Robbie Hendricks

@seandsweeney I bet brother!

@robbiehendricks It was honestly one of the cooler things I’ve experienced. Talking to people who gave me money who I haven’t repaid a dime to who trust me enough to give me even more money. Pretty special. Sending out that Q1 distribution on Hillcrest to those folks felt great!

My $0.02 on the GP bashing right now. Every GP in the game is going to have a tough deal or two or three over the course of a long career. Almost inevitable because this is investing. There are no guarantees. But being non-communicative, and worst dishonest, is what riles people up. I have a deal under water right now. Those LPs have been reminded of that every quarter for the past two years. We might have to do a capital call eventually. Not sure yet. I personally don’t think you can bash GPs for a bad deal or two because it happens, but if you hide it or lie about it to your LPs you should be kicked out of the game.

@seandsweeney That’s why your reputation is strong, no doubt. I tell people about our slow deal too. It’s not too bad (5% cash on cash for LPs), but it is behind on pro forma.

And not toot my own horn, but because I value honesty and transparency, when we were raising money for Hillcrest in November and December, I pretty much told everybody that I talked to about what was going on at this property. We even have people that are in both so I take that as a huge sign of support!

@RossLeavitt1 @resetbasis I don’t know if he took the disposition fee - but if he did - that would egregious, and I’d guess he’d get sued for it.

@resetbasis @robbiehendricks Did he take the sale fee? Was he planning to take the refi fee on the loan that fell through? He didn't say anything about waiving those fees? Also, did the 2% refi fee factor into his decision to get a 4-year loan initially? That's some pretty sweet recurring revenue.

I’d like to give Brandon Turner sincere credit for this post on IG. He fully owned up to the loss of LP capital publicly. Explained his responsibility, which is the most important, along with the market factors the affected the downfall of this deal. This is exactly how a sponsor should transparently communicate when something like this happens. It doesn’t make the loss of capital easier, but I have true respect for people that take ownership. The guru class has butchered the handling of their errors over the past 5 years. Brandon is the first one I’ve seen to step forward and address it. Credit where credit is due. Bravo.

@RossHartman4 @resetbasis You could totally be right. I do think, to your point, that Disrupt found a perfect capital raiser in Brandon…and it wouldn’t surprise me if they sold him good on these deals.

@resetbasis @robbiehendricks I’m also not buying the “playing dumb” on his (lack of) knowledge on how floating rate caps work. Did he not read the loan docs / credit agreement? Or did he /ODC put too much faith into Disrupt Equity, letting them drive most of these deals…

@seandsweeney Part of the gig. Development is not for the faint of heart.

Hard to finish construction in late 2023 and not be underwater. Even when you win new development of the year :) The property has been operating super well…Leased up ahead of schedule and consistently 95% occupied, but expenses ran on us in this market and obviously our floating rate construction debt is an issue.

@CarolWalshReal1 Solid point Carol.

I think it's important to reflect on the fact that we have a bankruptcy system in this country because we encourage people to take risk and know they can start over. But that doesn't mean there aren't other people that are going to get hurt in that process. At the end of the day if you conduct yourself honorably and you still lose you can start again. But unfortunately you can also conduct yourself like a total sleeze bag and also receive the same forgiveness. That is the price of the system we have.

After all the talk about real estate deals gone bad over the past few days, I’m reminded of Hanlon’s Razor: "Never attribute to malice that which is adequately explained by stupidity."

@skylarromines @RobertMSterling Beautiful thing you’re doing here.

If you are like me & never served, highly recommend taking a day to clean headstones at a national cemetery. They largely depend on volunteers for maintenance. One of the best ways I’ve found to knock yourself over the head with perspective real quick.

It bums me out, really. Again, I’m not a Turner apologist and somehow I’ve been twisted into some guy that’s forgiving him - which his not true. I simply tipped my cap to the honesty, because so few of the guru class ever do it. Look, I’m a GP. I saw what these guys were doing during the run-up and it was absurd. We talked about it in the office, we knew they were going to lose everyone’s money. It was right there on paper. But I still struggle to believe that someone with his reputation, someone with so much to lose, would purposely and maliciously rob people. Did he willfully look the other way, or convince himself that rates were going to stay at 0% forever and rent would grow 8% annually forever? Maybe. Hell if I know. But this was at a time in our society where people were paying $5 million for jpegs. The collective FOMO was insane.

@robbiehendricks Yup, social media has made anything not cussing someone out as "defending" or "supporting" them. Sad and bad for the overall discourse... can actually discourage truthful people from appropriate disclosures.

@seandsweeney Also, respect to you for addressing a rough deal you have.

@robbiehendricks My apologies.

@jw_hou Most LPs had just as much FOMO as the GPs, sadly.

Things were so hot in 2020-22 from the crazy run up from the excessive rate cuts many people took their eyes off the ball. All FOMO $$. If most investors read the partnership documents they would have probably skipped the many of the offerings. 2010-2020 was the easiest run ever imo, you could throw a dart and make $$$.

@CarolWalshReal1 @CRE2BTC He’s in a very bad position, no question there.

@CRE2BTC @robbiehendricks That honestly made me sad because he seems to be genuinely not able to understand he's absolutely f*****.

@CinPrivateFunds @Codie_Sanchez Let’s go.

@robbiehendricks @Codie_Sanchez Abundance and collaboration are mindsets of wealth creation. Schadenfreude and envy are attitudes of decline. Choose your allies and enemies accordingly.

You’ll be 10x more successful if you stay far away from those who celebrate when people lose. Only losers pile on when someone tries and fails.

I just wish people would step back and at least leave a little bit of room for nuance in the discussion. By no means am I defending Brandon Turner or the decisions they made on these deals. But to automatically assume he was a malicious fraud, purposely stealing from people without regard for the consequences? Boy, that’s a reach IMO.

Well said. People’s reaction to this is very enlightening. I tend to think we’re all adults and it’s our job to do our due diligence. If Brandon didn’t know what he was doing, sure he needs to take accountability. But the people who invested are, in many ways, making the same mistake Brandon made.

@augustagarei @BeardyBrandon Critiquing BT and Disrupt is fine. They made egregious mistakes. I critiqued him plenty. But can there not be any nuance on X? Do we have to automatically assume the guy was purposely and maliciously trying to defraud people? Boy, that’s a big accusation.

The celebration of @BeardyBrandon losing 15 million of investor money on a bad deal is weird. One thing I have noticed though is that a lot of the top tier professionals (@robbiehendricks and others) are not piling on. A lot of the guys who want to be like Robbie and others are piling on….. @sweatystartup shared a great article about crabs that feels extremely accurate for what is going on….. There is a lesson to be learned here I’m sure.

The fact that he didn’t understand rate caps is a huge, awful admission of ignorance, for example. I can’t imagine taking on hundreds of millions of debt and not understanding the capital stack. Do we think he purposely, willfully ignored that in order to get fees? Maybe he did. But I don’t think he was willing to nuke his reputation or career for this. He had too much to lose by being a premeditated fraudster. As such, I err to thinking he was simply woefully ignorant to what he was doing.

Yo - I don’t know Brandon, but I can’t imagine he raised all of this capital knowing he was going to lose everyone’s money and didn’t care. I don’t think this was some premeditated grand theft. That would be malicious. Malicious is an intent to harm others. Based upon many posts he’s made - I think he did not understand what he was doing. The word fraud is strong, but he clearly didn’t understand the risks he was taking. Just my opinion. Fact is, He didn’t have any multifamily experience and had no business doing what he did. I am directly calling him wrong and absolutely egregious errors were made. But I do not believe he was trying to harm anyone. We can agree to disagree on it. If folks think I’m ignorant, I’m okay with that.

All the grave dancers on the people losing money in real estate need to read this.

@TheRickCarlson At least the free market does tend to filter out the unqualified. It’s a bummer common LPs often are the ones that pay the tab, but they also need to look in the mirror and not just give capital way to the first pretty deck they come across.

@robbiehendricks There’s a guy in my local market who was putting together deals that made ZERO SENSE and yet somehow people gave him money. He called me for a check and I could t run fast enough. I couldn’t make one of his deals pencil and he’s quietly gone away.

@live_free_603 Hubris gets the best of good people all the time.

@robbiehendricks This is generally my go to. Most people are just very stupid, myself included. “Know thyself”

@investandcreate @resetbasis Especially with the deal sizes we are talking about here.

@resetbasis @robbiehendricks That be a lot of fees