I've been watching HUD homes in my area and there is one in particular that has caught my eye. It is a 2/1 SFH in a nice neighborhood. The list price is 69,900 which is significantly cheaper than what homes even that size go for in the area. Projected rent would be conservatively $900/month.
What worries me is that it has been on the market for 88 days (most HUDs have been selling in 45 days or less here) and I heard second-hand that there was a mold problem. Would you even touch a moldy house, and if so what kind of discount would you require to even look at it?
I heard that what ever the price to take care of the mold HUD will give that in discount.
..Greater the problem, greater the discount. Have company in the mold removing business estimate the removal, or depending on the condition of the mold, get some bleach and mix it with water, remove it yourself, then bill HUD or saw why you are discounting the price greatly.
The most important question is why is there mold?
If a previous idiot vented a dryer inside, or ignored a leak or its because a wet basement, or something that you are reasonably be sure can be corrected, then put an offer minus the cost to fix it.
Not a buff on the climate in CO, but a big exhaust fan and some mold spray or bleach might be enough.
It really depends how extensive the mold is. If it is minor and it is evident that it is confined to one area, it might be something fine to tackle.
We toured a home that was going up for online auction that had a mold problem. Seemed that the unfinished old basement had flooded and the home had been vacant for a long time. With the heat of the summer it became a breading ground for all kinds of mold. There were several kinds of mold in the basement, some black mold on a few of the walls in the main living space, and the attic was full of another kind. Although I loved the home and it was in a great area, we passed... just too much to tackle and not worth the expense. Even if we hired help for the mold and did the rest ourselves, there wasn't money left to make. That was last summer... it still sits empty today.
@AJ Romero I actually just went through this very thing, I put an offer in on a HUD home. It was accepted, I went through and had the property inspected and my inspector found a lot of mold in the basement. He then went on and found the cause of it, a crack in the foundation behind a finished wall was causing water to pour into the basement when it was raining. The house had been sitting for 10 months and the mold just built up. I had accounted for some mold removal in my cost, but not a complete gut and removal of the finished basement plus the foundation repair. With the additional cost the numbers didn't work for me so I passed. So my advice is if you are concerned get an inspection. It was $300 well spent IMO.
@Matt Inman beside $300 for inspections
Did you also lose Hud earnest money ?
What was the estimated cost to remove the mold ?
Yikes. It looks like someone outbid me for this one. Oh well ;) Now I know it isn't that huge of an issue. Mold usually isn't a huge problem out here -- and where I live is even drier than the Denver metro area. Prayers to the folks dealing with the flooding up north.
Mold can kill you if in excess. It will cost a fortune if it's in the walls, attic, basement. The people have to wear haz mat suits and respirators.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing