Mold…mmmm Smells Like Money

Ahhhh..mold. That smelly, icky stuff that most home buyers think is a deal breaker. In the flipping world what might deter some potential home buyers might just be your ticket to a great deal.  Now that smells like….money!


But not long ago news reports of mold-related illnesses and lawsuits against home builders scared the public into not even considering a house with any type of mold problem. With the housing market on the rise, rehabbers are finding mold is not as frightening as the media once made it. Many prospects in order to find an affordable home are looking at flipped houses. Mold is increasingly seen as a problem that can be solved rather than a hazard with new techniques and a better understanding of the dangers posed by mold. Heck, we didn’t even include it on our Houses Not to Buy list.

“For most people, a small amount of mold shouldn’t be considered a problem,” says Stephen Wilson, director of the Center for Indoor Air Research at Texas Tech University Health Sciences. However, since there are many different types of mold you need to make sure you know what you are dealing with. According to the Centers for Disease Control, small amounts of harmless mold appear naturally in all households, no matter how matter how often Mr. Clean clean

Say a home inspection turns up evidence of Stachybotris chartarum, or stachy, a type of slimy, black mold that can cause allergic reactions in certain people. In many cases, small amounts of mold can be removed safely by the homeowner simply with a bucket of hot water and soap, while larger with larger outbreaks professional cleaning is a must. If the home is severely contaminated a complete gutting of a home may be required, which you will want to assess the cost of before deciding on flipping the house.  Keep in mind that the Centers for Disease Control recommends that it be removed no matter how much is found.

Assessing the Problem

The Environmental Protection Agency recommends taking these     steps when mold is discovered during a home inspection:

  • Assess size of moldy area (small: less than 10 sq. ft; medium: between 10 ft. and 100 sq.     ft.; large: more than 100 sq. ft.).
  • Consider the possibility there may be hidden mold.
  • Clean up small     problems, or have medium- or large-sized problems professionally cleaned.
  • Identify the source or cause of the moisture problem and correct it.
  • Check inside air ducts and air handling unit for mold.














If the mold is left unchecked, it can trigger allergic reactions and asthma attacks for people sensitive to allergies, which is why it is mandatory to disclose mold on the house disclosure report. Typically, mold is discovered during the home inspection. If your building inspector can identify the moisture source, at that point it’s just like anything else that needs to be fixed before you can resell the house.

moldThe real headaches occur when the source of the moisture isn’t obvious. If you cannot definitively decipher how the mold is getting there we would recommend passing on the home. It will just not be worth the headache. Last thing you want are your buyers to come back at your with a lawsuit.

There’s always going to be a market for the fixer-upper property, it may be mold, a bad furnace, structural problems or whatever. The problems that the buyers don’t want to deal with can mean potential on your end. Important thing is to b e able to asses with your Property Repair Estimate Sheet if the cost will be worth what you can get back on the deal.




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Erik Hitzelberger has been Real Estate Investor since 2007. While learning the ropes in the market down-cycle, he now teaches others how to use his systems and leverage other people’s expertise to achieve their own goals.

Erik Hitzelberger – who has written posts on Part Time REI.

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About Erik Hitzelberger

Erik Hitzelberger has been Real Estate Investor since 2007. While learning the ropes in the market down-cycle, he now teaches others how to use his systems and leverage other people's expertise to achieve their own goals.

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