Recently, Will Heaton of Intrust Funding and Tarl Yarber of Fixated on Real Estate walked through a “Euro-cottage” that was renovated with a hard money loan from Intrust Funding. Check out how Will was able to marry the old with the new to create a unique combination of design elements for this home in Seattle. From the video:
“One of the easy things with working with Intrust is you don’t have to have an on-site draw inspection. Borrowers are able to submit just 10 or 15 photos, and a description of the work they did, 24 to 36 hours later, we can wire you the funds, drop a check in the mail, come by the office pick up a check, do direct deposit.”
Full Transcript
Tarl Yarber:
Hey everybody. I’m Tarl Yarber with Fixated Real Estate and we’re here with my good friend Mr. Will Heaton with Intrust Funding and Heaton Dainard. We’re at one of his projects here in Seattle, Washington. This is a modern, Euro-cottage, right? That’s what we’re calling it?
Will Heaton:
We’re going to call it whatever you want, man. It’s a Euro-cottage!
Tarl Yarber:
It’s a Euro-cottage, modern Euro-cottage, right? — So he’s telling us about this project. We want to show it to you. He’s gonna make over six figures on this house which is super exciting but more importantly there’s some huge issues that they had to work with on this house to keep it as awesome as it looks now, because it didn’t used to look like this. Alright, we’re going to go inside in a moment. But Will, before we go inside, what was one of the biggest issues you had on this house?
Will Heaton:
The biggest issue was: there is some awesome character in this house—that is the cove ceilings, and some really unique designs in the way that the lath and plaster was put in—so we didn’t want to delete that, and we would never have been able to reproduce that with sheetrock. So we wanted to go in and rewire the house, and replumb the house, at the same time preserve the character and looks of the home. So it was a difficult process.
Tarl Yarber:
Yeah, that’s going to be really hard. Especially when you go in there, and we see it, like, I don’t know if you guys have ever had to replace electrical and plumbing or any of that kind of stuff, and try to keep the original charm, it gets really freaking hard, right, and so difficult. Yeah, and is this a new roof, or?
Will Heaton:
Yeah. That’s a new roof.
Tarl Yarber:
They didn’t make those back in the 1920s—
Will Heaton:
No, this house originally had a tile roof on it. Actually, we tried to preserve that tile roof and probably had 10 different roofing companies come out here and they were like, “We can’t find these tiles. We don’t want to touch it. We don’t want to walk on it.” And it was literally, the whole time we were working on it, we were trying to get this roof figured out, and finally, we just, we just bit the bullet and put a metal one on.
Tarl Yarber:
So before we go inside, how much did you buy the house for?
Will Heaton:
$875,000.
Tarl Yarber:
Eight hundred and seventy-five. And how much do you think you put in for rehab?
Will Heaton:
I know we put in 220,000 into it. 218 to be exact.
Tarl Yarber:
Wow, you can build a house for that! So what was your biggest cost?
Will Heaton:
The roof was a big one; I mean that was like seventeen thousand dollars. And you know rewiring the house was difficult because they had to trench a lot of stuff and preserving what was in there.
Tarl Yarber:
And what do you think you’re going to sell for?
Will Heaton:
I think we’ll probably get about a million four, a million four-fifty for the home. It’s in a good neighborhood here in Seattle. I mean it’s got beautiful setting on a park.
Tarl Yarber:
Do you guys see that? Look at this beautiful view.
Will Heaton:
We’re two blocks to like—literally not even two blocks—we’re like four houses away from Lake Washington, from a nice park—
Tarl Yarber:
Yeah, you can walk there, ride bikes, it’s going to be great. So let’s go inside, check out the original features—or like the new features that aren’t original, or I don’t know, call it original…
…
Is this door, preserved?
Will Heaton:
Yeah that’s the original door. New piece of glass, actually.
Tarl Yarber:
Did you say that there was a hole in here?
Will Heaton:
Yeah, there was a hole in the door for something. So we ended up just making it a mail slot.
Tarl Yarber:
That’s really creative!
…
Check this out. Alright, so this house, is this all new sheetrock or—?
Will Heaton:
This is the original lath and plaster that we actually skim-coated over it. Because, you know, if you tear it out we would end up tearing out all these really cool, you know, features here. I mean, come check this out. I’m like this sitting-nook here, right? I mean in order to remove and replace the lath and plaster there you would have never ended up with that exact design or these cove ceilings and the rounded corners.
Tarl Yarber:
Even this, like this is incredible. So like it’s, the craftsmanship’s awesome. But, so, what you’re saying is that this is all lath and plaster but it used to be, it used to not look like this though, because this looks like new sheetrock.
Will Heaton:
Yeah, the finish that they did, it would’ve been great if they just did a nice smooth finish, but whoever built this house thought it would look good if they went out to their shed and grabbed like the nastiest, dirtiest broom ever, and swept the stuff on the walls. So it was like quarter-inch, non-directional grooves of crap everywhere. So we actually skim-coated the whole thing and then hit it with a light texture just to kind of break up the inconsistencies.
Tarl Yarber:
So if you guys can imagine that on, so lath is already that thick, and then it has the grooves and then they have the skim-coating on top. You probably got like a good inch, inch-and-a-half…. It’s insulation! It’s actually warm. So this house, check out this house. So you guys did the butcher block, this, was this already open?
Will Heaton:
No, this kitchen was totally closed off on both sides. It was its own room, right? So the hard thing with this style of home is they’re really cute and charming but they’re very compartmentalized. So as we know people like the open, bright feeling and we had to kind of come in here and perform surgery to try to preserve the look and feel, simultaneously creating an open living environment.
Tarl Yarber:
Let’s check out the rest. So did you guys pick out the finishes or did somebody else do it?
Will Heaton:
No, we’ve got an awesome designer, Katie Kepler, in our office. She does a phenomenal job picking out the finishes. I wish I could take credit for that.
Tarl Yarber:
Earlier you were saying this was all you.
Will Heaton:
Yeah right!
Tarl Yarber:
Katie’s somewhere on the property right now. Yeah, she’s awesome. So Katie’s actually designed some of our houses before in the past when we bought houses from these guys. So you bought this house cash or did you have the final—?
Will Heaton:
No, I mean, that’s one of the great things is we actually borrowed hard money from Intrust Funding, our own company, and we did our rehab loan, right? So we’re limiting our capital out of pocket by not only just leveraging the purchase but leveraging the cost of the renovation.
Tarl Yarber:
Wow, so what do you mean by all that?
Will Heaton:
So we bought the home for 875,000? I think our original budget was about a hundred and eighty, $190,000. And so if you look at that, we roughly had about a 1.06 million dollar project. And so we put 20% of that down which is, you know, roughly like 220 thousand bucks down, 200,000 right in there. And we then drew a loan for the renovations. That 220 we put down gave us back our entire renovation budget, was about $180,000. So we spent about 220 right? We had a couple of surprises: didn’t realize how much of an undertaking the lath and plaster would be, did not intend on replacing that roof. We wanted to keep that tile roof, tried very, very hard, and again, that was a $17,000 unknown—not unknown, unexpected—that we had to go back in.
Tarl Yarber:
So if you’re not the owner of Intrust Funding, do you still have to, for yourself, do you still have draw a request for your own company and stuff to be able to draw?
Will Heaton:
Yeah. We run everything like we’re a borrower just to keep everything consistent, but this is one of the easy things with working with Intrust is you don’t have to have an on-site draw inspection. Borrowers are able to submit just 10 or 15 photos, and a description of the work they did, 24 to 36 hours later, we can wire you the funds, drop a check in the mail, come by the office pick up a check, do direct deposit. Right? We know if we’re charging you 12% interest for your loan, we can’t be the ones holding up the project. So we turn our draws around with photos, and immediate access to the capital.
Tarl Yarber:
That’s really good. If you haven’t borrowed hard money before, Intrust is an investment company created by investors. So a hard money company, created for investors by investors. And so they understand the pains and troubles when it comes to borrowing your money, especially on the draws, because a lot of companies out there right now you have to get somebody on site to be able to figure out if you need a construction draw or not. They can take days, sometimes longer than days, and so you’re stuck to be able to pay your construction bills and so forth. It can really throw back your entire project, even get people leaving. But, before we go into that more, are those original windows?
Will Heaton:
Yeah, so that that was one of the other really cool things is this house has the original glass windows, stained glass windows throughout it, and, you know, while everybody wants double pane windows, I think the value of this is the really unique detail, makes this house special. Where a lot of homes, you walk into it and it’s like, oh a flipper came in and fully remodeled, studs out, windows new, paint new, carpet new, cabinets, everything, but they rip the charm out of it. Right? So I see the charm in this house as a value add. A home like this is going to sell for more than a home that just had all of the original, unique details torn out of it. So, you know, while it did take us a little bit of work to preserve it, it’s going to pay off in the end.
Tarl Yarber:
Man, that’s like way more attention to detail than what we’re used to in our stuff, because we would be the home of the Fix and Flip guys who are like, “Rip it out! Let’s put in double pane vinyl windows, they’re good to go,” which for us we don’t have the systems to be able to do what you’re doing here, which is awesome, or the time of the details on it, which I love. And that’s part of what you guys have done with even Heaton Dainard, is just be able to have those systemized processes and project managers and everything else on top of it to be able to run projects like this too.
Will Heaton:
Yeah, and you have to have, you know, the right team, the right realtor on your side. I mean, you wouldn’t want to go do this in East Tacoma, right? I mean, you’re not going to get paid for the work, right? You come do this sort of work in a neighborhood like, you know, Mount Baker, or you know, four houses away from the water, and your buyer is going to be a second or third home buyer who’s had some experience and has some appreciation for this stuff. They’re going to pay for it.
Tarl Yarber:
Yep! Now let’s go check out the upstairs because there’s some sweet-ass master suites up there.
…
So let’s look at that. Is the original?
Will Heaton:
This is actually a brick tile. This is the fireplace.
Tarl Yarber:
So Nate come look at this. If you guys want to see, this is this is original. So is this all original too or no?
Will Heaton:
No, that’s new. That’s just reproducing the charm of a home from this era.
Tarl Yarber:
Let’s go upstairs. So you guys, these are the original stairs.
Will Heaton:
These are the original stairs, original railing, original pickets. Really unique details, very difficult to reproduce something like this. So we took this apart, individually numbered every one of these pickets so they could refinish the floors all the way through and then reassemble this and put it back together.
Tarl Yarber:
All right, let’s get inside the shower together.
Will Heaton:
Yeah. Is this new or old tile?
Tarl Yarber:
I was in the shower with your business partner Jimmy the other day and so I….
This is new old tile, right?
Will Heaton:
Yeah, they buy it. They throw in a bag and they beat it up and I’ll show ya—
Tarl Yarber:
This is good stuff. So why do people like this old tile? I don’t understand.
Will Heaton:
It’s just gives the charm of the old house.
Tarl Yarber:
Well, let’s go inside over here. Yeah, so Master Suite. So these are new windows for sure. And then the look at the view; check it out. That is a good time to sell, everything started to bloom. So, Will and I would like to go to showers some more, so come out to this shower as well. So the cool ass master’s closet, and this is originally built this way, but this bathroom wasn’t original.
Will Heaton:
Yeah so these are original floors, all this is, the original doors, these are original door handles just all repainted.
Tarl Yarber:
And if you guys would think that it would be cheaper to keep everything right? It’d be cheaper to just rip this all out instead of keeping it. We’ve done that. We’re like, oh, let’s save some money and then just like keep the doors. But if these are all beat up, you have to sand them down and make it nice and do a lot of stuff. Do you think it would have been more cost-effective for you to just like gut the house and redo it, versus trying to keep everything or not?
Will Heaton:
I think we’re pretty good and efficient at being able to do what we did here, but I don’t think we saved any money. But I think at the end of the day, the effort and energy we put into it, is going to return us more money on the backside, right? Yes, we could have came in here, stripped this house to the studs. Put all new doors, windows, floors, carpet, thrown some laminate down or some prefinished hardwood over the existing top nail, you know, oak hardwoods. But the end product then is a vanilla, you know, maybe with a little flair, renovation where this comes in and people who have appreciation for this stuff are going to see it as value.
Tarl Yarber:
Sweet, let’s check out this. So this is cool. My wife would absolutely love this bathroom. Right just like, maybe, you know, other people’s weddings or even themselves, but this whole modern thing, this is kind of cool because, what’s it Chip and Joanna, don’t they do like that black tile stuff too, the modern farmhouse kind of look, or—
Will Heaton:
Who’s that?
Tarl Yarber:
I don’t know, I heard their name one time. What’s the fix or flop people?
…
So did Katie pick all this stuff out too?
Will Heaton:
Every little piece of every little thing.
Tarl Yarber:
Look at the tile, that stuff’s cool. So this is the only modern part of the house it seems like.
Will Heaton:
It’s transitional, right? I mean, it’s got a little modern flare. Again, it’s our Euro-cottage right now, so you gotta turn up the volume a little bit somewhere.
Tarl Yarber:
Alright, so not that I want to end this video in the bathroom, but I’m going to end this video in the bathroom so I can get in the bathtub with Will here, because we ended the video, I think, last time with Jimmy, his business partner, in the shower, too. So we’re going to keep doing that. But there’s a trend with Heaton Dainard and Intrust if you guys haven’t noticed. So, Will’s with Intrust, tell us a little bit about how to get a hold of you guys at Intrust or what you could do for these guys.
Will Heaton:
Yeah. We’re looking to finance Real Estate Investors. And again, this is a project that I’ve done. So when we’re looking to do a loan for a borrower, I know what the situation is that they’re sitting in because I’m in the same business, right? And I know when you need a draw, I know what your renovation budget is, I understand that stuff. So we’re able to work with you on the set of reality, not just be a banker behind the desk going, “oh that doesn’t make sense for my spreadsheet.” It’s like, hey, does it make sense in reality? Right? Well, I live this reality every day. So, you know, we’re looking to come in and take care of real estate investors who are buying, fixing, and selling properties, or just need the short-term bridge to get into a deal for a buy and hold, or if you’ve got apartment buildings, or any other commercial assets you need financing for, we can take those too.
Tarl Yarber:
Apartment buildings, that’s awesome! If you’re coming out to the Pacific Northwest Big Badass Real Estate Wealth Expo, you’re going to see him on stage. But we also have a lot of people about apartments talking on stage this year too, last year we didn’t have very many of those. So if you’re buying—I didn’t even know you guys did apartment building financing, that’s pretty awesome—so what I like about working with these guys in the past and specifically is that I know that they live, breathe, sleep this stuff every single day, just like Will has said. I bought from just their counterpart business, Heaton Dainard, probably somewhere between 25 to 30 houses, I don’t even know, over the years, and I know when I get something from them that they’ve vetted it, they’ve looked at it, they trust it, and I trust them. So we’ll see them at the Pacific Northwest Big Badass Real Estate Expo coming up next week, right, and also will see them in future business deals, because that’s what we do, right? So go check them out on IntrustFunding.com.