Mold!

[Allen Grant]

I am currently looking into a freddie mac foreclosure.  The home was built in 1990 and is in good condition except for the fact the home had a water leak and now has an extensive mold issue.  The trim along the floor in most of the rooms has mold as well as extensively on the kitchen cupboards.  The Realtor advised that they were getting bids on cleaning up the mold.  I am aware of the repair work that will be needed, but I have never had mold involved in a transaction.  Are there any other parts of the purchase/sale that will be complicated by the fact the home had a mold problem?  This is a lake home in a desirable location, and I believe it would sell well as a fix and flip.  Can anyone offer advise on the mold issue?  Also, I would be utilizing a hard money lender.  Thanks

[Ann Bellamy]

The biggest issue I see is that the mold may be more extensive than you think.  If it's on all the trim and the kitchen cabinets, it's a good bet it's in the walls and ceilings, including the wood framing.  

Mold is just writing a check, the problem is the check might be bigger than you think, because even if they get estimates, they won't really know until they start opening things up.  

Your hard money lender will care that either

1.  You budget enough to cover a more extensive issue that you think, or

2.  You have the funds to pay for a more extensive problem than you think, or

3.  Both.  

You will need to get a pro to do it, because you need to be able to document that it was properly done for your end buyer and that there is a guarantee.  Use a different company to perform the test after remediation than the one that did the work.  Test before you close up the walls.  If you get a guarantee, you can have them fix the problem before you close up the walls.