind that the existence of floodplain, in any property, severely limits your exit strategy and ability to obtain bank debt. If the park is hugely compelling in all other areas, then tie it up and find out the information on the flood plain.
In some states, if homes move out, you will need to have piers that support the home ‘engineered’ in order to place another home into the spot. So just be aware there may be additional costs. Also- Insurance might be very expensive for the homes, park or both. Just me, but one of my first calls would be to mobile insurance agency to discuss they types of coverage you should have, and what the costs would be. Our high insurance areas in Texas cost 3x what comparable parks cost to insure in areas that are less affected by weather. It is quite possible the park is under insured now, so you must rebuild the numbers.
If you care about your tenants please continue to look for a park not in a flood plain. I have experienced the situation and you NEVER KNOW when it WILL happen and once you see the broken hearts you will affirm NEVER to own one!
Frank, Jim, and Carl, thanks for your replies. My search continues for a good park that will fit my bootcamp knowledge and budget… both limited but slowly growing!
Here in NC, a park in Carrboro (Chapel Hill) flooded after 5" fell in two hours. The Town condemned about two dozen homes out of probably 40 or 50 total sites. It wrecked the electrical system and given the size of the roads and the lots, I don’t know how the owners will eventually exit.
What a hit to that NC park and those owners. The more I read and learn re floodplains, the more I do not want to deal with them. Thanks for the info Wbc5, appreciated.
A park in MN was partialy flooded last year. They lost 17 lots which the state will not let them use again unless they build them up. Some tenants abadoned their homes, others are moving their homes out. It did a lot of damage to the asphalt roads. Owner is trying to sell but who would buy it? It was once apraised at $1,000,000 he can’t sell it at $600,000.