Rudolph Companies

Self Storage Owner/Operator | Real Estate Private Equity. Tweets are opinions of one of the two dudes in the profile picture

[Rudolph Companies @Rudolph_Cos]

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?

[Rudolph Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

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.

[Rudolph Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

@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)

[Rudolph Companies @Rudolph_Cos]

@mhp_guy How did you underwriting insurance?

Insurance has been brutal the last few years in LA.

https://t.co/SsD6WEN4Vv

[Rudolph Companies @Rudolph_Cos]

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.

[Rudolph Companies @Rudolph_Cos]

Truth

[Keith Wasserman @Keith_Wasserman]

The time to put money out is when there is fear and uncertainty. Right now in commercial real estate you can slice the fear with a knife it’s so palpable. This is when fortunes are made.

[Rudolph Companies @Rudolph_Cos]

@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)

[Rudolph Companies @Rudolph_Cos]

@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

[Rudolph Companies @Rudolph_Cos]

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.

[Rudolph Companies @Rudolph_Cos]

@philiphartz Love to see it when it does!!

[Rudolph Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

@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 Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

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

[Rudolph Companies @Rudolph_Cos]

@robbiehendricks @multifamilyman_ What he said^

[Rudolph Companies @Rudolph_Cos]

@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

[Rudolph Companies @Rudolph_Cos]

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