As far as reselling the property it's definetly a high risk given the fact that there are many other properties available to buyers. A full disclosure would be needed, an unless the property is at a huge discount most buyers would stay away from it. Goodluck .
what are you missing before you buy it? is there a disclosure? what is your inspector finding as you will be required to disclose that inspection? what caused the water damage? what are the odds of it happening again? Is there mold? how are comparably damaged properties selling in terms of value and time? what's the margin?........
Do your homework
If the property is in a flood zone (or likely to be in a flood zone in the future), then anyone trying to buy the home from you in the future and finance their purchase, will be required to take out flood insurance, which is very costly. This, added to their mortgage payments, may make this an unattractive property to purchase. I would be very wary about buying any properties in flood zones for this reason. Additionally, if the home has previously been flooded, it is possible that the structural integrity of the home has been severely compromised. The force of moving water, even if only a foot or two in depth, should not be under estimated and can cause lateral movement of a home's frame from its foundations and weaken the attachments.
Finally, when you come to re-sell the property, you will be required to disclose any previous damages to the property caused by flooding or other water damage. This is likely to deter potential buyers and may result in you obtaining a lower resale price than otherwise could be obtained.
I know some of these â€˜water damagedâ€™ homes have seemingly very attractive prices, but there are good reasons why the Sellers are seeking to sell these â€˜as isâ€™ and why the prices are sometimes listed so low. My best advice is that you retain a Realtor experienced in advising clients on investment properties and preferably one who is also an investor themselves, and who have experience in these matters. If you would like my help, I would certainly be interested in discussing this further with you.