So let’s talk about something real exciting today, FEMA.

In our world of real estate, it primarily refers to property that lies in a flood zone.  I’m sure there are other areas that FEMA overlaps with us real estate investors but flood zones are the topic today.

Our current project is a great example of how FEMA can affect our world.  The rule to know in my case is “If your home lies in a flood zone and your budgeted upgrades add up to more than 50% of the appraised value of the structure (not property), then you must bring the house up to FEMA standards”.  Understand that the 50% value can change town to town.

Things you must know:

  • What is your current appraised value of your structure? Note that tax assessments are typically 70% of the appraised value in our area of CT.
  • What is the percentage of budget allowed for upgrades? (e.g. Norwalk=50%)
  • What is an upgrade? Some repairs are considered maintenance and don’t affect the ratio (e.g. roof, paint etc )

Am I stuck if my budget is over 50%? Not necessarily.  You may have the option of paying for an outside appraisal (it worked in my case!) to challenge the valuation.

This issue slowed down the process but we were able to move forward with our Rehab project without using FEMA standards  (e.g move furnace out of basement, raise the house, fill the basement etc.)

Lessons learned:

  • Don’t freak out if you find out about this too late! In my town, the Planning and Zoning along with the Building Dept. were very helpful throughout the whole permit application process.
  • Fore warned is fore armed. When you go in for your permits, have all your numbers planned.  If needed, get the appraisal done first.
  • Flood zones don’t mean you can ‘t do flips, it just takes a bit more homework.
  • Be honest about your costs and numbers, they may demand documentation (they did for me!).
  • If you do some of the work yourself, you still have to quote fair labor costs on the repairs you do.

Yours in Rehab,


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