Allyson discusses the presence of water in the basement of the cultured cottage, noting signs such as crumbling paint, water marking on walls, and damaged plaster. She highlights the importance of determining if water is coming from the floor or the wall, as this impacts the remediation process. Water coming from the floor can often be fixed with a drain tile system, while water from the wall requires a more thorough investigation to identify and address the source of infiltration. Allyson emphasizes the need for a methodical approach and ensuring that the root cause of water infiltration is addressed to prevent future issues.