I bought a house at auction that has mold. What would you do?

[Joey Allison]

Hey guys, I need some help. I bought a house at an auction. There was not access allowed to view the property prior to bidding. After I won the auction, I was walking around the house to get some more ideas on what to do in terms of rehabbing it. At that time the previous owner was there picking up her mail. She told me the interior is overgrown with mold. She sent me pictures. There is mold behind the base boards and between the grout of the tiles. No visible water damage was coming from the bathrooms. Most of the flooring had been removed so there is not much mold left in the floors. The previous owner believes there is a pipe leak in the foundation that is causing the mold growth. We live in the hot Arizona desert so mold is not very common here. I have received pricing to remediate the mold anywhere from $10k from a contractor or to $30k from a restoration company. 

Here are the facts: 

*I purchased the home for $89k.

*It has an ARV of $145k

*the home was built in 1954

*The home is 1,100 sq. Fr

*The renovations is expected to be $20k

*The mold remediation is likely to be $12k (based on a contractor’s opinion for a house of this size)

*I asked for a $20k bid reduction to help as a buffer in case the mold remediation goes over budget. I am waiting on an approval for this price reduction.

*I have not signed a buyer’s contract so I can technically still back out.

My question to you guys is, even if my new asking price is awarded, would you proceed with this investment or would you walk away and find a new investment?

Thank you guys!

[Jim K.]

@Joey Allison

Hi Joey, @Caleb Heimsoth tagged me up because I have some experience with the mold hustle. What @Craig Jeppesen and @Doug McVinua have explained is pretty much all there is to it. You fix the leak, chop your walls open at the bottom to inspect, physical clear out the mold and spray surfaces with chlorine bleach and/or soaking agents (great stuff from homedepot.com) for absorbent surfaces.  Map the ductwork and mist your ducts with bleach. Do mold air quality tests with kits you get from HD or Lowes.

Mold strikes creeping terrors about developmental disabilities and childhood health hazards into the breasts of young mothers. It inspires furious denunciations against racist justice among minority populations. It has created an entire little industry of commercial mold remediation to take care of what has always been part of the human condition.

There was mold in the first caves that humanity took shelter in, mold in the Roman temples, mold in the Gothic cathedrals, mold in the teepees that the Indians erected on the prairies, mold in every camp, settlement, town, village, and city in the history of civilization. Any major health risks of mold are, at best, tenuous and unproven, at worst, wholly alarmist and specious. Look this up on reputable websites, most notably the Centers for Disease Control and Prevention. After that, if you come to the conclusion that for some nefarious reason the CDC and by extension USAMRID is full of bulls*** about the risks of mold, well, you're entitled to your own beliefs. Ain't we all. But understand you're leaving anything resembling the facts of the matter behind.

Fix the leak, chop open the walls, be prepared to redo drywall in places and floor trim, bleach, bleach, bleach, run your air quality tests. It's not rocket science unless you are required by a third party to get a mold remediation company involved. It's a serious hustle for a not-so-serious problem. Once you figure it out, you're going to welcome mold-infested properties as moneymakers for you.