This was a surprising house flip that took place at the start of the 2020 pandemic. But Covid-19 was not the strange part of it. What was discovered inside the home is what makes this story unique. You will want to read this, it is a little long but very interesting. There will be pictures. This was a very profitable flip and I will provide numbers from the perspective if you would have bought it wholesale from me since I did try to wholesale it early on. If you are curious as to the title of this post “The Iguana House” you will need to continue reading to find out more. I’ll include all the before and after pictures of the flip as well. Look to the very end for more.

This house flip was not necessarily planned. It was an estate sale in my neighborhood. I knew the owners and occupants. I do not want to give the address or show the exterior pictures for their privacy and because the family that bought it does not know the history behind it and I prefer they do not know. So I will just discuss the numbers and show the interior updates. I do live in a neighborhood with people that have been here for over 20 years since the neighborhood started and many of them are in their “Golden Years” so there will likely be more estate sales coming. But probably none as unique as this one.

The Start of the Process

I gained access to this house on Feb 1, 2020. The owner passed away at the end of Dec 2019. Since it was an Estate property, there were a lot of belongings to clean out of the house. This is pretty normal because when you offer someone that they can leave everything and don’t need to clean or fix anything, this is a good deal for them and gives you an advantage. Nobody wants to have to do all that extra work, especially as you’ll see, in this instance. So, in this case, the upstairs was pretty good, still needed cleaning and would need to replace the flooring and paint everything, and some other minor updates, but other than that the upstairs was decent. There were three bedrooms upstairs and two full bathrooms. The master bedroom was a little larger than the average size in this neighborhood and has it’s own patio door. And it has a good-sized, fully-fenced yard.

The basement on the other hand, was a disaster. It was unfinished to begin with. It had bare cement floors, one room that was being used as a bedroom and another that was a small bonus or storage room, a good sized family room and a large full size bathroom. But that bathroom was basically destroyed and neither bedroom could be counted as a bedroom since they did not have a closet and also no flooring. There was trash everywhere, old furniture, and most notably, Iguana feces everywhere. At one point there had been two iguanas and even though they had large cages, they must have been allowed to roam free because their droppings were everywhere. It had been some time ago, because it was all dried so it wasn’t as bad as it sounds, other than the smell. It was a very unique, rancid smell. To get a sense of it, think of when you have been to a zoo and go into the primate exhibit where there is a pungent smell. But at least those usually have a breezeway to help air it out. I got some help from a cousin to help remove everything from the basement but even I didn’t want to clean up the feces. So I hired someone and paid a very generous $300 to clean it all up. I even provided masks and gloves. This was right before the start of Covid-19. I went to Home Depot to get some masks and noticed the shelves were almost bare. I was totally unaware of the situation. Luckily I was able to get some normal breathing masks and some filtered gas mask type masks for the people cleaning and some gloves. This was about mid-February.

The Big Surprise

While we were cleaning and removing items from the basement, one of the cleaning people asked, “How many iguanas were here?” I was confused as to why she was asking but I said I knew that at one point there were two but one died some time ago so there was only one left but it later also died, probably a year or more ago. I was now curious as to why she was asking and I asked her, “Why do you ask?” She then proceeded to tell me that there is a dead iguana in one of the cages. I was like, NO WAY! What a shock! I never bothered to look inside either of the cages. They were both covered so that you cannot see inside from the outside without opening the door. And when I say these are large cages, a 6 foot tall person could easily stand inside them. So we all immediately went down to see the iguana and make sure she wasn’t just crazy. Lo’ and behold, there it was. The poor creature had died some time ago, and the owner just left it there. It had obviously been quite some time ago since it was completely solidified. We tried to move it with a shovel but it was stuck. You could see where the fluids had leaked out and basically mummified and glued it to the base. So there was not an easy way to remove it.

Just to give a little commentary as to why this was in this condition. The owner was elderly and handicapped and could only occupy the upstairs. A middle-aged person lived in the basement and obviously was a slob and did not clean or take care of anything. So the upstairs owner had no idea what was happening in the basement and probably just assumed the smells upstairs were from the iguana and maybe the bird that had a cage upstairs. But the smell upstairs was just a fragment to the condensed smell downstairs. And the mess you’ll see later in the before pictures upstairs were actually left behind by the person that was downstairs as they were moving out. It was never that messy while the owner was alive.

The Removal

We closed the cage again and checked the other cage as well, nothing there, and then proceeded to clean out the entire basement, leaving that cage for last. At my wife’s request, I called a few local places that handle removing toxic things and such. My cousin thought we could just remove it ourselves, but I explained my wife’s concerns for our health and said I would call and ask first, if the price is reasonable, why not? I called two businesses and explained what it was and that it has been awhile and since it was stuck to the bottom of the cage, so they can’t just pick it up and remove it. They considered that to be a toxic environment, because if they were to move it, it could break apart and release spores or something. One place I called said because of that, they would charge $1,000 to remove it. I thought that was insane. Another place was considerably less, I don’t remember for sure, but I think around $350. I was willing to pay the $350 but my cousin convinced me to save the money and we could do it.

At this point everything had been removed from the basement except for this cage with the iguana. After three days, we had completely filled a large dumpster trailer I had ordered, I thought we would only fill it half way, but it was literally filled to the top. To remove the iguana, we first wanted to take apart the cage. We put on masks and goggles and used a rotary saw to cut the cage into pieces until we got it down to just the base. Both cages were mostly pvc piping to form the shape, on top of a large piece of plywood which sat on a bed frame. We swept off all the extra filth so that it was just the iguana on the base which was about 6 ft by 4 ft. We then used the saw to cut the board around the iguana. Once it was freed on a piece of board about the same size as it, we just carried it out and tossed it in the dumpster. It was actually pretty easy so I was happy I didn’t spend the money since we would have had to take apart the cage anyway. When the Iguana was alive I measured it to be about 4 feet long from nose to tail.

The Pandemic Shutdown

Now that I had cleared out everything, we could begin on the actual work to flip this house. Or so I thought. The plan was to keep the current mortgage in place and use a private or hard lender to fund the rehab which would take about 6-8 weeks. I was still oblivious to what was happening around the world with the outbreak of the pandemic starting. I soon realized that everybody was afraid of what could happen. Nobody was lending money since they all thought everything was going to collapse. At that time, I knew that the recent comparable sales would price this house at about $300k. Conservatively $290k. And I already had my estimates from my repair guys and what I was going to spend in addition to replacing all the flooring and paint and some windows. So I budgeted about $30k to do everything which was supposed to be just a little above what we planned to spend just to have some extra fluff for anything unexpected.

Since I couldn’t get the financing needed I decided to try to sell the house as-is and even offered my repair guys to do the work if needed. We did not list it on the MLS, we just listed it on BiggerPockets.com to go directly to investors and sent it to a few investors I know as well. I paid for an appraisal, after it was cleaned out, who appraised it at about $260k, even with the unfinished basement and dirty old carpets. This was a 4-5 bed 3 bath home about 2,600 square feet on a quarter acre lot in Idaho. A really nice house overall. I say 4-5 beds, because if you remember what I mentioned earlier the smaller room was more of a bonus room that was being used as a closet for the large room. So technically neither of them were an official bedroom. So with a current high appraisal and knowing it could sell for at least $290k after repairs and a repair budget of $30k, I listed it at $220k. For me, even though I would get less overall than selling it after repairs, I would still get an acceptable amount and get it a lot sooner to utilize on other investments. And for a buyer, it would be a fair price for the condition and the equity they would have after repairs. Plus the nasty part was already done, it was cleaned out and ready to just do the rehab.

Unfortunately I only had a few people interested and only a couple offers which were under $200k. I was not going to sell it that low. So I held on, I started a process to refinance the home in my name and pull out additional cash based on the appraised value. This took much longer than it was supposed to as well but finally got financed after almost 3 months, the banks were all behind because of the pandemic and they shut down and were trying to catch up and do everything online. The prior mortgage was really high, over $1k/mo and the new amount was about $400. So it was worth it to save on monthly holding costs and I pulled out an extra $35k to use to finance the rehab. I guess I forgot to mention as part of this deal, I took over the payments to get early access.

At this point I was told it would take about 9 weeks, it ended up taking maybe a little over 12 weeks once we finally got started. Again, the pandemic caused all contractors to be behind and then flooded trying to get work caught up so it was hard getting anybody. But it got completed. The pandemic did not affect home sales in this area, in fact, home sales increased and demand increased. Home values rose considerably. We added a closet to the large bedroom and expanded the smaller room and added a small closet so that it would officially be a 5th bedroom. I wanted to list it at $325k. My wife is a Realtor and she said we should list it at $315k. We knew the house would sell fast. It was a totally updated house in a nice area and looked amazing. If it would have been a corner lot, we may have just moved in. Since with current conditions, people make offers and demand a quick response and in many cases houses sell the first day they are listed before allowing more people the chance to even see it and make an offer. So, we listed it and left it open to receive all offers for one week before making a decision. We explained this in the offer so everybody knew. Some other Realtors did not like that, mainly because they knew it would make it harder for them to win. We did an open house the first day, some idiot came in and said he would offer $250k. I wanted to just punch him for being stupid, but we politely declined the offer. There was a 2 bed 1 bath home down the road he could buy for that price. In the end we received 6 offers. 4 of them were above asking. The top two were very similar. One had definite stronger financing that they would for sure be able to close. But the other one for the same price, would be able to close much sooner, in about 3 weeks, rather than 6 weeks or so for the other. We made some follow-up questions to verify that they could close quickly and accepted that offer. It sold for $335k.

The Numbers – if YOU had bought it wholesale

Now, had someone bought it for $220k like I had offered it, did the repairs for $30-40k, depending on what finishes they wanted could have maybe done it for less, but to be conservative we’ll say $40k, giving a total cost of $260k. They would have then sold it for $335k, maybe even more had it sold during the peak selling time, we sold in near the end of October, had it sold in July or August, it may have sold for more. But at $335k, they would have a gross profit of $75k, minus commissions and closing costs. Had you bought it from me and then listed it to sell with my team, you would have received a discounted agent commission to save you more. That’s how we roll! Basically the only expenses would be commissions and your closing costs. The market is so competitive that all good offers pay their own closing costs and little to no contingencies.

The people that had the chance to buy it at $220k but would not go above $190k should be pretty upset with themselves. They may have their own rehab crew which would have made this even less expensive for them which means more profit. But, no complaints from me. It took a lot longer than anticipated but also turned out better than I first imagined. I discovered some new tricks I had not considered before which adds a great look for not a lot of money. I’ll share those pictures with you. We had considered replacing the countertops with granite. But they were fine, just not as nice. Instead, to add some pop, we replaced the backsplash that was the same basic countertop material, with a nice glass tile backsplash. It really made a difference. Then in the upstairs bathrooms, the showers were completely fine. Instead of ripping them out just to put in a tile shower, and a lot of additional cost, we used that same tile backsplash and added it above the top of the shower. When I imagined it in my head I liked it, but when it was actually done, I loved it. It turned out way better looking than I had thought it would. Whenever possible I will do that for all rehab projects. It saves a lot of money and adds a unique look that really pops which is what helps sell a home.

With this house, we replaced all the toilets to dual flush, replaced all the faucets, replaced all flooring. We used waterproof laminate on the upstairs living room and dining area and the bathrooms and hallway. New carpets in the bedrooms and downstairs family room, LVP in the basement bathroom. We completely replaced the basement bathroom, the only thing that stayed was the vanity. We added can lights and a ceiling to the basement. Yes, it did not have any ceiling drywall originally and just a few random light sockets. Added closets to the basement bedrooms, expanded the smaller bedroom, removed an unnecessary wall and created a new entry way to the utility room. Replaced several windows, cleaned out the air ducts, removed a wheelchair ramp in the garage (gave it away to whomever would come remove it so I didn’t have to), power washed the siding, replaced all the light switches, replaced some lighting to more modern, added matching backsplash to the kitchen and bathrooms, and new paint everywhere. We used Sherwin Williams “Repose Gray” with white trim. That was pretty much it. The biggest single expense was probably just the basement bathroom. It had a shower stall in the middle of the wall which covered up half of a window. So we removed that and installed a full bathtub with shower with tile surround which involved some new plumbing and installed an exhaust vent since it did not have one before.

Lessons Learned

I think this is a great time to quote Warren Buffett, who said, “Be fearful when others are greedy, and be greedy when others are fearful.” People were afraid to invest at the start of the pandemic during March in particular when everything shut down. So, people were afraid to buy this house from me for $220k and also afraid to lend $30k to me. People pulled their money out of the stock market and stock prices dropped. People that were not afraid, realized it was an opportunity and snatched up great deals both in real estate and the stock market. Those types of amazing opportunities don’t come often. When they do, you need to be ready. Those that are ready are the ones that come out ahead. Since I am an Eagle Scout, it is appropriate to say the Boy Scout motto : “Be Prepared”.

If you are an investor or wanting to be an investor and are looking for opportunities to invest or get started, please contact me and we can find a way we can work together. I always need private lenders for flip or BRRRR deals and even if you are a typical turnkey rental buyer, we can help with that as well.

Below are images of the before and after. I had some technical difficulties and not all of the images would load and not aligning where I want them, but there are enough to see the transformation.

The pictures are starting to not let me line them up side by side, so I will try to put them in line, the “before” above the “after”.