I was at a coffee shop over the weekend and ran into a guy named Dave that I met there several months ago. When we met, he had just gotten interested in real estate investing and was eager to buy his first investment property.
We got to talking and he started telling me about a deal that he almost closed but luckily backed out right before closing.
He contracted a deal and commenced doing his due diligence. Everything looked good . . . until, he got a quote for the insurance on the property. Due to the location, flood insurance was required and the estimates that he got ranged between $3,500 and $6,000. Thus, turning an otherwise good positive cash flow deal into a negative drain.