Get an inspector, identify how hazardous it is and the extent to which it exists, and get a mold remediation company to take care of it.

The seller ended up paying 1k to have it remediated so we could go through with the purchase.

As for new investors, I can even offer some advice that could help remedy the "naïvety" - something that will even help you in your endeavor to invest in regardless of your vehicle of choice! 

If you test, most likely the test will be fine, but if for some small chance it comes back bad, then it becomes a material fact and now you are sol to sell the house without remediation, which will cost you 5k to 25k depending.  

I live 40 miles away, so I called the owner of the biggest plumbing co in the city and he and 2 techs drpped everything to get to the property within 10 minutes of my call.I had put a garage outdoor access remote on the outside of the house.. they couldn't get in thru that because THE POWER WAS NOW OFF.Luckily i had put a coded door knob on the kitchen door that opens to the deck-- i gave them the code and they were inside instantly.The water heater was STILL SPEWING WATER full blast in a stream so strong it was hitting the second story ceiling and hitting the ELECTRICAL PANEL also located in the garage and that's what had knocked out the power .The plumbers immediately turned off the inside water main cutoffand sent me photos of the EMERGENCY SITUATION the pm so calmly let me know about by email an hour earlier.i fired the pm co that instant and got on the phone to start farm (my rental policy ins co) whiledriving an hour to the property.i also called the city's best WATER EMERGENCY REMEDIATION COMpany while en route.When i got there, the water was turned off ( finally)the drywall ceiling had fallen in, the light fixtures destroyed, the garage door open case was HALF FULL OF WATER and there were 1000s of mold blooms on every surface and hundreds of stacks of spiky growing black mold (looked like iron fiilings we used to play with in that game we all had as kids where u use a magnet and drag the iron filings around to put hair and a mustache on the bald guy cartoon photo) the mold spikes were 1.5" tall on the woot railings and stairs going into the house, on all of my beautiful built in wooden garage shelves--- what a mess-- like the streets of Beirut after the bombs went offand I don't have allergies -- but i could not even STAND inside the garage because the WET MOLD MILDEW SMELL was so strong it instantly gagged me and gave me a headache and i couldn't breathe.So here Ewe are on Jan 17 and now i know that the BEST rental dwelling policy dies NOT COVER MOLD REMEDIATION AT ALL ( so far $14,000) but it does cover water damage with a $2500 deductible...

I typically call Gary at valley pest bc he is the cheapest for letters, but one of the homes I helped a client sale used Terminex for mold remediation and were satisfied with them. 

Sounds like these owners took the issue seriously and performed a proper remediation for $40K but you don't know.

We have demo/remediation people there now that insurance company is covering it.We are insured for actual value less depreciation.

The opposite actually, because I'm assuming that there is an issue, and that it will require remediation/correction.

The report also said "Within 120 calendar days, the current legal owner of the property have to provide proof of correcting the violation/ or provide proof that they are working with City of Gardena Officials to remedy the violation."