I Found A Potentially Good Deal, But....
I've located some property in Texas, the as-is value is $70k, the asking price is 49k but will accept a reduction in the price. Neighborhood comps show an ARV of 90-99k. There's strucural work that needs to be done, some light cosmetics, the inside has harwood floors throughout, it's a beautiful 3/2 in a middle class area. There's a notice that states "evidence of mold not remediated". I'm not sure about what that means. Is that something I can deal with on a hard money loan or what? Just being safe not sorry. 
The last few years the mold issue has crept into the housing industry. When it comes to mold I don't worry too much if the house doesn't have a basement where the constant dampness can be an issue hard to permanently treat I don't worry about it too much. But a wet basement is a breading ground for mold.
There are some products out there designed to effectively treat mold. I haven't tried any since I don't get into properties with extensive mold problems. Maybe others can give a product review of some of them.
Q
If you never rehabbed a house before you do not need to start with cheep one that have structural damages and mold. On the low $ value house, high dollar remodeling job may tie your resource up for to long. Do remember, you intend to borrow hard money ant high interest and points cost can eat into the profit quiet fast so get several estimates before you commit yourself to buying it. Or even better, think about flipping it wholesale. This may earn you some money in the short period of time while you let someone more experienced do the job. And if you mage to do so, stop by that house from time to time to see how the remodeling progresses. You might gain some experience on someone else's time and money.
A house with mold issues can be tricky even for the experienced investor.
Where there's mold, there usually is a moisture problem.
So you've got to find the source, and determine whether you can deal with it effectively.
There are many types of mold; some are very dangerous and require special handling if you want to remove them.
Now you're talking big bills.
See if you can get more info on what the exact mold issue is, and what it takes to deal with it.
Also remember that even if you are able to succesfully remove the mold, you must always disclose to the buyer.
Mold usually is a tough one.
Just my 5 cents worth.
[addsig]
It's a HUD home, so how do I go about finding those issues out?
[addsig]
Are you sure you want to do this?
Here's a way.
First ask the Listing Agent for more details.
Regardless of what you hear there, you will want to do an inspection. You either pay a mold expert to pull samples and have them tested, or you do it yourself.
There's quite a few labs who can run the tests for you.
When you know what's there you can decide whether you want to deal with it yourself or have it done.
Big difference in costs, so beware.
Can be done, but you've got to know your stuff.
No pain, no gain.
[addsig]
There is a link to a state of Minnesota site that explains one process to remove mold. I found it by conducting a search on "dogpile".
Using the following search terms
"evidence of mold" treatment cost
Keep in mind when making an offer on a house that drywall may have to be removed and replaced, painted ect. . Wood might have to be replaced. Certainly the source of the moisture needs to be controlled.
Use this to your advantage in a negotiation. As "proof" that you can only offer say... $32,000 for the property, you may want to write up a report explaning the major expense this problem will involve. This is a technique commonly used by buyers when "short selling" a property. If you can sell how expensive the problem is and then get it fixed for a lot less. You'll make money.
Mold problems scare a lot of people away. (As it should)
If you've never been involved in rehab... know this... it will take you two or three times longer than you think and cost two or three times what you think.
By the way bleach is the secret ingredient for killing mold. There is also foggers available that is used in air-duct sanitation. There are special chemicals out there, that from a noxious vapor point of view, are much safer to use.[ Edited by bigideas on Date 02/05/2004 ]
Isn't the disclosing of mold a state to stat issue? I know on the NC Property DIsclosure forms mold isn't one of the items needed to disclose. HUD, being a "National" body discloses that on their homes to CYA. Heck, every house has "mold" in it, just leave some bread out for few days and see what happens...
Q
I would always disclose mold! or any uncured defect as this may save you $$ later on in court and "caveat emptor" applies.
Mold in my opinion is "no big deal" not hard to fix, or remedy. It is however an expensive one if you are not set up for it and haven't had any experience with it in the past due to the "time' involved. bleach will kill almost anything including you I generally remove the sheetrock and use an ionizer to kill loose spres in the house.
Obviously there has been a home inspection done in the past and I think you could get access to that through your agent.
If this is your first remodel don't write this one off, get someone in the boat with you (contractor) and make an offer accordingly.