Hi,
I'm interested in doing a flip on a HUD ranch home where the HUD appraiser wrote in the Listing Disclosures and Repairs Statement the following, "Other - Mold-like substance inspection is recommended."
You could smell mold in the unfinished basement and upstairs, although the door leading to the basement is missing. The basement does have a little moisture on the concrete floor but not much. And, I'm not sure of the source. However, the upstairs is dry and doesn't show any mold or indications of moisture, either currently or previously. And, frankly, the mold isn't visible, even in the basement. So, in my opinion, it's not serious. And, although I'm not sure how long it's been vacant, it is winterized (so it's probably been at least 6 months.)
So, I'm interested in knowing if others agree with my take on this.
Basically, that one statement from the appraiser (above) will lower my offer by approximately $15K. Why? First, because now I feel the need to lower my ARV from $165K to $155K (to adjust for the many potential buyers that will never consider my rehabbed property after HUD has disclosed the possibility of mold findings, regardless of how well of a job I do remediating it.) And, second, even though the damage is not extensive, now that it's disclosed that there's the possibility of mold, it needs to be done by a certified mold abatement contractor, which in my area will tack on at least another $5K.
So, what's the best way to approach this (since I know HUD doesn't return your deposit)? Do I go ahead and play it save and lower my ARV by $15K? Or, put in an offer using a higher ARV w/ a contingency based on mold inspection results?
I'm in an extremely competitive market and if I play it safe probably won't even get considered.
Thoughts?
Matt
