Investors:

Those of you doing your research in the Go Zone or MDA Small Rental Assistance designated areas, please be sure to do your due diligence. One thing I am seeing every day are the calls that I receive asking what the difference is between my construction model and others. Well, if you are building on slab built construction in Bayside Park or anywhere south of the Interstate in Mississippi Preconstruction or New construction areas, then that is enough said.

The Advised Base Flood Elevation is the recommended height above sea level that your "Base Floor" should be, in other words, your floor trusses. This cannot be achieved on slab unless you take a 5 foot pile of dirt and mound the property. Don't fall for builders telling you that they bring in extra fill dirt to the site. Duh!! That is required by code to be at least 17 inches above the street anyway...This STILL does not comply with the ABFE. This has been known by developers since last year. Most are concerned that when it is adopted and the word "Advised" is replaced with "Required" their business will drop off. This is only because the cost of framing labor and material will go thru the roof for them.

We achieve this the easy way by using modular construction in the MDA SRAP or Go Zone Preconstruction areas. We do not incur that price increase. We actually save..And the money we save goes toward the extra dollars for the raised foundation.

Hancock County is the last county to adopt this and it is likely that it will be final in October. I spoke to TWO of the top insurance underwriters on the coast on May 7, 2008. They said that homes on slab are not going to be able to get the discounted flood policy, nor will they be able to renew their current policies. They will be required to take the high-risk policy which is something you want to avoid at all costs. Too late for those people. Here is the worse part. So even if your home is on slab, what is an extra $500 per year, right? Well being that we will have a $250 approximate reduction, that is a $750 a year swing in cash flow. Even worse is that when you apply your exit strategy and the buyer of your home applies for a mortgage where the lender makes closing contingent on wind/fire/flood coverage, that is the deal breaker. No way will they want to take the high-risk policy. Chances are they will find another house compliant to the ABFE and pay a lesser premium by $750 annually. There is no doubt that this will happen. That leaves the investor with slab built construction STUCK.

I am embarrassed by my peers and builders out there that are building on slab. They know this is coming. What they are doing is trying to make the sale and make money off construction. Once the home is done, it is out of their hands. Now it's YOUR problem. Do you think they care? Probably not. You won't even truly notice this until you go to sell because when your premium goes up next year, they will tell you that this is universal...Bull_ _ _!

In conclusion, do not build on slab. Talk to us and ask us the pros and cons.

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