PANAMA CITY, Fla.—After Hurricane Michael swept over the Florida Panhandle last October, destroying thousands of homes and taking dozens of lives, David Dey started looking for property to buy.

The Lakeland, Fla.-based real-estate investor had been part of a group that flipped hundreds of damaged homes in and around New Orleans after Hurricane Katrina deluged the city in 2005. He bought flood-damaged homes in Houston after Hurricane Harvey in 2017. The destruction he saw in Panama City, Fla., was worse.

Within...