I know there have been quite a few threads on parks in floodways, but I’m still trying to get my head around this. I found a park in a tier 1 MSA in Texas that the owner wants to sell, but half of the park is in Zone AE, which is considered a Regulatory Floodway, and the other half is in Zone A. There are only 2 homes not in the floodway on the current map. I’ve called the businesses in front of the park to see if they’ve ever seen or heard of it flooding, and they said they haven’t; however, if you look at the FEMA flood map it looks scary.
There are 31 occupied lots. Rents are at $200 and can easily go up to $350. It’s on city sewer and city water, and it’s in a prime location in the town.
My main question is would anyone even put offer on this thing, i.e. 50% of occupancy at a 10 cap, or is it even worth messing with? I keep going back and forth thinking if I get it at a really good price that would outweigh the risks associated with it being in a floodplain.
I had a client in Ohio with a similar problem. He was able to get a lender for a first mortgage on the park. The underwriting was done without the income from the few sites in the floodway. He was able to get a waiver from the residents on the floodway sites for a negotiated decrease in their site rent. The mortgage isn’t as much as it would have been if the sites weren’t in the floodway but he was happy that he could purchase it.
Frank always talks about BFE , but I’ve never seen how many feet that the BFE actually is . I don’t think it’s on the FEMA map , is it ? I saw one in a great Central location . I wonder if it’s the same one ? LOL . I was a little afraid that there wasn’t an exit strategy . This one also had gravel roads and I thought it was wierd that maybe the damp conditions , chronically , just tore up the roads. I 'd love to hear some educated thoughts on this .