Our featured speaker at Traction REIA this month, Pete Youngs, detailed the numerous “toxic terrors” investors come across, and IF YOU KNOW WHAT YOU ARE DOING TO FIX THE PROBLEMS, they create an excellent opportunity or “value play” to cash in big time.
MOLD:
Mold in houses has become one of the most popular scares in recent years. Although it has been around since before caveman days, our industry is always out to find something new to charge thousands of dollars to correct.
Most molds, even black in color are not the toxic poison type of mold that causes illness in people. The temporary fix is to use a 50/50 mix of bleach and water to clean the surface. This does not kill the mold, it just removes the surface visibility and unless you take away the moisture or cause of the mold it will return.
If you have significant mold in sight, one of the brands of product I recommend is Microban. It is highly effective in handling problems associated with mold, fungi, bacteria, germs and so on. You may find it by calling a janitorial supply company from your yellow pages book.
Microban is used by professionals for mold remediation; yes the toxic black mold remediation that costs thousands of dollars by people wearing HAZMAT suits. It is also used for water damage, flooding, sewage backups and such. Another type of product for the same problems is called Shockwave and may be easier to find locally.
The effects of mold can be breathing problems such as asthma, headaches, rashes, stomach ailments and so on. The four steps to eliminating mold are to contain it, kill it, remove the dead mold, and protect from further contamination. This may mean an exhaust fan in bathrooms, better ventilation in rooms and crawl spaces. Placing dehumidifiers in strategic areas in the house or using hepa filter air cleaners as well.
You can get a mold test kit at major hardware stores for about $10.
LEAD BASED PAINT:
Lead based paint is a toxin found in many living quarters and can cause serious illness or even death. It is especially toxic to children and can even affect babies before they are born.
A good thing is that lead based paint that is not deteriorating is not a threat. Also there are options to be done to reduce and eliminate the hazard. You can contact lead from paint by breathing it, touching flaking areas of paint, dusty paint surfaces and during renovations it can be cast into the air from hammering, sanding, sweeping and more.
Youngsters can get it on their hands from doors, windowsills, floors and such, and then put their hands in their mouths as we commonly see them do. This can affect brain function as well as nervous systems in children.
Long-term exposure leads to hearing problems, learning problems, behavior problems, headaches and lots more. Adult symptoms are more described as reproductive problems in both genders. Difficulties during pregnancy, a rise in blood pressure, nerve problems as well as bad digestion, memory loss and muscle pain.
This threat goes lower risk in younger houses because lead paint was stopped for making and using it around 1978. So newer houses have less risk of this problem.
Lead based paint test kits are available at most larger hardware stores for about $4 a kit. The most common places to check would be windows and sills, doors and doorframes, stairs, railings, decks, screen porches, and let’s not forget, furniture.
Don’t overlook your prized antiques either. If it’s old furniture that has original finished surfaces, this area is often overlooked. Any peeling, flaking or chipping paint accompanied by dust is suspect. To do it yourself or hire a pro for lead abatement, you need to stay clear of sanding, sweeping and vacuuming as this will spread the dust air born. Lead based paint must be removed (the painted structure) or most common is to encapsulate the paint. Products can be bought that you spray, brush or roll over the lead paint to seal in the hazard.
The E.P.A. (where some of my research was obtained) has a booklet for free on lead based paints; it’s effects, the abatement and prevention available upon your request. This will provide you with some useful info.
METH LABS:
Another toxic terror that is becoming more well known is finding out that the house you bought or are thinking of buying as an investment was once used as a meth lab, a crack house, or some other form of drug related house.
This came up at a recent seminar I gave. The person asked my opinion about his deal and that it was previously a crack house. He made an offer and it was accepted. The house, he said, was a property seized by law enforcement and it had been vacant for a while. I listened and told him that I would not want to buy this house myself.
Puzzled, he asked why.
First, this information will need to be disclosed to all interested in buying it and could be a turn off. Second, I asked how it had been cleaned up. He told me that the city had given the house a clean bill of health. So I said will they accept any liability if anyone has any health related problems? He said no. I told him that all liability would rest on his shoulders and he would be solely responsible for possible trouble.
He thanked me, and said he really wanted to be talked out of the deal cause it was too much for him to do on his first deal. It was almost a total gut job. Now keep in mind, under his circumstances, I told him no I wouldn’t buy it myself. However, I do know several investors with a lot more experience in this type of house that would have jumped all over this deal, and made a huge profit as well. It was the experience level here. He probably should get his feet wet without starting with an issue on the house like that one.
The problem with drug related houses is that there is no set way to tell how much residue is still in the cracks, crevices, vents, gaps and other areas that may still cause exposure to the toxins. There is no real data on how long of exposure to this will then affect someone.
It is the responsibility of the homeowner from purchase on for any liability caused by this. So how do you know if it’s a drug house or meth lab? Generally there are beakers and burners and test tubes present shortly after abandoned. There may be a smell present and cans of cooking fuels around. There may be burn marks on countertops as well as dusty residue in kitchen and bathroom areas. Samples can be taken by taking scotch tape and lifting debris from surfaces of countertops, sinks, carpets, bedding, curtains, floors and utensils found in the property. Have them analyzed by a law agency and get a report. Then decide if you want to do the deal.
Remember, this does not scare a seasoned investor who knows how to deal with creative real estate. This is an opportunity, or a niche, because most people will pass on these kind of deals, and the ones that do them… PROFIT.
CARBON MONOXIDE:
This is a problem that can be found in many homes. Even mine.
I just recently had my furnace replaced and was about to remodel my basement and add some space to the house when I noticed an exhaust pipe from the furnace had separated from a portion of pipe. This had been easily 3 months or so since the job was done.
I went to a local hardware store and got a test kit for about $6 and did the test. It came back as a dangerous reading from the kit. If not found, this could have turned out to be serious health risk.
CM is an odorless, colorless gas or liquid and is hard to detect without a test kit. Though my culprit was a furnace, others could include kerosene and gas space heaters, leaking chimneys, gas water heaters, wood stoves, and gas operated equipment like cars.
Some people in winter will start their cars in the garage to let them warm up before leaving for work and even with the door open this poses a threat. Even in low concentrations, fatigue and chest pains can happen. With more exposure it may cause dizziness, lack of vision or concentration, headaches, and nausea.
Exposure can be fatal.
To reduce risks, EPA guidelines say to keep appliances properly adjusted. Always use vented heaters and never use alternate fuel sources on things meant for a certain kind of fuel. Such as do not use gas in a kerosene heater. I have seen workers do this on jobsites in the cold. You need to have an exhaust fan over gas stoves.
Never grill indoors with any gas driven bar-b-que and have your furnace checked and serviced often.
I hope this information will help and educate you as to the dangers of TOXIC TERRORS IN YOUR HOME and the investment opportunities they create for a investor rehabber.
I’m looking forward to teaching everyone more at on the ONLINE Traction REIA events this month.
Everything works nationwide. Join us on Zoom from anywhere:
#1. Main Monthly Meeting ONLINE
TOPIC: “Rehab any flip house for 50% off rates”
SPEAKER: Pete Youngs
Thursday August 20th ONLINE using ZOOM.
6pm Eastern
5pm Central
4pm Mountain
3pm Pacific
#2. ONLINE Training Intensive with Pete Youngs
TOPIC: “Pete’s Essential Tool Training and Signature Home Depot Tour”
Saturday August 22nd ONLINE using ZOOM.
10am Eastern
9am Central
8am Mountain
7am Pacific
Tom Zeeb
President
Traction REIA:
11+ Year Recipient of the National REIA “Honors of Merit”
and the “Award of Excellence”
For Best Real Estate Investor Association!
