Mold house! Flip or Flipflop?

Question

Looking to get my feet wet on a possible flip.  Currently its asking price is 50k, value to comps in the area 100-115k. 2,000sq ft home. 3 bed 2full bath.  Basically if it were only construction I would have bought it.  However after talking with multiple mold specialists it can run 1k-35k just for clean up and if that is the case I figured another 20k in construction costs.  So I plan to bid 20k and see if they bite.  My question to any flippers out there are my numbers too low in what it would cost to repair the home?  Any one ever bought a home with mold?  Horror stories are definitely welcome and any advice.  Thanks for your reply's.

J Scott · Answer

Ultimately, assuming you were planning to paint and replace the flooring anyway, you're going to be paying for the following extra stuff related to remediating the mold:

- Remove any sheetrock that got wet
- Remediate the mold behind the sheetrock
- Perform air quality test(s)
- Replace the sheetrock

Removing the sheetrock from the entire 2000 sf house probably wouldn't cost more than $3000.  Remediating (by hand) the entire structure probably wouldn't cost more than $6000.  The AQT should be no more than $500.  And replacing the sheetrock for the entire structure probably wouldn't cost more than $5000.

That would be a total of an extra $14,500 for the project.

Those are the worst case numbers in my experience (you can spend more if you want to, of course :).

In reality, you're probably looking at 1/3 to 1/2 of that, even if there is substantial damage on the first floor.  For what it's worth, we had the extra same issue last month (burst water heater on the second floor) that resulted in us doing the following to most of the first floor and about half of the second floor (total of about 1000 sf of sheetrock removed):

Here is what it cost us (this is the whole project):

The extra work due to the mold was about $5000.

Patrick Snyder · Answer

Mold doesn't scare me at all.  In fact, I prefer houses with this issues and it is almost always easy to solve and people are scared of it.  I agree that you want an assessment regarding the cost to remedy, but beware of scare tactics and do some of your own research, because it could save you a ton of money.

Steve Babiak · Answer

I think paint might add a bit, even if you're planning on painting already - because fresh drywall needs more paint compared to already painted drywall.

Chris Masons · Answer

Hi Lane,

DOesn't sound like the mold should be a major issue especially if you are doin gother rehabbing anyway.

Best thing to do is get a mold company in so they can see it for themselves and give you a more accurate bid.

As others have stated don't be afraid of a little mold it can usually be remediated for less than you may initially think.

good luck,
Chris

Lane Ewert · Answer

thanks guys for all your replys.  We didn't get the house.  However thanks to this awesome website I won't fear the mold!  Thanks again for your replys

James Vermillion · Answer

Lane Ewert, I have received loans on rehabs with mold damage.  The loan was not specifically for the mold, but for the entire rehab, so it is certainly possible.  We work with several local banks, so that might be a good starting point for you...they seem to have more options available than the huge banks.

Lane Ewert · Answer

ps. Is it possible to get a loan for the repairs and clean up? I know some lenders don't allow loans on mold and termite houses.

Lane Ewert · Answer

Chris,

From what it looks like the 2nd floor bathroom under the floor pipe burst (80's copper yeah!) Filling up the wall in the kitchen then after a hole was punched through filling the bottom floor 6-10 inches (water stains on the wall and visible mold on the baseboards, cabnits) The carpet is now dry so I have no idea how long the water was sitting. I have not gotten an estimate done from a mold inspector yet.  I only have 60k and its a cash only buy.  So far that's what I know of it.  I'm wondering if to even have an inspection done as to the possible extent of the damage.  I know its all speculation at this point. Thanks

James Vermillion · Answer

I would actually get the mold specialists in the house to get a couple real quotes.  Mold remediation costs can be very difficult to estimate based on some of the things Chris brought up (type, severity, location, etc)...so there is no way to tell how much to pay for the property unless you have a good estimate on the price to fix the mold problems.

I have been able to snag a couple good deals because of mold problems, but only after I knew the approximate cost for a solution.

Chris Masons · Answer

How extensive is the Mold condition? Is it basement mold, attic mold. or throughout the living space?

I'd say the answer depends on how bad it is. Are you estimates based on just speaking to them or did they come to the house and give you that estimate after seeing the mold?

Mold can be grossly misjudged or overstated if done by a dishonest company.

regards,
Chris

Mold house! Flip or Flipflop?

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