BLACK MOLD in Houston, TX Home?! Deal or no Deal?

[Dee W.]

I drove by a vacant home and gave the owner a call. She told me that the home was an owner financed deal so she is not truly the owner although her name is on HCAD as the owner.

She expressed to me that the home had BLACK MOLD since the original owner did not inform her that there was a slow leak in the home.
She also said because of the leak there was water damage to the floor. She was upset since she invested money into the home; about $30,000 worth.

She called a vendor to see how much it would cost her pertaining to the water damage. She was quoted $70,000.

She moved out July 2012 and hasn't been back.

What do you think of the "Black Mold" issue and the cost of water damage?

The home is :

-Ranch Style
-1786 sqft
-Year: 1978
-3b/2bth
-Has ARV of $90,000
-Rents fron $1,025-$1,200
Nice area in Northwest Houston, TX

Your suggestions are appreciated.

[J Scott]

It's an 1800 square foot home. Assuming it doesn't have high-end finishes and being conservative with estimates:

For $3000, you could demo the entire house, including all the sheetrock. For $10,000 (AT MOST) you could have all the studs scrubbed, the house fogged with an anti-microbial agent and then dehumidified. It would then cost about $6000 to have the entire house reinsulated and sheetrocked. Add $2000 for all new trim. For another $4000, you could have the house painted. Add in another $15,000 for all new interior finishes (lighting fixtures, plumbing fixtures, cabinets, countertops, etc).

You now have a completely gutted, remediated and renovated interior for $40,000. Let's say you want to go higher-end with the finishes, double the finishes cost and you're at $55,000.

So, worst case, you could completely renovate the house for $15,000 less than the mold bid.