Duplex Opportunity with Recurring Mold

[MaryAnn Houghton]

We have stumbled across a duplex currently bank owned and on the market. The neighborhood is a little rough but the $29k listed for at first glance makes the property interesting. We are pretty sure that we can get the price down to $20k ish (if not lower) and could rent it in the $500/unit/month range. This is in a smaller town where everyone knows everyone elses business. So we know some of the history on this duplex.

The duplex was built on a slab and not properly insulated (between the home and the slab). There is a cronic problem with mold in the house that is believed to be sourced from the condensation between the slab and the home when it is occupied in the winter time. Multiple previous owners, when they decided to sell would paint over the mold so the mold would be more difficult to detect.

We know that the duplex has been through the sherrif sale process, still belongs to the bank and sits empty. We have not had an opportunity to go in ourselves or have our team take a look at it yet so we don't know the true condition of the home or if the mold truly is still an issue.

In looking at the boards, it looks like mold is something that, when remediated correctly, is something that can be delt with. At what point though do you determine that the deal is not worth it? If we play our cards right, we think we may be able to knock the price down significantly further due to the mold issue.

To make it even more interesting, the same bank owns a second duplex of the same vintage and floor plan 2 doors down. This second duplex is not on the market yet though. It is probable due to the similarities that this second duplex may have the same mold issues.

Any thoughts, suggestions and red flags would greatly be appreciated.