Debjit Saha, co-founder and investment expert at HomeAbroad, said many investors didn’t account for this type of risk.
“This data reveals a hidden dependency most investors never calculated into their risk models,” Saha said. “Smart money is already pivoting, cash buyers are negotiating 5-10% discounts on stalled deals, while sellers with failed contracts are offering creative financing. Private flood insurance costs 20-40% more but keeps deals alive. Investors should map their portfolio’s NFIP exposure immediately and prepare for extended market disruption.”
White noted that while private flood insurance is an option, at best, it’s going to be significantly more expensive, and at worst, it might kill a deal.
“They can’t qualify (for the loan),” White said. “Imagine that Joe gets on there, and we’ve got a flood insurance quoted at $2,000, and you’ve got a 46% debt ratio. And next thing you know, it’s $6,000, you just blew their debt ratio and their qualifying ability out of the water. So they can’t qualify.”
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