If it strengthens and forms into a cat 1 or 2 and hits near Cape Hatteras, NC or anywhere on the outer banks, it will cause a LOT more damage.
Virginia and NC will flood like crazy. I'm already battening down, because I live 2 miles from the James River /Chesapeake Bay area. Flood surges are a big concern.
It shouldn't have much problem regaining cat 2 status before secondary landfall.
There will be no explosive development as we saw in the GOM but it will restrengthen towards 100-115mph IMO. It's really chugging along, we are expecting the storm to start affecting us in CT by late tomorrow night.
Flooding will certainly be a problem further north.