Frustrated with first investment property

[Scott Po]

I bought a property in 2023 that I have been "fixing" this entire time. I have less than $12k in renovations in the property and $90k in equity because of creative financing. With the end in sight, I started seeing a few quarter size mold spots in the carpet of the basement that was finished when I bought the property. There is no vapor barrier down there and my neighbor recently had a french drain put in. I'm thinking my basement (1100 sq ft) is going to be an issue. There is a sump pump. The basement did flood before I bought the property and before the basement was finished but I was told that was due to a sump pump malfunction that has been rectified.

My question is do I just gut the whole basement so it's not a problem? Or is there a remedy for basements that doesn't involve a new (correct) renovation? Gutting it would put me at an 1100 sq foot 3/1 house and I'd loose my equity bringing me down to breakeven. 

Some Details:

4bd/2ba (3/1 upstairs and 1/1 downstairs)

2,200 sq ft (1,100 upstairs/ 1,100 downstairs)

Value: $410,000

Equity: $90,000

Interest rate: 2.2%

Potential rent as a 4/2 (per a local property manager): $2,900 x month

Mortgage: $1,900

[John Annunziata]

Don’t gut yet — diagnose first. Get a moisture/mold inspection to find the source (grading, sump, or humidity). Pull the carpet, add a dehumidifier, and check sump performance. Most basement mold issues come from poor drainage or high relative humidity, not full contamination. If moisture readings stay high after fixes, then consider an interior drain or partial demo. Keep that 4/2 layout if possible — losing the basement could kill rent and equity. Solve the cause before tearing out finishes.