15: Renovated Homes Are DANGEROUS!

Hello again, everyone, and welcome to today's show. If you're one of the 130 million people that are dealing with Sirs Lyme disease, autoimmune disease, or other conditions that are impacted by mold on a daily basis, and you need to learn how to eliminate that exposure, then you're in the right place. My name is Brian Carr, and you're listening to Mold Finders Radio.

Hey, guys. So let's talk about renovated houses, because I know a lot of us, we see them and we get kind of excited about it. And I think a big portion of it is that there's all these house flipping shows and they've been on for years. And it's almost like you enjoy a house that might be renovated more because you could kind of envision, like the work that went into it. And you kind of go on this journey in your mind with it. You're like, oh, we could have done this or they did that or whatever. And, you know, and it's, it's more intriguing, right? And I think that all these TV shows have really helped kind of solidify that in our brains a little bit. But, you know, when I watch these TV shows, I see something different. I see how all of these house flippers are creating sick homes for people. And every time I watch these shows, I'm sitting with my wife and I just, there's comments. And now I got her commenting too. She's like, I can't believe that they just did that. You know, these people are gonna be really sick when they move in here. And it's true. The way that these people handle the houses, it's not about making a healthy house. Like, they'll talk about when they do the interview cutaways on how they want to, you know, provide and create these homes for people and this and that. And I think ultimately they do. I don't think they're like really trying to cause problems for people, but at the end of the day, really what they're concerned about is the bottom line on the house flip, right? Whenever you watch these shows, they have like the pop ups on the screen that show how much they bought the house for, how much renovation, rehab money they're putting into it, what their closing costs are, what their interest costs are, you know, all that stuff. And then it tells you what your break even point is. And so for them, the whole thing, the whole point of this is to make money. The whole point of the show is how they're describing the process of how they're making money, right? That's the whole thing. And so if our core and our fundamental purpose is only money, which it is in most of these cases, then you got to understand that there's going to be shortcuts that are taken and things that are done with the bottom line as the only goal. Right? Because the, that's why they're doing this. So the reason I'm talking about this is because yesterday my wife and I started watching this new show on HGTV. It's called Flipping 101. If you guys ever watched Flip or Flop, the original Flip or Flop with Tarek and Christina, you know, they've been divorced. I like know their whole story because my wife follows Christina on Instagram, see her new house all the time, see her new husband, all this stuff. But anyways, they started this show like 10, like, I don't know, 10 years ago or something, and it became one of the biggest hits on hgtv. And then there's been a bunch of spin offs. So now there's like Flip or Flop, Nashville, Flip or Flop, Las Vegas, Flip or Flop, Fill in the Blank or whatever. But these were the original guys and they did it in, in like Orange county in California. So it was, you know, in our backyard too. So anyways, so this new show, it's, it's, it's from Tarek, who is the husband on the original Flipper Flop. And so the, the purpose of this show, kind of the stick or the hook of the show is that he's teaching like kind of first time flippers how to not make the mistakes that he made. Right? And so that's kind of the thing. So people already get the house. He comes in and kind of gives his advice on, I would do this and that now, you know, I would open this up or I take this window out or whatever he would do, right? So while we're watching this show, he's, he, he's, he. This is the first episode. You know, when they do these shows, they have like quick camera pans, right? So like they'll show a shot and they'll move the camera really quick when they're, when they're kind of showing like, oh yeah, we're gonna, this is the kitchen and this is what it looks like and we're gonna rip this out or whatever. They don't spend a lot of time on that stuff. They don't spend a lot of time really showing you the bones of the house. It's all about quick look at, yes, this place looked gross. And then we're going to talk about what we're going to fix. And then it's a lot of just about how they're fixing. And at the end it shows you the finished product. So when I watch these shows, I always really carefully watch all these quick camera movements at the beginning part of the show when they show the house originally, because I'm always curious, like, what are they not handling right, you know, and how many different areas can I find in literally seconds. It's like a game to me of how many things I could find that might look like a problem. And so in this particular one, they were doing quick camera movements across like the living room. And the ceiling in the living room had a big old circular water stain, right? So there's clearly something that impacted that. It looked like it was a two story house. So my guess, it's the bathroom that was upstairs that caused that.

In one of the rooms they ripped up the carpeting and the subfloor was just warping and buckled and rotting. So that was a big problem. And then in the kitchen and in the bathroom, just quickly I saw that there was a bunch of water damage on the cabinetry and I actually saw mold on one of the walls behind the cabinets because they had like already pulled off the cabinet faces. Right. So those are just like the quick things that, that I saw in this, in just the easy movements. So there was a lot that needed to be done here from a remediation perspective. Like if people were just coming in to remediate this house and you had to deal with removing an entire ceiling, ripping out basically an entire kitchen and properly remediating it, doing that same thing for a bathroom, and then working probably replacing a portion of that subfloor. I mean, this job alone would have taken, if you had a crew there actually doing the remediation, probably would have taken a week or two, probably. And so the thing that really struck me on this is that this show in particular, he, he being Tarek, who's like the expert, he really comes in and helps people understand like where they make money and where they lose money, right. And the biggest thing he keeps telling people is the amount of time that they're spending during the project, right? The more time you spend, the more costs you have in interest on your loans, the more costs you have on the mortgage for like holding the property before you sell it, right? So literally every day that goes by, you're losing money and that is like a big thing that he was drilling into them. So if your thought process is how fast can I move through this project, then you have to understand that they're not going to actually remediate and get rid of the mold problems that were created in these old houses. They're just not going to do it. Because literally every day they spend on something that no one generally cares about, or on things that no one can see after the rehab is done. And this is the big thing, is that even I could go into a renovated house knowing what to look for and have done this for so long. And when the house is renovated, I lose all of the cues, all of the like little footprints of problems. They all go away. It's like if you had a footprint in sand at the beach and you could see that footprint, but as soon as the water comes up over that, like that area where the tide comes, it just washes your footprint away. And now you have no idea where that was. And that's exactly what happens in these renovated houses, right? So they come in, they rip everything out, they put new stuff up, it looks great. The problem is, is when they rip it all apart and we have all these problems that I just talked about, all that stuff gets, it's like, it's like a bomb being set off in the house. They're ripping all these things out. It's causing like this dispersion of particle. And, and with that, all of the contaminants and everything that was hidden behind there and it starts moving up and spreading throughout the house. And when they put all the new things up, it doesn't get rid of all that particle that was blown apart and moved throughout the house. Yes, they're going to do kind of like your basic construction cleaning to get rid of the construction debris and stuff. But that, that doesn't help. I mean, you know, it helps a little bit, but, but all this small fine particle, which is the mold fragments and the mycotoxins that may have been made and even from the bacterial colonies that may have grown during this process in some of these water damaged areas and their endotoxins. And all this stuff is still going to be floating around the house. And then furthermore, after they put everything back together and they think it all looks good, that's when you're going to turn your air conditioning system on. And so then when you turn that on, all these small particles that are floating around are then going to get pulled up into the air conditioning system and it's going to turn into a secondary contamination point in the house that's going to start spreading everything around and it's going to start this vicious cycle of exposure, right? And so that's really the big challenge when you're dealing with renovated houses. So. So let me give you. I wrote these down last night. I'm literally laying in bed watching this show. And I'm watching it and it's just like frustrating me. And so I take out my phone and I write this note. And the title of my note is why Renovations are bad. Because I knew I'd be talking about it today. And then I'm talking about, you know, it's this guy's new show and give a little quick overview on what's going on. But I wrote down the numbers. So I told you a minute ago that they put up on the screen and they put how much they bought the house for and the rehab costs and all this stuff. So I wrote these numbers down, okay. So you could really understand what the motivation here is. Okay. So first off, their loan was for $510,000, okay. And they put $110,000 into rehab. So that's fixing the house. And then their closing costs would have been $30,000. And then they actually did a hard money loan, which was a 12% interest rate, which is what a lot of flippers do. So again, we have to think about this. Hard money is money that you can get from places that are not banks that cost a lot more money to make. And they're typically short term loans. I know this because I actually took a very big course on house flipping and house renovations. My wife and I were thinking about doing this maybe like four or five years ago when these shows were really big. And part of that course that I did was you got a couple like ride alongs basically. So you would have like an expert come with you and look at properties with them and they would walk through the property and tell you like, what they would do and how much certain things would cost. So you could try to get a kind of a. On the, you know, in the field, learning experience, basically. Right. So part of this is that the way that a lot of these people get money for these houses is they use what's called hard money. Hard money is money with a very short term on it. It'll be like six, six months to a year at the most, and you'll have to pay that whole thing off. So again, the whole purpose of hard money is for house flippers who are thinking that they're going to fix the house and then flip it really quick, right? So they'll make all the money back. But again, with that in mind, time is always the stressful thing. And you can't be wasting time on things. And for these people, wasting time is actually handling mold and remediating the right way. Right. So anyways, let me get back to the numbers. So loan was 510, rehab was 110. Closing was 30,000. Interest was 25,000. So this is the interest on that loan that they took, that $510,000 loan. So the total that their break even point would have to be in this house was $675,000. Okay? So that's what they would have to sell this house for to break even at the top of the show. Tarek, who's the expert, says that he doesn't think that they could get more than 700,000 for this house. Okay? So think about this. They're doing all this work, they've got all this risk. They have a $25,000 margin on basically ripping a house apart and repairing it. And listen, we all know that even if we haven't had to do a project ourself, if you ever watch one of these shows or anything, there's always things that come up that you're not expecting when you start opening walls, right? It's just something that happens. The same thing happened with them in this episode, right? There were things that they didn't expect. There was one area where termites had just destroyed like structural components of this wall. They had to like replace a roof and then reframe a bunch of stuff. So that wasn't part of the original budget. Because the original budgets are always all cosmetic, right? It's never, the budgets are never about actually fixing stuff the right way. The only time they ever look to fix stuff stuff the right way is when they open it up and it's. And it's either not going to pass code or they're like, holy crap, like the house is going to fall down and we're going to be liable if we don't fix this. That's really the two reasons that they fix stuff, right? They don't fix stuff to actually like help people and put them in healthy homes. They fix stuff so they could pass code and get their house built, or they fix it to make sure that they're not going to get sued later for not doing something, you know, and that's ultimately what a lot of this is. So anyways, best case scenario was $25,000 a property profit. Now for their loan, their interest was $170 per day. He broke this down per day for them, okay? He's like, listen, every day that you have this place, you're paying another $170. Then later, while he was talking through the numbers, he's like, okay, so now think about this. So now you cut down the timeline from five months to four months, you save $5,000. You cut it to three months, you save another $5,000. Right? You cut it to two months, you save another five. He's like, if we could do this in two to three months, you're going to save yourself 10 to $15,000 and you're going to be able to get that in extra profit. And then people are like, oh, yeah, cool. Yeah, that's what we're going to do. We just cut this project down in five months. You would probably be able to do everything the right way in two months. No way in hell you're going to be able to do everything the right way. You know, and anyway, that's what they did. So they did all. They went, they found a contractor that gave them a bid and an estimate to do all the work in six to eight weeks. Right? So a month and a half to two months was.

The timeline that they were going to do all this work in this place. I mean, two to four weeks of that should just be remediation, you know, depending on who's doing the work and how significant it is. And if you're remediating for someone who's more hypersensitive, you're going to be adding extra protocols in on the back end, which takes another couple of weeks. But if you're literally just trying to remove the source and you're not worried about extracting toxins and all that other stuff, like, that's still going to take a week or two. Right. And they have a contractor that gave them a bid for six to eight weeks to do this entire thing. All right. So, you know, I know I talk a lot, or I've talked a few times, I should say, about some of the criteria on looking for a new home. Right. I've talked about the age of a home that I would prefer and some of these different things. So just to kind of recap that one of those is, you know, ideally you're looking for a house that's three to five years old, if you can get it. The reason that I go three to five is that at three years, a good chunk of the off gassing from all the new building materials will have dissipated at that point. So if you're mold sensitive and you're coming in, you probably have a chemical sensitivity too. Or even if you don't, you're more likely to have it. Or if you haven't noticed it yet, if you get yourself into an environment with a heavy chemical load, it could trigger something with you. So after three years, a good chunk of that off gassing is going to pass. So that's why I have three and then three to five years. Listen, the longer the history of a house, the more problems will have happened in the house. The more little leaks, the more things that have happened that either didn't get handled the right way or they didn't even know that happened. And you start inheriting everything that's gone on in this house through throughout its whole history. Right? That's why like people in a hundred year old house, I mean there's so many problems in those houses because you have a hundred years of leaks and floods and tiny things and big things that nobody handled the right way, especially way back when, because they really didn't think it was a problem then. And that all still stays until it's actively removed. Right. So shorter history, better. Also just from like a homeowner perspective, like if you're gonna buy a house that's 10 to 15 years old, think about some of the things that typically fail around then. Your roof fails around 20 years. So if you're buying a house that's 15 years old, you're basically locking in the fact that you're gonna have to spend 20, $30,000 on a roof in five years. You know, same with your H VAC systems. These systems should not be in your house forever. You should be looking at these things every 10, you know, at least every 10 years and see like what the status of them are. But there are things in a house that are not meant to be just stay there forever. Plumbing starts to fail, things start to happen, right? And so if you're getting a house that's a little older, it's like think of the house life span on like a bell curve, right? And on the curve up, it's when the house is healthy and everything's working and then it kind of hits the middle of that curve and then on the curve down is when things start to fail and things start to break. When you're buying a house at like 15 years old, you're buying a house kind of at the tail end of that curve and you're essentially just kind of saying, I'm going to get this house now. And then, oh yeah, in another five to ten years, I'm going to have to spend probably another $50,000 on the house. I mean, that's just. It's just a given. So for me, if I'm looking to buy a place, I don't want a place that has all that history, and I don't want to have a place that has a timeline behind it that's going to stick me in a financial situation that I'm going to have to find, fix a bunch of things that are about to fail because they typically all fail around then, right? So the first thing, three to five years on. The second thing, I always say, no crawl spaces or basements. You can listen back several episodes. I talk about that third thing. You don't want flat roofs. Flat roofs are notorious for roof leaks because the water doesn't drain properly and it starts eroding the. The membrane of the roof and it can start leaking through. So that's a big thing. But the other, other big thing is renovated houses, right? And this is the. This is the tough one because you say, well, the house isn't three to five years old, but they just renovated it, right? So it's like it's new. No, it's not. It's not like it's new, okay? It's. It's like they put up a fresh coat of paint and covered a bunch of stuff. That's what it's like. It's like I would have an idea where all the problems are, but now that tide from the ocean came up and washed my footprint away, and I literally have no clue where anything is coming from any anymore. That's what a renovated house is like. Renovated houses, guys, are super dangerous for people that are sensitive, super dangerous. So it's. It's one of the biggest, biggest things that I want people to avoid and not get sucked into. When you walk into a house and it looks really pretty and you think, oh, well, it's in my price range because, you know, it was an older house, right? Maybe they renovated it, but, you know, the neighborhood isn't brand new or whatever, so the price might be a little lower. Guys, you're going to be putting yourself in a bad situation if you get a renovated house right. Now, I'm not gonna say every renovated house can have these problems, but when we are trying to find places for us to live, you have to assume the odds, right? And the odds are the how most houses, you'll see these numbers out there, like 50% of houses have water damage. I will tell you, from all the homes that I've been into, that number is like grossly, grossly Underestimated. And it's because when they think of water damage, they think of big water events, they think of floods, and they think of things like that. But the thing is, is like, that leak that happened under your sink didn't get reported, or that one time that the water heater had a leak didn't get reported. Or like, yeah, there's a little roof leak up here, but we just fixed the roof, so, no, that's no longer an issue. There's so many things that don't get included in that 50% number that it's so low. The truth is, I think that number is closer to 80%, right? I mean, eight out of 10 homes I go into, I feel super confident that I could find at least five places where there's water damage. And that's just from going through all these houses, right? So, you know, that's going to be the case in these older renovated homes, because the homes are older. The only reason they're renovating them is because they're old and because people won't buy them, you know, because esthetically they don't look good. That's why they're renovating them. That's why they have an opportunity to buy them at a low price, right? They buy them at a low price because it's super dated. Nobody wants to live there because everybody watches these shows and wants to live in one of these houses. So they buy the house cheap, they give it a facelift, and then they sell it again. That's how they make their profit. But the whole thing, again, guys, before I close up, it's about them making profit, okay? They're creating a business. And I say this a lot to my clients. I think I've even mentioned it on the show before. You have to think about what the underlying motivations are for whoever you're talking to about anything, okay? Everybody has a motivation. If their motivation is not in alignment with yours, then there's going to be basically a bit of conflict in terms of what's being done and how it's achieving your goals versus their goals, right? The conflict may not come out in a fight or an argument or something. The conflict might come out and how your body starts reacting in the home after you go in there. Because their purpose was just to flip the house as fast as they can, right? Every day you're paying $170 on this house. If you cut it down by two months, you're saving 10 grand, right? These are the thought processes. Why am I spending so much on this type of building material when I can get this cheaper tile for less and it won't matter. This is how the thought process. I mean, watch one of these shows. The entire thing is about that. It's all about how they can save money and get it done faster. So do you think that that person is going to create a healthy home for you to be in where any places of water damage have been addressed, that there's been proper mold remediation, that there's been testing any of that stuff? Of course not. Of course not. Watch any of these shows. Any of them. There's maybe one episode or two in a, like in a few seasons that I've seen where they do talk about mold. Right. And only because they open something up and it's just like everywhere and they have to do something because it's liability at that point. Right. So keep all that stuff in mind, guys. Like, I know, I mean, I'm looking for a house right now too. We're looking to rent a house. So. And I talked about it, I think on the last show and you know, fingers crossed, like I said, that one didn't really have a lot of stuff going on. It had, you know, a small, small little issue and I think that's the best that you can get in a rental house. It's not going to be perfect. But keep that in mind when you're looking for places. Places. And just quick update on that place in case anyone is following along. We put in our application on that place and with it we wrote like this custom letter about us. But I designed it like I had like pictures that I included in it and I, and I kind of designed it in this really cool way hoping that it would stand out for them. So fingers crossed that our story and kind of the, the, the aesthetic of what we sent them will help us stand out. So, so that's what we're hoping for too. I think we might hear at least some initial feedback this afternoon. So maybe I'll continue to keep you guys updated on that too if you're, if you care. Anyways, thanks for listening today. Keep this in mind when you guys are looking for new places. And just in my mind, I got to tell you guys, renovated houses for me are just completely a non starter. Like it is a deal breaker if the house was renovated, if the age of the house is older, and I know it was renovated, it, it's just an absolute, absolute no because you have no idea what you're walking into and there's really no way to fix it. Because you don't know where it's coming from.

Hey, if you guys have enjoyed any of the stuff that I've been sharing over these episodes, I would really, really appreciate it if you wouldn't mind just taking, like, 10 seconds to rate the podcast. Hopefully you would like to rate it 5 stars, but I'm not going to ask you to rate it a certain rating. I, um, but I would. I would love for you to do that. And the reason why is that, you know, my mission is really to get my message out to as many people as I can, and we've been able to do that to some extent, but there's so many others that I feel I can learn and benefit about all this stuff. And one big way to do that is to get the algorithm that these podcasts work off of to notice the show. And the way they notice the show is by ratings. Right? So the more ratings you have, specifically those with comments, the higher recognition you're going to get in the system, and then they're going to make that show more visible to people. And so if you guys wouldn't mind doing that for me and literally taking like, 10, 15 seconds to do that, I would really appreciate it. And obviously, I'm going to continue to do things to help you guys out, too. Okay, so that's my quick request for the day. And yeah, that's what we got. We will talk to you next time.

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