Bank Owned House W/ Mold - Should I Go Ahead
I've found a house with a FMV of at least $245 (maybe much greater as neighboring houses are valued at $329-399). It has been listed for almost a year. Price started at $239 and has dropped to $189. I would offer much lower. It has a basement with den, bedroom, bath, and laundry room (there is also a Sauna). There is mold growing on all the wood painted surfaces and bathrooms surfaces downstairs. Should I run from this? How easy is it to fix and how do I determine the cost to remedy this problem? The house has great potential, but I don't want to get in over my head. Can an inspector tell me the source of the mold or why it is happening? Thanks!
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Hi Laura,
I don't find mold to be all that scary generally. That said, since you are new to this I would get several "reputable" contractors to give me a bid on what they think it would take to solve the problem. I would say "it is inadequate venting" from my view of 3000 miles away
Get someone else in the boat with you, an inspector may or may not know what to do here. That depends on your states requirements for home inspection and the experience of the inspector. I th ink the same would be accomplished for free by getting three bids from local contractors who would actually fix the problem
Hi Laura
I saw a show on court tv about a mold that was deadly and they had to condem the house, with that said I would find out what kind of mold it is before I would think about putting a bid on that house
Michael
Don't be afraid of mold! Just make sure you know what you are getting into and you fix the problem. You certainly cannot half ass the rehab.
Nice to met you Laura,
Mold is THE problem and you have to remedy it if you want to sell the house retail or rent/lease to hold on to it. It is a type of fungi that will continue to spread even if you use Kiltz (or other) primers and stain blocker, which some use for temporally relief. If your tenants get seek, guess who is liable?
I do not wish to scare you but you have to evaluate your knowledge and resources because for most of the regular people, cutting walls open is not a joke job they take easily. if you are one of them, you'll have to do exactly that. Unless there is a new miracle I didn't heard of...
Good Luck!
Hi there....mold is a major issue here in NJ...i got out ot 2 deals in a retirement community where mold was found in the crawl space....home inspection (a must have) picked it up....then a mold inspection ($250.00 a guy in white suit and respirator) takes a tape smple and sends it out to a lab for analysis....comes back with 5 different molds including penicillian(sp)...the dangerous kind...so gfar i am in for $500+ on inspections....remidiation company says....whit suits and respirators...rip out all insulation in crawl space....hiiks up dehumidifiers to vents in crawl and fans for 72 hours...checks with moisture meters....treats mold with chemicals...reinstalls insulation...puts in power vents...charges 4 to 5K$$$$...all his for a 1400 sq ft house....i ran, once the inspection detects mold the seller must now disclose...don't make the problem yours...warranty 1 year for mold...it will come back
I went through this issue last year. Fortunately, it just so happened that one of our best friends had been an inspetor whith the state for several years in regards to mold. We even had the toxic black mold in addition to the most likely green mold you saw throughout the house. Basically, he said not to worry. He said that basically you stop any leaks,tear out and replace anything with black mold after you kill it,or simply clean up the green mold. He said that it was common to have green mold on many surfaces in a house that has been sitting vacant, especially in the south. Putting down plastic in the crawlspace and making sure the gutters are clean along with a little ventilation should take care of it.
I just looked at a possible rehab with a mold problem too. In fact, I looked at the house the day after that show on court TV about toxic mold (scary!). Anyway, I thought that just about everything in the house was fixable but when it came to the mold I just felt I had to walk away from it as a possibility. A little mold is one thing but they had let this one go so far that walls and floors were rotting. Everything would have had to be removed down to the studs and maybe that would not have been enough. It's really too bad. The house would have been great to rehab otherwise. Nice brick exterior, leaded glass windows etc. The mold problem was just too much to handle. Not only because of the work but more importantly the liability involved if someone would get ill from it down the road. It's too bad that there isn't some better or easier way to deal with this problem.
Laura,
Mold=humidity=leak or poor ventilation.
Sauna and laundry room in the basement...hmmm...
Seems to me pretty well localized and as to cause...I'd know where to start looking.
Make an offer at 125K subject to mold inspection.
My experience is that there won't be many buyers competing with you.
The types of mold the Inspection uncovers will determine your rehab costs.
Toxic mold means you have to gut the basement and replace almost everything there. I bet you may find a combination of leaks, poor drainage and insufficient exhaust i.e.ventilation there.
There's a bill for remediation, gutting the place perhaps and replacing drywall and wood.
The last 2 you can cost out.
Fixing the mold problem could run you anywhere from 1K (with non-toxic molds) if you do most of the cleanup yourself, to 3K if thoroughly done by outsiders in the funny suits.
And then you add on the rehab expenses.
I'd start with the Offer, the Inspection and take it from there.
If you buy it right, you'll be fine.
Just my thoughts on the subject.
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Maybe I'm somewhat reckless, but I have owned property in Florida for 32 years (as many as 55 properties at a time) and there has always been a moisture, mildew, mold problem here. The lawyers and insurance companies didn't just discover it. It's nothing we couldn't handle with a good brush, face masks, and lots of chlorine bleach. With caution, ventilation, proper spray equipment, and persistence should solve the problem. Now of course, if you listen to the "mold-spurts" and "fun-guys" you wouldn't touch it with the proverbial pole, but I say, "go for it". There is a lot of equity being sacrificed there for something a little bit of elbow grease wouldn't solve. Mold is the present day buzz word that puts the insurance industry into a tailspin thanks to a bunch of barracuda lawyers who capitalized on a few cases (in Texas?) against Allstate & won millions for their clients. Not saying that's so bad, cause I'm no great lover of the insurance moguls. They certainly get their pound of flesh from all of us. Just take this fad with a grain of salt and go for the opportunity to make some good money.
..........For what it;s worth.................
Hi Laura,
I thought I would put in my 2 cents. I am a contractor and do Rehabs. I love to hear the word mold, because as most people said above they all run. This immediately limits the pool of people you are dealing with. Also, banks fear the word mold and believe they are going to be stuck with a white elephant. There is a simple solution to this. First, go to your local hardware store, Home Depot, etc. and find a product called TSP(Tri-Sodium Phosphate). While you are there pickup as many respirator masks as you need. With the masks don't go cheap because you are protecting your lungs. Good masks are between $20 - $25. Then go out and rent a commercial air scrubber, about $100-$150 for 2 - 3 days. Then go back to the property and mix 3 qts of water, 1 qt of bleach and 2 cups of TSP. With this mixture you can either spray it on or paint brush it on. Spraying is much faster. Also, with this mixture all you need to tear out is the drywall and insulation. Do not tear out the studs or wood. Spray on the mixture so the wood is saturated and on the walls and let it run down. This way it will go into the cracks you can't get at. You do not have to rinse this mixture off. Just let it sit overnight and come back and the wood will look like new and the mold will all be gone. Have the the inspector come visit in 2 days so all the wood is dry by then and you are set. Then start putting up drywall and enjoy your profits. Start the air scrubber when you start spraying and let it run for 2-3 days. Also, I would start the bidding with the bank at about $100,000 as I said before it has been empty for a while and they are probably worried now of being stuck with this property. Good Luck!
Thanks for all the advice. I made my offer contigent on accepting the mold inspection. Since it's bank owned and today is a holiday I guess I won't hear back until Tuesday. Waiting on pins and needles hoping they'll accept my offer.
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