Lombard Equities Group

We're thrilled to share our final 2024 acquisition - the Grandview Apartments - in Portland, OR. Thanks to our JV Partners Ethos Development LLC, and to Danny Natsch and his team for sourcing the acquisition loan. Additional gratitude to our friends at HFO Investment Real Estate · Member of GREA and Lee Fehrenbacher for helping put the deal together. And thanks to JT Horner and his team at Everbank for the financing. Full write up below. If you're interested in connecting with us regarding future investment opportunities in the vibrant Pacific Northwest, please reach out below. https://lnkd.in/g7AMUUCr

High-level real estate hack: Invest in cities where you CAN'T build. I call it the "bridge and tunnel" cities. Why? Because cities with geographic constraints (rivers, mountains, strict zoning laws) don’t have unlimited space to expand. Take Portland, for instance: Surrounded by rivers and mountains, classic bridge and tunnel city. Then in 2017, Portland’s Inclusionary Housing Ordinance kicked in: Any building with 20+ units must designate 30% as affordable housing. Developers took one look at the math…and stopped building big. On top of that, Portland’s Urban Growth Boundary keeps sprawl in check. Unlike other metros, developers can’t just push out and build on the outskirts. Land stays tight, and prices stay high. So, instead of a 50-unit building, now you’re getting a 19-unit one. Limited supply. Higher prices. Now compare that with Arizona. - No major geographic constraints. - No restrictive policies. As a result, 1) Land is cheap, so developers just keep building. 2) And more supply means your investment depends on constant population growth. Unlimited supply. Lower prices. The key here is simple- "supply and demand". You can’t FIGHT market forces. But you can position yourself where the odds are in your favor.

The latest Substack article drop is available on the Timeless Investor Newsletter. How the Fed "miraculously" creates money, how this process actually works, and why it is a great wealth destroyer. Link in the comments.

Sneak peek at tomorrow’s newsletter: The Mandrake Mechanism. What is it? It’s the magical process by which the Federal Reserve?creates money out of thin air—fueling asset bubbles, devaluing your dollars, and quietly reshaping the global economy. Why does it matter? Because once you understand how this works, you’ll never see the financial system the same way again. It’s one of the?most important (and least understood)?forces in modern economics. The Timeless Investor drops tomorrow at 7 AM PST / 10 AM EST. Subscribe via the link in the comments to get it first.

It's unreal how people say the $$$ is in class A buildings. That class B/C will struggle due to inflation... And low-income tenants would have a hard time. But here's the other side of the narrative:???? White-collar jobs are actually at serious RISK due to AI. The accountant at a Big 4 firm making $150K a year, living in your fancy Class A apartment in Arizona, might be jobless in 5 years. The same goes for lawyers, consultants, and financial analysts. The societal impact of AI on white-collar employment concerns me MUCH more than its effect on blue-collar jobs. Meanwhile, your Class B/C tenants... Plumbers, electricians, HVAC techs, will still be working. Because AI can’t fix a busted pipe. It can’t rewire a house. It can’t install an AC unit in 100-degree heat. So remind me again, which tenants are actually at risk? ------ UPDATE: Right now, we’re in contract on a class B/C deal. It’s a vintage brick asset in core Seattle, in a fantastic location, at a 7.6% going-in cap rate, and high cash flow returns with long-term debt on it. Interested to learn more? Join our investor list to get notified about this offering: https://lnkd.in/eGmq6ZK9

Unpopular opinion about making "serious" money: The crowd is ALWAYS early, late, or wrong. Meet any investor worth $10M, $50M, $100M+... And you'll notice a pattern. They often look for what’s hated or ignored, then dig deeper. 1) Bitcoin in 2012: When it was just a toy for tech geeks, you could buy Bitcoin for $12. Even if you sold at the “crash” in 2017, you’d have made over 100x your money. 2) NYC multifamily in 2020: Everyone swore, “New York is dead.” U-Haul prices to Florida hit all-time highs. Landlords were throwing in 3 months of free rent and a Peloton just to get tenants to stay. Investors who bought then? They’re now sitting on properties that have bounced back 30%+ in value, with rents at all-time highs. 3) Suburban offices in 2020: Twitter was flooded with remote work gurus saying “Offices are done.” Some landlords panicked and sold for 50 cents on the dollar. The smart money scooped them up, converted them into medical spaces, and are now flipping them for 40%+ gains. That's really how it works. If everyone loves the trade, I DON'T want it... Because by the time your Uber driver is giving you stock tips, the easy money is gone.

A painful but eye-opening truth: More investors go BROKE in real estate than get rich. Survivorship bias is a real issue here. Let's take the COVID real estate book, for instance, A lot of investors thought they were geniuses during the COVID real estate boom. They bet big on endless population growth, inbound "Zoom State" migration, and perpetually low cap rates. Now? Many of those deals are bleeding out. Why? Because they didn’t account for the downside. 1) They ignored the liquidity trap (being asset-rich but cash-poor). 2) They assumed rents would always go up. 3) They took on cheap, floating-rate debt... right before rates skyrocketed. This has happened before. It wrecked some of the biggest names in history. One of them? Samuel Insull. ????He was once worth $3 billion (in today’s money).? ????Controlled 85% of the electricity market.? ????Built entire blocks of Chicago. Then? He lost everything. Fled to Greece to escape prosecution. Died broke... (literally - $1,000 dollars to his name and $14,000 in debt) Why? He was too leveraged. When banks pulled back, he couldn’t access credit. He owned valuable assets, but couldn’t liquidate them in time. This happens more often than people realize. Yes, real estate is a fantastic way to build generational wealth. But it’s also a fantastic way to go broke. If you don't know the risks. P.S. In today's newsletter, I break down 5 hidden risks investors ignore (and how to plan for them) Subscribe here to our substack for the full article release --> https://lnkd.in/g69UrnjF

Happy Persian New Year to all! Nowruz Mubarak! Have a fresh and invigorated new year. ??

The battle over central banking in America started long before the Federal Reserve—it began with Alexander Hamilton. This week, I’m breaking down the birth (and death) of the First U.S. Central Bank and why this fight never really ended. I’m also migrating all my long-form finance and history deep dives to Substack, so if you’ve been following along, the good stuff is happening now. ?? Read the latest & subscribe here: https://lnkd.in/gnczzs2Q

Just produced the first investment yield on this property. 13.8% ‘annualized’ yield on this "class B/C" vintage property in Portland. We acquired this in 2024. 1) $95,000 per door. 2) 9%+ cap rate (substantially better than market). We got it in times where true value-add plays were getting tougher to find. At acquisition, the property was 85% occupied. We knew we could fix that. So: 1) We took control of the management team PRIOR to closing. 2) Tightened operations. 3) And brought occupancy to 100% by the closing date. And this is now getting us a strong 10%+ cash yield to investors right out of the gate. With even more upside ahead. Sure, new Class A apartments are nice. But it’s the overlooked, vintage Class B & C properties with a faded sign out front… That are quietly printing CASH. Especially the ones that fall in our vintage investment bucket. Crazy how very few people see the potential in these deals. --------- UPDATE: Right now, we’re in contract on a similar deal. It’s a vintage brick asset in core Seattle, in a fantastic location, at a 7.6% going-in cap rate, and high cash flow returns with long-term debt on it. Interested to learn more? Join our investor list to get notified about this offering: https://lnkd.in/eGmq6ZK9