This $17k house won't Sell! What's wrong with it!

24 Replies

Hello BP,

I'm looking to start investing out of my state and came across this REO house in NC. It's been on the market forever and the price keeps going down. I don't know what's wrong with it. Based on the pictures, there is mold in the basement. The rest of the house seems doesn't seem to be too bad. What is wrong with this house and why hasn't anyone jumped on it? The area seems to be okay. I've checked the local paper in the town and it seems to be doing okay. I also searched the address to see if a murder or something crazy like that happened in the house. Came up with nothing! Was there a meth lab? I just don't know. I'm just tempted to purchase it because it's so low. It's a five bedroom, two bath SFH with about 2400 sq. ft. Might it be a good buy and hold? The rents in the area for this size of a house would be about $850 a month. Your thoughts?

403 S Watts St, Williamston, North Carolina

403 S Watts St, Williamston, North Carolina

403 S Watts St, Williamston, North Carolina

Hi Tasha, Have you gone to see the house? Sorry, I can not see the pictures, so not sure if you took them. There might be some damage that can not be seen in the pictures. What are the houses around there selling for?

@Tasha Mckoy  if it were in my area of investment I might take it at that price, but only after finding out why the mold is so extensive. There is a serious moisture problem that needs to be fixed. I would not buy it out of state without good resources in place already. This is not a paint and carpet rehab, this is a serious amount of work for a professional crew.

@Tasha Mckoy

I would not buy the property unseen. It would be worth the investment to have a mold remediation company & title search preformed prior to Making an offer.. Their is a reason its still on the market..  

Those pictures might not be current.  It might burned out at this point.  It might be in a redevelopment zone or path of a new road or highway. It might have a huge title flaw or senior lien. Tons of reasons  Why not call the agent and ask what's going on with it? 

So you guys think I should pay for an inspection and a mold company before I put in an offer?

Originally posted by Kristine Marie Poe:

Those pictures might not be current.  It might burned out at this point.  It might be in a redevelopment zone or path of a new road or highway. It might have a huge title flaw or senior lien. Tons of reasons  Why not call the agent and ask what's going on with it? 

 I called the agent and she said the sump pump was ineffective causing the house to flood, thus the mold.

Originally posted by @Tasha Mckoy :
So you guys think I should pay for an inspection and a mold company before I put in an offer?

Do you have a team in place there?

Originally posted by @Walt Payne :
Originally posted by @Tasha Mckoy:
So you guys think I should pay for an inspection and a mold company before I put in an offer?

Do you have a team in place there?

  No, not any personal team down there. I would be hiring professional.

DO NOT BUY! I would be willing to bet its a huge hugeHUGE problem with moisture. How far are you from NC? I am sure for a fee you could get and agent/contractor to go check it out , call who has it listed and ask them what they know. In our state we are required to disclose( nc&sc)

Originally posted by @Tasha Mckoy :
Originally posted by @K. Marie Poe:

Those pictures might not be current.  It might burned out at this point.  It might be in a redevelopment zone or path of a new road or highway. It might have a huge title flaw or senior lien. Tons of reasons  Why not call the agent and ask what's going on with it? 

 I called the agent and she said the sump pump was ineffective causing the house to flood, thus the mold.

Did the agent indicate that mold damage is the reason it isn't selling? If so, be mindful that it may be more than the basement that's affected.  Houses that sit closed up with flooding in the basement for long periods of time can have all kinds of drywall damage and warping subfloors etc.  Flooding can do a number on electrical and the furnace too.

Find out if it is a full in-ground basement. I am in the Charlotte NC area and basements in this region are usually day lighted because how bad the soil here is for drainage. From the looks of the middle picture it is not. You will NEVER get rid of the issue unless you put costly drains around the foundation to drain off excess water properly.

@Tasha Mckoy  I think you have some wonderful advice already given here.

  I a definitely suspicious of the mold in the house (given the limited and small pictures). I have been in houses where the sump pump has failed, and they had to be gutted down to the studs. There were additional electrical problems, as the flooding damaged some of the wiring.

   FYI, the houses I viewed that were in similar states were priced so cheaply because essentially all of the value was in the land.  Would you pay 17k for the land alone? That is the true question.

206‑849‑5730

@Tasha Mckoy  Looks too perfect a deal ! I would get an inspection, mold is usually never a quick fix. 

619‑289‑9401

If everything else checks out, you could always call a remediation company to give you an estimate on waterproofing the basement. Ayers is a national company, but I'm sure there are others. I just had a quote yesterday for a crawl space, about 1200 sq/ft, that was $12,000. While I would never pay that much and could get them to below 10 pretty easily, they (Ayers) offer lifetime guarantees. I think Owens-Corning has a full refinishing system they offer, which also includes drywall, electrical, etc. Bottom line for me is that there are solutions, and if the price is right on the house and justifies such a large expense, it might be worth it.

As for the mold, I'm rarely scared of it and it would never dictate my decision to buy, although it may lower my offer. The great thing about a house having a mold problem is that almost everyone else is scared of it and thinks it costs tens of thousands to fix, whihc usually means you get a deal. Good luck either way!

What is the house worth if it's totally fixed with no problems? I gut houses to the studs all the time (or buy ones that are already pretty gutted) so I'd be more interested if this is a better flip potential than rental. A five bedroom 2400 sq ft could be pretty desirable if all the problems are solved. 

Originally posted by @Derek W:

What is the house worth if it's totally fixed with no problems? I gut houses to the studs all the time (or buy ones that are already pretty gutted) so I'd be more interested if this is a better flip potential than rental. A five bedroom 2400 sq ft could be pretty desirable if all the problems are solved. 

 Gutting seems like such a large cost.  How much would a gut normally cost you?

Originally posted by @Patrick Snyder:

If everything else checks out, you could always call a remediation company to give you an estimate on waterproofing the basement. Ayers is a national company, but I'm sure there are others. I just had a quote yesterday for a crawl space, about 1200 sq/ft, that was $12,000. While I would never pay that much and could get them to below 10 pretty easily, they (Ayers) offer lifetime guarantees. I think Owens-Corning has a full refinishing system they offer, which also includes drywall, electrical, etc. Bottom line for me is that there are solutions, and if the price is right on the house and justifies such a large expense, it might be worth it.

As for the mold, I'm rarely scared of it and it would never dictate my decision to buy, although it may lower my offer. The great thing about a house having a mold problem is that almost everyone else is scared of it and thinks it costs tens of thousands to fix, whihc usually means you get a deal. Good luck either way!

 Thanks Patrick.  I think I will get a quote from a remediation company and offer way less.  

So you guys think I should pay for an inspection and a mold company before I put in an offer?

@Tasha Mckoy no.  I think you need to get on an airplane or in the car and go see the place in person.  Never, ever buy a property sight unseen.  If you're unwilling or unable to go in person, don't buy far away.  End of story.

Jon Holdman, Flying Phoenix LLC

Gutting a house doesn't cost much at all. I can completely gut a house for less than $1,000.  It's putting it back together that costs money. If I'm gutting a house to the studs and fixing plumbing, electric, then new drywall, cabinets, tubs, shower, tile, flooring etc it costs me around $25 sq ft.  So a 2,400 sq ft house would cost me approx $60,000. But remember I'm in a totally different geographic area than you so material and labor can vary. That's why it's important to know what the house is worth all fixed up.  If it's only worth $35,000, for instance, then this won't work. If it could be worth $125,000 then it's a viable deal.

If it is such a great deal why hasn't a local snapped it up? There is such a thing as too god of a good deal! I would be very wary, he'll I probably wouldn't buy!

Originally posted by @Jon Holdman:
So you guys think I should pay for an inspection and a mold company before I put in an offer?

@Tasha Mckoy no.  I think you need to get on an airplane or in the car and go see the place in person.  Never, ever buy a property sight unseen.  If you're unwilling or unable to go in person, don't buy far away.  End of story.

 It's about 4 hours away. I could drive there one weekend.  What am I looking for, other then the usual?

You should evaluate it just like any other.  The key is to see with your own eyes.  Like others have pointed out the pictures could be telling a completely different story than you will see on the ground.  You want to look at the property, the neighborhood, and the entire area.  You want to meet the people you might be hiring.  You are effectively going to be handing these people your checkbook, so you want to get to know them and the area well enough to be sure its safe to trust them with your money.

Jon Holdman, Flying Phoenix LLC

Originally posted by @Jon Holdman :
You should evaluate it just like any other. The key is to see with your own eyes. Like others have pointed out the pictures could be telling a completely different story than you will see on the ground. You want to look at the property, the neighborhood, and the entire area. You want to meet the people you might be hiring. You are effectively going to be handing these people your checkbook, so you want to get to know them and the area well enough to be sure its safe to trust them with your money.

I totally agree. Then if you still think you want to buy it, get quotes on fixing both the mold AND the cause(s), along with anything else necessary.

I would not totally assume it is not worth doing, but I would be wary about why nobody else wanted to take on this job.

I would be willing to bet that there are foundation problems as well on top of the mold. A seriously messed up foundation can make a house have literally no value at all.

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