Apartment with mold??

Apartment with mold??

Rental Property Investor · Cypress, CA · Member since 2013 · 103 posts · 72 votes

Hey BP,

I'm considering a MF investment in the Ohio area that has pretty solid bones and good potential.  It's townhouse style garden apartments, 2bd 1ba in a C+/B- area.  Definitely not war zone, but lower working class neighborhood.  I found out that some of the buildings had leaking roofs in the past which caused some molds in ceilings and walls and basements of a lot of the units.  The roofs have been fixed since, but I'm trying to see what this will do for my eligibility to get covered for insurance, to qualify for a loan, and also how much resale value is affected?  Is this a big can of worms for potential liability, too?  Obviously, an inspection is required and there are different degrees, but I want to know if this is generally a big red flag that's going to be a massive headache in the future.  What's your experience?  Do I have to immediately address all mold issues before qualifying for loan/insurance, etc?  The issue is that it spans across many units as the units share walls and ceilings.  fixing the issue for all affected units sounds like a big project. 

Thanks.

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Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
7y

@Ki Lee -  This can range from no big deal, to F*$K, my deal is dead.

1.) Identify where the moisture/humidity is coming from.

2.) Find out how much mold growth there actually is.  You normally have to remove 4ft of drywall & insulation in all directions from where mold is found.

It's no big deal if you can  eliminate the water intrusion, cut out the sheetrock, and replace it.   It becomes a nightmare if you have to hire professional mold remediation companies, because most of the time they have the gut the house.  Now you have to pay them to gut it, treat it for mold, AND you get to start building it new.  

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    7y

    @Ki Lee sounds like there could be mold that can't be seen by a casual observer. People get sick from mold and landlords can get sued. I would definitely have it professionally inspected and go from there.

  • Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Ki Lee -  This can range from no big deal, to F*$K, my deal is dead.

    1.) Identify where the moisture/humidity is coming from.

    2.) Find out how much mold growth there actually is.  You normally have to remove 4ft of drywall & insulation in all directions from where mold is found.

    It's no big deal if you can  eliminate the water intrusion, cut out the sheetrock, and replace it.   It becomes a nightmare if you have to hire professional mold remediation companies, because most of the time they have the gut the house.  Now you have to pay them to gut it, treat it for mold, AND you get to start building it new.  

  • Rental Property Investor · Cypress, CA · Member since 2013 · 103 posts · 72 votes
    7y

    @Michael Ablan, @Bjorn Ahlblad thanks for the input.  Just put in an offer.  Will update .

  • Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
    7y

    @Ki Lee sounds like this an issue the seller needs to address immediately. Once the inspection report comes back the lender will make the call to fund or not to fund. If they don't fund you still may be able to take the deal with bridge debt, but I guess the ultimate question is-is the risk really worth it?

  • Contractor · Coachella Valley, CA · Member since 2017 · 252 posts · 176 votes
    7y

    @Ki Lee

    @Michael Ablan Hit the nail on the head with his response.  The two tests I would also recommend would be bulk sample testing (IE swap testing on visible mold) and spore trap testing (IE IAQ testing).  The mold industry is built greatly around fear.  With that being said I will reiterate what Michael said "This can range from no big deal, to F*$K, my deal is dead." depending on the results of inspections and testing results.

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