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!