Rudolph Companies

Scenario: I purchased a CO deal in late 2022 all cash. The property is almost stabilized but the CC portion of the property has been stabilized for over a year. NOI from May 2024 was $11.9k (~$142k annualized). I want to add another ~10k sf of CC to the property which will cost ~$500k. Cash on hand for the property is ~100k. Question: What would you do in this situation? Take out construction/bridge loan to expand the property and refi into permanent debt once the expanded portion stabilizes?

@TeamYouTube @investingcre I am concerned this won’t be available on or before August 31st

@investingcre ofc! lmk if you have other concerns

Disappointed YouTube TV doesn’t have the split screen option for game 7 and college World Series. Forced me to bust out the second TV like it’s Saturday in the fall.

@BHuff5 LA doesn’t do itself any favors w/ current legislation

I'm always sent deals around Louisiana—after all, it's where I live. But let me tell you, the last two years have been a no-go for us. Why? One word: insurance. Below is a small sample size of insurance costs for 2 of our properties (no claims filed, mind you). From 2021 to 2023, the premiums have shot up by +243% and +171%. It's making it tough to justify any new acquisitions.

@investingcre 2024 is supposed to be relatively flat, which is good. Problem is that the current rates are the new normal

@Rudolph_Cos Absolutely brutal. Makes some of our FL increases seem reasonable. So far the ‘24 renewal increases are no where near prior years.

@flywheelinv I have not but I do know that if there is ever a reversal in the trend, it will be much more gradual. There aren't enough carriers in the state to make the insurance market competitive (this is especially true for commercial)

@mhp_guy How did you underwriting insurance? Insurance has been brutal the last few years in LA. x.com/Rudolph_Cos/st…

We're under contract to buy an $8m Louisiana RV park. The owner spent $9,500 each to add these covers to shade some pad sites. Covered sites are $1,150/month. Without a cover it's $670/month. Payback period is 19 months. You better believe we'll be adding more of these!

Truth

@ChrisRamsey60 I’ll give you the same advice my grandfather gave me (he played professionally and then coached an SEC college golf team): Swing hard just in case you hit it (the ball)

Taking a golf lesson this morning. I have literally never hit a golf ball before 😨

@hunterjones @ZachQuick12 It's very hard to project. We usually just take what we paid the prior year and just increase that amount by a certain percentage

@ZachQuick12 @Rudolph_Cos If you owe less than $5k for the year you can pay it all for the previous year in March. Otherwise you pay estimated quarterly through the year and do a best guess based on your financials. IME it’s never fully accurate and tough to get right.

We have 4 investments in the state of TN and in TN, business are subject to Franchise & Excise Tax. The Franchise Tax, portion that affects our TN investments, is calculated on the greater of net worth or real/tangible property value in Tennessee (per TN Department of Revenue). Since 2021, across four different entities, we've paid $89,717 to this tax. But thanks to the recent passage of Senate Bill 2103, we are set to receive $77,204 in refunds later this month. (For info, Google TN Department of Revenue Notice 24-05 and click on the 1st link) Did we see this coming? Not at all. Was it luck? Definitely. Have we been eagle-eyed on this since April? Absolutely. Bottom line: Investors in our TN investments are going to get extra sprinkles on those monthly distributions in July.

@philiphartz Love to see it when it does!!

@Rudolph_Cos The govt taketh and the govt giveth back...that's something you don't see very often!

@hunterjones Monitoring the status of each refund is just as painful as filing the refund but well worth it

@Rudolph_Cos Yep. We’re going through it now. Unfortunately about 1/3 of our refund will be eaten by filing costs due to us having lower franchise tax and more LLCs

@hunterjones Absolutely Bet a lot of sponsors have no clue that they can file for a refund I will say that the process of filing for a refund is like everything else when dealing w/ governments, a pain in the ass

@Rudolph_Cos The amount of first time out of state buyers that get surprised by F&E is high.

If you see the use of a cumulative number for years of experience, run, don’t walk away

Nothing, and I mean nothing, will teach you humility like flying with a 1-2 year old

@robbiehendricks @multifamilyman_ What he said^

The problem with all these entrepreneur influencers is they don't realize what business they're actually in. Especially if they are breaking into REPE. REPE is really two different companies: - Operations - Investment Management True entrepreneurs are built to be in the operations game. They can tinker and fix problems. They can optimize and grind their way to a good spot. But the investment management business is completely different. You can't just hustle your way into savvy, well thought out capital structures. It requires being a student of the game. Knowing the history of your business and understanding risk and psychology. IM is not designed for "move fast and break things". As a steward of capital, your tasked with making a handful of very important decisions through the life of your deal rather than day-to-day fires. Decisions like - how much debt should we take on, what type? What is a good relative basis to buy? How much reserves should we raise? What is a realistic downside.... are we protected? Is our equity protected from liability? Even more, knowing why you're making these decisions. Because it's not gut. Lots of PE groups are in trouble right now. Lots... not all. There are many groups who opted to not buy during the craze. Or who did, but decided not to take 80% debt. They understood a 5% debt yield was insane relative to historical norms, though normal then. That's the student part. You aren't born with this knowledge in a way some people are natural sales folks. You have to learn, and it takes years. Even decades. At the end of the day, PE of all kinds is just one of a million options for equity to call home. All the equity wiped away right now is primarily froth. Its tech money, abnormal home appreciation, bubblesque exits. It never existed in the first place. All fugazi. Everything is just returning back to homeostasis, as it always does.

@EdelkopfYossi A good friend owns a large regional pest control company. One time I asked him what they do (as in what pest the treat). He took it to mean what they literally do and his response was priceless “We kill bugs but not all the bugs” with a big smile on his face

The larger the pest control company, the less capable they are of actually killing bugs.

@investing_law Just different profit splits on tier 2 (capital event - sale/refi) of the waterfall

@Rudolph_Cos Just different profits splits or other differences too?

GPs: Raise your minimum investment amount. 📈 Many LPs will invest the minimum amount. 💵If your minimum is $100k, you'll get a ton of $100k checks. 💵Raise it to $250k, you'll get a bunch of $250k checks. And you can still accept those $100k checks in your discretion. It's typically up to the GP.