newbie - mold problem


I am a newbie and this is my first deal.

pp $40k (including closing cost)
ARV $70k
Estimated Repair between 15k to 18k

I had 15 days for due deligence and did inspection, lead testing and got an estimate from the general contractor.

general contractor gave me an estimate of 15k

Lead test was positive and lead abatement contractor came (after the due deligence period was over) and estimate is 18k including lead abatement.

He also pointed out to the mold in the basement and 18 k does not include that. Any suggestion what should I do…

Should I back off from this deal or go ahead…

Thanks in advance for your helpful response

Howdy Tomridge:

Need some more info. How bad is the mold? Perhaps get an estimate to cure the problem if it is that bad. Is it just a clorox issue or do you need the men in white suits? Also what are your financing options and exit strategy. If you are using hard money to do the deal and plan on flipping, the points and interest may be too much to make a profit on this one. If you are keeping as a rental and can get some conventional financing or cash it might make sense depending on the rent.

Thanks for the reply,

Exit will cost me 1500/-

It is a cash deal, I am not getting any financing.

Rents are around $800 - $900

I guess it is a a relatively small area on one of the walls of the basement.

Everybody missed that except the lead abatement guy…

Thanks in Advance

missed some info…

Also the lead abatement guy told me that I need to get the mold specialist to fix it ;

I am not sure of that

Howdy Tomridge:

Cost to cure mold with sponge and gallon of clorox and Kilz $8.99

Cost to hire profession mold white suit guys $ 2500 plus

Your choice

There have been major problems with mold in the past but most are exaggerated problems. If it is just something that is minor then fix it and that is about all you need to do.

I would get some more opinions about the lead paint as well. Most can be covered with a primer and then repainted with latex paint. Complete removal is not really necessary in most cases. Three grand seems very high to do a little extra paint work. What are the conditions of the paint interior, exterior?

all mold is not created equal. if you are really concerned, get a professional mold inspector. I had to get one last year when some tenants threaten to sue me over toxic mold. The testing cost $650 ($400 for the inspector, $250 in testing cost at a lab). The outcome was just regular, plain-jane household mold; nothing special, just they lived like pigs (which I already knew).

So in other words, you got shafted for $650 to be told that the mold concern that your tenants had was their fault?

Any lessons learned out of this one?

I hate slovenly tenants! I have one set that “came with the place”. Nice people, pay on time, just REALLY messy!


This was exactly the case! “came with the place” and always paid on time, nice friendly folks (until the end). The problem was they running around telling every one in town they had toxic mold in their house plus they were in the process of ingheriting a bunch of money (thus spending a lot of time in lawyers offices). Thus, this was to head off a)any potential lawsuits as a result of them shooting off their mouth’s off in the lawyers offices b) rumors of the condition of the place whihc might make it difficult to rent in the future (its in a real small town)

About that time, they got their money they decided they were too good to pay rent any more and gave notice. More over they did not move out! I immediately proceed with eviction and got a judgement and possession of their stuff which I was able to hold hostage until they paid me back rent, storage fees for their junk (i.e. rent onthe place)cleaning fees, etc. In the end, I actually came out about even which is really, really lucky consider everything that went on.

Mike in Calif.

P.S. They were a couple of alcoholics on the gov’t dole. A real pair (man and woman); last heard they moved to some retirement community in Mexico. I bet their new neighbors just love them. ;D