Today, I welcome Elliot Horowitz to the show.
Elliot spent the first 15 years of his career rising the ranks on Wall Street. After deciding the corporate world wasn’t for him, he quit his comfortable job to start his own real estate finance company, H Equities.
Elliot opens up about his career, including his 12-hour days on the trading floor, and how he was able to take the leap and start his own company. He gives his advice to young adults who are nervous about which industry they should enter, and we highlight the difference between the corporate and entrepreneurial world.
Enjoy!
Transcript:
Victor M. Braca: Hi everybody, welcome back to Momentum, the podcast where we sit down with interesting and successful community members in order to have conversations that will inspire and empower the next generation of our community’s leaders. I’m your host, Victor M. Braca, and I just wrapped up an amazing conversation with Elliot Horowitz. Elliot is the founder at H Equities, a private real estate lender and investor based in Brooklyn. We spoke about Elliot’s early days, including his time on Wall Street as a trader and a broker, how he transitioned from decades in the corporate world to starting his own company, and the one crucial thing he says young adults must have if they want to become successful. This was a great conversation. I hope you enjoy.
Elliot, welcome. Welcome to the show.
Elliot Horowitz: All right, thank you so much, Victor. Thanks for having me.
Victor M. Braca: Very excited to have you.
Elliot Horowitz: Great to be here. And we actually had to finish waiting for the gardeners to finish. But you should really get the gardener’s schedule, is what I’m saying.
Victor M. Braca: Yes, I think when I have a seat on the Long Branch City Council…
Elliot Horowitz: I like it, I like it.
Victor M. Braca: Yeah, I think as you said, I’ll have the pull there. And you’ll have pull.
Elliot Horowitz: I have the pull, and then we’ll be able to control the studio. You know, prime. By the way, it’s a great studio. It’s fantastic.
Victor M. Braca: Thank God. Yeah, so we do have to work with what God gives us. If we have rain, if we have… he’s giving us a breeze now. Let’s get a little breeze.
Elliot Horowitz: Yeah, feels like… I think like they said, feels like 95 or something. I don’t know, something crazy.
Victor M. Braca: But for those who don’t know you, how do you explain what you do?
Elliot Horowitz: So we’re in the real estate business. We have a debt and equity business. We invest in apartment buildings and medical office buildings, and those buildings are in different states: New York, New Jersey, Atlanta, North Carolina, and Philadelphia. And the medical office properties are specifically in New Jersey. That’s one business.
And the other business is we have a debt business. We lend money on real estate properties. We have three types of lending we do. One is senior mortgages, which is a first mortgage. Then there are second mortgages called mezzanine loans, and something called preferred equity. So we lend on properties, and we lend to people who we like a lot as borrowers, and on properties and locations that we like a lot, that we would be in those areas if we could be.
Victor M. Braca: Cool. You work with your family, or…?
Elliot Horowitz: So it’s me, and then I have various partners. Some within the community, some outside of the community that we partner up specifically in the debt business. I have one partner in the community, which is great, and then outside the community we have various partners we invest with in the equity in the apartment buildings. And the medical office is also within the community.
Victor M. Braca: Got it. So are they… you say you have two separate businesses, are they under the same umbrella?
Elliot Horowitz: Same umbrella company. Same umbrella, H Equities. I just have two different verticals where I can invest.
Victor M. Braca: Cool, nice. Okay, cool. So I want to get into your early days, how you got into this. How long have you been doing this specifically?
Elliot Horowitz: So the company is in business seven years.
Victor M. Braca: Okay, so fairly recent.
Elliot Horowitz: Recent. I’ve been in the real estate business probably 11 years, 12 years. Preceding that, I was in the stock market as a broker and a trader for a very long time. Then I morphed out of that and I got into the real estate business because I just knew a lot of people in the real estate business, so I figured it was a natural progression. I was a broker for property and for finance. I worked at a bank, I worked for developers, and then when I turned, I guess 49—maybe it’s almost 10 years, 48, 49—I decided to start my own company.
Victor M. Braca: Nice. Okay, cool. And was that decision to start your own company… I’m assuming you felt ready to do it after all of your 20, 30 years of experience at that point?
Elliot Horowitz: So it was sort of based on need, right? Because I found that in the corporate world—which, I was entrepreneurial for a long time, I went to the corporate world, I exited the corporate world—I found the corporate world just wasn’t for me, and the entrepreneurial way was better suited for me.
Victor M. Braca: I’m interested in that, because some people associate business as corporate, entrepreneurship, and everything else that comes with it. But I find it hard to understand, as somebody who’s entrepreneurial, and also somebody who wants to go into finance in college, I find it hard to grapple with that. How am I going to be an investment banker if I want to start my own company? What do you think about that?
Elliot Horowitz: So I would tell you, not each route is for everybody. You’ll only know once you’re in it. You have to try. So you may go into the corporate world and you may love it. It may be for you. It has the structure, it has the planning, it has the agenda. It may be for you. You may go into the entrepreneurial world and that may be for you. You’ll never really know until you’re in it.
The entrepreneurial world, that’s my world right now. It just works for me. That doesn’t mean the corporate world couldn’t have worked for me under different circumstances, but it didn’t. But I knew when I went into the corporate world, it was by circumstance. It was an opportunity, I took it at that time in my life, I had to do it, and I did it.
But starting out, you’re not really sure what you want to do. Some people think they know what they want to do when they’re 19 or 18, but you don’t really know. Some people might, but you’ll know after you’ve spent some time in it. And maybe you’ll have some insight by speaking to people who have gone through it.
Victor M. Braca: Which is why we’re here, I think.
Elliot Horowitz: Right, and maybe that’ll mold your thinking in some way, shape, or form.
Victor M. Braca: Nice, cool. So when you first started out in the corporate world, like you mentioned, you were always entrepreneurial. Did you also have that inner conflict between entrepreneurship and working in the system, or did that develop later on?
Elliot Horowitz: So it developed, it wasn’t really a conflict, it kind of developed later on. I’m a big believer in not wasting time, and I found sometimes in the corporate world there’s a lot of time waste, a lot of groupthink, bureaucracy…
Victor M. Braca: And a lot of bureaucracy.
Elliot Horowitz: Sometimes, not always. So it was just more of, where do I think my skills or what I think I can do will be the best suited for me? And that’s how it just developed over time. I can’t really cite one specific event. You know, I remember when I was 18 or 19 trying to figure out franchising. I remember sitting and reading about franchising because I felt that was an entrepreneurial thing to do. I never did it, but I thought that was sort of the way to go.
And when I was younger, I was a stockbroker, which, even though you’re in a corporate environment, it’s eat what you kill. If you don’t produce, you don’t make money. So it’s corporate, but you’ve got to produce. So it just sort of naturally flowed, I think.
Victor M. Braca: Following college, you started as a stockbroker right off the bat?
Elliot Horowitz: Following college, I went to a brokerage. And there was a couple years of a learning curve in that, as there usually is. And again, it was corporate but entrepreneurial because, like I said, you had the big structure of the company, but you had to just get out there and hit the phones all day long.
Victor M. Braca: And you have that little autonomy, leeway…
Elliot Horowitz: You had the autonomy, because if you’re not in the office at 7:00 in the morning and there at 8:00 at night, you’re not going to make money. So you had to really do that. If you wanted to be nine-to-five, you could, but at that particular point, you probably wouldn’t have made it. You’d fall behind, because your peers were making 300, 400, 500 phone calls a day. If you were making 150 phone calls a day, unless you had some magic touch, you weren’t going to get there. So you sort of had to have that entrepreneurial urge to get out there and keep going, no matter what time it was at night or what time it was in the morning.
Victor M. Braca: You have to have the drive, or else…
Elliot Horowitz: You have to have the drive. If you didn’t have the drive, you’re not going to make it.
Victor M. Braca: Right. It sounds like—I mean, correct me if I’m wrong—you ever watched The Wolf of Wall Street?
Elliot Horowitz: Yeah, I knew the Wolf of Wall Street, of course. I knew that company well back then.
Victor M. Braca: It sounds like it was a similar environment? Very fast-paced.
Elliot Horowitz: It was fast-paced, but not corrupt. As you know from the movie, it was a sort of corrupt depiction.
Victor M. Braca: And dramatized a little bit.
Elliot Horowitz: Dramatized a little bit, right. So it was a very fast-paced environment. You had to be on the phones all day long, and you had to have an understanding of what you were trying to get investors to come in with. If you wanted to take a break, you could. You weren’t chained to your desk. If you wanted to eat lunch, you could go eat lunch.
But when I went to the trading business, not the brokerage business, you really were chained to your desk all day long. So that was a different type. There was the brokerage business, then there was the actual trading business handling clients that traded aggressively on a day-to-day basis. So it was two different things, but you just had to know you weren’t clocking in and clocking out.
Victor M. Braca: So when you were in the brokerage business, does that job, that business, still exist the way it did then on Wall Street?
Elliot Horowitz: I’m not really sure. I think it does to some degree, but then again, a lot of it must have been automated. Then, nothing was automated. It was all rote. You wrote it down, you clocked it, you gave it to somebody to type in.
Victor M. Braca: To where we are now.
Elliot Horowitz: Exactly. It would be very different today, but I think it would be the same premise that if you’re not on the phones all day long, you’re not talking to investors, you’re not going to be producing.
Victor M. Braca: So we took that little gardening break and now we’re back. Hopefully they won’t come back, but whatever, we’ve got to work with them. So you’re in the brokerage business, right on Wall Street, and we just mentioned that the job as it was then probably is not the same, or there may be similarities.
Elliot Horowitz: I just really couldn’t tell you, because I’m not in the business anymore, but there have to be some, I’m sure. I would imagine there are some similarities today.
Victor M. Braca: So as a broker, you’re calling people up, and are you pitching investments, or what’s your primary day-to-day?
Elliot Horowitz: So then the primary day-to-day was calling potential investors, explaining to them what you do, qualifying them to make sure that you’re bringing them ideas that they’re interested in and they can actually execute. And you’d probably make an easy 300 phone calls in a given day, if not 500.
Victor M. Braca: Wow.
Elliot Horowitz: Out of those 300 to 500, if you spoke to 20 people, it was a lot. If you then got three leads, it was a good day. If you got five, it was amazing. I’m just sort of rounding a little bit, but if you had five leads a day, and that was 25 a week, and that’s 100 a month, you might have three, four real clients after that. Maybe five or six. I don’t know the exact math, but that was sort of the rough numbers behind it. You had to just call, unless you had 100 people you knew who just wanted to give you money every minute. It doesn’t always work that way. But that was sort of the essence behind what that was.
Victor M. Braca: And you maintained these relationships with these clients?
Elliot Horowitz: I maintained them with some of them almost 35 years later. I still have some relationships in the real estate business.
Victor M. Braca: Cool. So you’re trying to get leads at like a 0.1% success rate, if that.
Elliot Horowitz: Which doesn’t work for the corporate-minded individual. They can’t handle the failure rate, because it’s not really a failure rate, it’s a small success rate. But that’s what it is.
Victor M. Braca: How did you deal with that?
Elliot Horowitz: I have a high pain tolerance. I understood the math. I understood that you had to be there every day calling, and taking the calls, and making the pitch, and explaining it to people, and walking them through it, and owning up to things that may not work right. You have to be doing that every day. And if you weren’t willing to do that 10, 12 hours a day, you weren’t going to make it.
Victor M. Braca: And that’s how you stand out in that business.
Elliot Horowitz: In that business you have to. Unless you have some magic potion, you have to really put the time in.
Victor M. Braca: I mean, that’s a lesson that you could take to any business.
Elliot Horowitz: Yeah, if you’re not going to put the time in, the odds are someone else will and the success will probably go their way.
Victor M. Braca: So after you’re in the brokerage business for how long, approximately?
Elliot Horowitz: I think it was a 15-year stint on Wall Street.
Victor M. Braca: Got it. And then you go into trading?
Elliot Horowitz: Well, that was part of it. Trading was part of the brokerage. So the brokerage morphed into trading, and the difference was the brokerage business was more toward retail-oriented investors who had other businesses. They were in the Garment Center, they were doctors, lawyers, whatever, and they wanted to invest their money in the stock market. The trading business was geared up more toward professional day traders who traded their money in the stock market on a daily basis. They were in and out every day, 200 and some odd days a year that the market was open. That was that business.
Victor M. Braca: And they’re trying to capitalize on small movements and all the mid-term movements.
Elliot Horowitz: That was a very intense business because we ate down to the second at that point. That was down to the second, to the minute. We had three phones going at once, 18 different computer monitors, people yelling, screaming. It was almost like kindergarten to some degree, but it was a very high-powered, high-pressured environment at a trading desk. And we really never had time to go to lunch. Forget about taking two hours off to get a haircut or do a podcast, it didn’t happen because the market was open at 9:30 to 4:00.
But your day started at 7:00 a.m. because you had to check the research, do the research, check the trades from the day before, make sure things were right, get your best clients on the line, take the phone calls, handle problems. So you had a two and a half to three-hour window in the morning before the market opened. And once the market opened, you couldn’t go back and figure out what yesterday’s problem was. And if yesterday’s problem came up, you had to get somebody to do it for you because you couldn’t leave your trading desk. You had to sit there and take the phone calls.
So we used to trade on that desk… I personally traded a couple hundred million shares a year at the time, it was incredible. Billions of shares a year we traded on that desk for clients in the house account. And there was no such thing as going to lunch. You ordered lunch in, it came to the desk, you ate it in like five seconds, and that was what it was. But that was entrepreneurial in the sense you have to be willing to sit there all day, grind it out from 7:00 in the morning. And the market closed at 4:00, but you were still there at 5:30. Maybe in the later part of my career on Wall Street I was able to leave at like 4:15, let’s say, because I figured out a way to get that work done elsewhere, but you were there all day too. It was a very stressful, minute-to-minute, transactional environment.
Victor M. Braca: You’re in the trading business, you’re trading tens of thousands of shares at a time in order to capitalize on small price increases.
Elliot Horowitz: Correct. So the goal was, whether we were trading for the firm account or for investor accounts, the goal was to capture these short-term movements. Now, short-term could have meant five minutes or three days, it sort of depends on that particular investor’s risk appetite. But our phones were ringing all day long with buy/sell orders. You had to get them all right. If you got them wrong, it was called an error, and there was actually an error account on Wall Street, so you were almost expected to make mistakes, which is also what entrepreneurs like.
So there was an account called an error account. If you bought something instead of sold something and you realized it, you put that trade in the error account, you reversed it, got out of it. It didn’t matter if you had a loss because you were expected to have an error account. That’s why there was an actually established account. But there was very active buying and selling from the minute the market opened till the minute it closed, and you had to be able to calculate in your head and keep track of everything, where you were in those orders. Of course you had it on paper at the time, you wrote everything down in a buy/sell pad, which probably doesn’t exist today, but you wrote it down and you kept track of it. You had to just always know which orders you were working. You would have multiple orders for multiple clients on different stocks buying, selling, sometimes you’re buying and selling the same stock, sometimes you’re buying and selling different stocks, you were shorting stocks. It was very intense, minute to minute, which produced a lot of stress. I used to answer the phone—you used to have home telephones on a wall—I would answer the phone at home “trading,” because I answered the phone “trading” 3,500 times a day.
Victor M. Braca: Wow.
Elliot Horowitz: So I’d go home, I would go “trading.” Which obviously I shouldn’t be answering “trading” at home, but I did that all the time.
Victor M. Braca: That’s funny. So those five-minute, really short-term trades, are they rooted in research specifics about the company? Is that just the market doing its thing?
Elliot Horowitz: Those short-term trades were specifically following the short-term momentum in the stock. So there were certain stocks at the time on any given day that were acting stronger than the market, and certain stocks at the time on any given day would be weaker than the market. And what good traders would do is they would try to capitalize on that discrepancy. So they would try to figure out—and most of it wasn’t five minutes, but there were a lot of five-minute traders, as technology developed more and more the scalping of the five to six minute hold frame or two, three minutes even became more prevalent.
But as the day wore on, you could see what stocks had more momentum than others, what stocks had less momentum than others. So good, sharp traders who would read the tape, which is what it was called, would understand that and try to profit from that. And of course you don’t make money every day. I mean, the best traders would make money 35% of the time, I think, or 40% of the time, but their losses were quick. They were in and out quick. They took losses and those wins covered the losses.
Victor M. Braca: And the wins would theoretically cover your losses in full?
Elliot Horowitz: Ideally, by more. But it was intense because you knew you were going to have losses, which entrepreneurs can take, and you had to stomach watching the number go down. The saying was, if you can’t lose $50,000 in a day, you can’t make $50,000 in a day. And that was sort of the saying, because there’s no way, it’s impossible.
Victor M. Braca: You see your account dwindle, you get nervous, you get stomach pain. How do you block your emotion from getting in the way of controlling your trades?
Elliot Horowitz: It’s not so simple, right? You have to completely detach yourself from the money. So if you have a camera store, let’s say, and a guy comes in and buys three cameras and a calculator, and then he returns the calculator, you don’t typically go, “Oh, I lost the calculator.” But for some reason, when you lose money on a trade, you automatically want to kick yourself. So you have to completely fight the urge to kick yourself when you lose money or talk badly about yourself. In fact, we had a rule in the trading room that if you lost money three days in a row, you couldn’t come in the next day. And if you lost money for the week, you had to take the next week off. There were some—I forget the exact metrics—but the guy who ran the show ran it brilliantly because he believed that once you lost money for a couple days in a row, you’re out of it. You have to just regroup, take a day off or two days or whatever it may be. But you had to be willing to take those losses, which most entrepreneurs in whatever business they’re in, I think, should be willing to take some losses.
Victor M. Braca: And did you find that your office, the floor, was full of entrepreneurial people, or those who wanted to become entrepreneurs?
Elliot Horowitz: There were some corporate people who came over who couldn’t make the switch. Because they were maybe, let’s say, they came from an MBA environment where their thought process mattered, but here your thought process didn’t matter if you weren’t making money. So we had guys in the trading room who probably didn’t finish high school but made a lot of money. A lot of money, because they had an instinct, they had a knack, they had the risk-taking capabilities. We had guys that couldn’t speak English who made a lot of money, broken English, were making a lot of money.
Victor M. Braca: It sounds very high stress, very fast-paced. And I’m assuming that what that taught you carried over into starting your business now.
Elliot Horowitz: So my business now sort of started because I went back into the corporate world later on in life, or midlife let’s say, and it just wasn’t working out. It doesn’t work out for everybody. So I decided, what could I do? I knew a lot of people in real estate and I knew there was a way to put that together, because some people have money and some people have deals, and sometimes the two need to get together. So I figured out a way to put those two together by finding people who are smart, who are honest, ethical—most important thing—and build up those connections. And you build up the connections over many years, decades even in some cases, and you figure out a way to match that up where you bring the money to the deal and the deal to the money.
And some people who are busy running their own businesses don’t know how to invest money. They know their business cold, but they don’t really know how to invest money. They think they do, in some cases they do, but in most cases they don’t. They’re very hyper-focused on their business. So they needed a place to say, “Hey, we can trust these people, let’s put some money with them and hopefully it’ll earn us a return over time.”
Victor M. Braca: And it sounds like you’re putting people together, right? You’re bringing them together, and the only way you’re able to do that is from all of the connections and relationships you’ve built up.
Elliot Horowitz: We built up these relationships over many, many years. In some cases 30 and 40 years. I’m 58, right? So in some cases, many years. And that’s what matters in business, relationships. If you’re going to put money over a relationship, you’re not going to be successful in the long term. Fees over relationships, you’re not going to be successful over the long term. Relationships matter. So some relationships you’ll make as young adults will last you potentially a lifetime. Forty years from now, you might be doing business with the same people you meet today. It’s hard to think of now, but I see in my own life, it’s just what happened. And realizing that I wanted to be the investor, not the operator, found the niche for me where I could go to people who needed money or wanted to raise money or who needed to borrow money and say, “Hey, I could put that money together for you, let’s do business together.” And in the beginning it was slow, like all businesses. Nothing works overnight. But gradually, on building off those relationships, it just worked, and thank God it does work.
Victor M. Braca: And so going from… you mentioned you were in the corporate world directly before you started where you are now, you started your company now, right? Did you find that transition a little scary at first? Because you’re starting something new, you’re not employed by somebody with a salary, but you control now what’s coming in.
Elliot Horowitz: Correct. So when I started my business as it exists today, I had very little money in the bank, very little coming in. I left my job, it was almost crazy to do it. But I recognized that at 48 or 49 at the time, that the only way to get where I wanted to be was to maybe take a step back and figure out the next steps forward. And it was a little… you have bills. You don’t have these bills now, let’s say, but as you get older, you be married, God willing you have children, you’ll have bills, things you have to pay for, and that never stops. If your income stops, the bills don’t stop. So you need to be mentally prepared to figure out how to get by for that year or two or three if the money does not start to come in.
Victor M. Braca: And your stomach, which you developed on the trading floor, helped you with that.
Elliot Horowitz: You need a stomach. Pepto-Bismol helped, but you need a stomach. And I’ll give you an example. A young man in the community called me about a job a couple years ago, and I said to him, “Do you want the entrepreneurial life? Because this is what it is.” He goes, “No, I really want the corporate life.” Then you should go to the corporate world. And he went to the corporate world, and he’s in the corporate world today. He’s a little older, I forget the exact age, but now he wants the entrepreneurial life. And I said, “Are you sure? Because you didn’t want it a couple years ago.” You spend some time in it, now you’re more than a few years into it, and he goes, “Yeah, I definitely want it.” So I think he does. I think he does want it. Everyone has to… you have to know yourself, you have to figure it out yourself.
Victor M. Braca: Something that I struggle with, that I’m a little worried about, is… so you graduate college, right? And that’s sort of your… you’re working, and your life begins, right? What sort of gets me a little nervous about the future is that you have to try things out, but I want to try things out from earlier, because I don’t want to be taking these risks, and maybe if I don’t like the corporate world after five years of being in it after college, then I have to sort of take this big risk when I’m 25. And that’s got to be tough.
Elliot Horowitz: So I would say two things, maybe more. At 25 it’s not so much of a big risk. When you’re 48 it’s bigger, I would say that for sure. 100% for sure. You will learn some things in the corporate world. It’s not like it’s a zero-sum game, you learn nothing. I made a couple of amazing relationships from the corporate world. I have a dear friend to this day from the corporate world who’s like a brother to me, he’s my Irish brother. I made such a close connection with him, I worked directly under him at a bank.
So you will get some good takeaways and relationships from the corporate world, but you’ll never know till you try. And there’s always fear in the unknown. Look, you could start a business tomorrow and it doesn’t work out. And that’s a fact of life, unfortunately. You can get a corporate job tomorrow, and 25 years from now run that company and be the guy. So you don’t know. You have to, especially when you’re young, you have an ability to take those chances, take those risks, because you don’t have four kids in yeshiva, you don’t have a house to take care of, you don’t have certain things… dental bills, clothing, things that you wouldn’t think about when you’re 17, 18. You don’t have that necessarily. Most people don’t have that when they’re that age. Some people might, but most people don’t.
So taking a job is a risk, starting a business is a risk. Nothing is a guarantee. But you won’t know until you try what you think you want to do. If you want to be a doctor, that’s great, you got to go to medical school, you got to be a doctor. You may not want to be a doctor after you become a doctor. That’s also a risk. I know a lawyer who became a lawyer, she’s an interior decorator now. So she found her passion 20 years later. It’s kind of hard when you’re 17, 18. When I was 17, 18, I didn’t know. Nobody really knows. You think you know, you don’t really know. I wanted to be in finance, okay, I went to become a stockbroker, okay. I didn’t really know, but I really did know after a while, like I love this stuff. And then the business changed over time, and I moved on. And sometimes you have to be willing to move on.
But whatever your next step is, you’ll go to college, or maybe during college you’ll get exposure to different people. And podcasts like this are great, and to further that, even the community is great. If you’re a young person, middle-aged, there are so many people in the community who are willing to sit down with you and talk to you. I don’t know that it exists anywhere in the world. It’s really incredible. I’ve spent time in many people’s offices trying to rejigger businesses, and people now come to me for whatever reason. But there’s so much you can learn from that that is unavailable to many people.
Victor M. Braca: Yeah, no, it’s amazing. And in the research for the podcast, and in my outreach to professionals like you, and people in all different types of businesses, I’m finding that there are so many people in the community who have seen success and who are willing to share it with people.
Elliot Horowitz: Almost all of them. I would say almost all of them will do it.
Victor M. Braca: Yeah, it’s…
Elliot Horowitz: And I’m finding that, by the way, you will have a hundred different podcasts eventually for sure, with a hundred different people willing to help you. 100%.
Victor M. Braca: So you mentioned passion, following your passion. I want to ask you about that. At what point do you think that following your passion becomes too much in terms of money, you know, and the money coming in, finances, things like that?
Elliot Horowitz: If I was 19 or 20 and I said I want to be the next Jeff Bezos, right? There might be a little too much, right? I may have a great idea, it may be a great idea. I might not make 300 billion dollars, but I might make 5 million dollars. So you have to have passion for what you want to do, but you have to have a realistic example. Like, somebody called me recently and they said, “Well, I’m switching gears in my career, I need something that I can make 2 million dollars a year next year.” I said, “Good luck, I don’t know what to tell you. I wish you a lot of luck. I don’t know that you’ll get there, but I do wish you a lot of luck and I hope you get there.” So whether that was realistic or not on his part, I don’t know. I don’t think it is, personally.
But you have to… if you want to be an architect, you’ve got to put your life into architecture. If you want to sell t-shirts to Walmart with a special design, you’ve got to be passionate about design and sales to Walmart. If you want to be in finance, you have to be passionate about numbers. If you want to have a restaurant, you better be passionate about food and working 300 hours a week. And then you have to have a realistic goal. It’s not a realistic goal, in my opinion anyway, to say I want to be Jeff Bezos. It might be nice. I want to play for the Knicks and get 40 million a year for doing that, but it’s not realistic.
So in my mind anyway, and some people may differ, you have to have a goal. The goal would be for me to start a company. The goal would be for me to have three clients at the end of the year, depending what the business is. The goal will be for me to be cash flow positive in two years. There has to be some bite-sized goals to reach the next level. Then you’ll say, “Holy cow, look what happened in five years.” Now some people can achieve major success over a year, two, three, it does happen. But most people, it takes extended periods of time to get there. And generally the slower it is, the better it is because you don’t get too ahead of yourself, I think. But you have to have a realistic goal, whatever that goal may be, and making 100 million dollars next year might not be the goal.
Victor M. Braca: It’s something that I think about too. Following your passion, but also making sure that there’s money coming in. You have to obviously devote yourself fully if you want to be able to do something for a living, but even then it doesn’t always turn out to be so lucrative, and then you have to sort of shift gears.
Elliot Horowitz: The entrepreneur has to have a deep conviction that they can handle the pain of entrepreneurship and you have to wait it out. But also, like I said before, there is uncertainty in the corporate world. It sometimes doesn’t work out, no fault of your own, the company downsizes, now what do you want to do? You’re out. So it happens. So you have to have tolerance for that as well, there’s no guarantee. But here, what do you want to do? If you had to start a job tomorrow, business tomorrow, what do you want to do?
Victor M. Braca: So planning on studying finance…
Elliot Horowitz: So you want to be in the finance world, right? Do you have an inkling of what specific finance, or not really?
Victor M. Braca: I’m interviewing you now!
Elliot Horowitz: I’m the host now. Right, so what turned you on to private equity?
Victor M. Braca: I think this is helpful. I like the idea of being able to learn the fundamentals of any industry, of a business, for a certain relatively short period of time. Whether it’s six months, a year, a year and a half. You delve into that business and you try to… I’m sort of explaining what private equity does, but I just like the idea of being able to switch around to different industries. It feels like you’re getting a taste of everything all at once, you know?
Elliot Horowitz: So you’re 17. Most 17-year-olds can’t articulate that, right? Some can, most can’t. So I would say for anyone who’s 17 in high school or maybe out of high school, find something you like, right? Like you found private equity, whether you read an article, whether your parents told you something, friends, whether you heard something, you caught an article in the Wall Street Journal, whatever you did. Something lit a spark at a young age. Not everyone has that spark right away. It may take someone till they’re 19 or 20, or sometimes they take a year off after high school, they don’t know what they want to do, which is also probably okay for some people.
But you have a base, bottom semblance of something you want to do. Where that unfolds, you won’t know for another several years. Because today the private equity business is this, you’ll be in college the next four years I guess, you graduated high school, right?
Victor M. Braca: I graduated, I’m going to Israel and then I’m going to college.
Elliot Horowitz: Good. So the next four years there’ll be different things going on in your life, and maybe it won’t be private equity, maybe it’ll be whatever it’ll be.
Victor M. Braca: True, so true.
Elliot Horowitz: So you don’t know, but you have inklings. I don’t think most 17-year-olds even have that, and they don’t need to have it necessarily, but you found something that lit a spark, and hopefully everybody could find that. Maybe a young man or young woman loves cars. Okay, they can go into the car business, there’s nothing wrong with doing that, or whatever it is, leasing, not building cars, but leasing cars, detailing cars. There’s so many things you could do. Nobody wakes up and says, “I love the peanut business.” So somehow you fall into that business, maybe because you found a good niche where you know buying peanuts in one country, selling them to another country potentially, but a spark will light in everybody at some point what they want to do.
Victor M. Braca: And so, to put it back on your situation, you knew you wanted to do finance, something in the financial sector, and your first couple years working on Wall Street validated that.
Elliot Horowitz: Yeah.
Victor M. Braca: Right. And then you continued that to the point where you are today, where you run a company, you run a finance company pretty much.
Elliot Horowitz: Right. I love it. It’s a different type of… real estate is different transactionally than on Wall Street. On Wall Street, like I said, we were doing billions of shares a year, thousands and tens of thousands of transactions on a weekly basis. Now I look at 1,000, 2,000, 3,000 transactions to get five things done over the course of the year. So it’s smaller volume, different type of projects.
Like when every time you bought and sold a stock, and a lot of that was done over the phone back then, you’d call up Trader A and say, “I want to buy 5,000 Microsoft at 100 and a quarter.” Boom, you’re done. And that was the transaction. Now if you want to buy a property, that could be two months of negotiation and three months till you close, or if you want to make a loan… we closed a loan just yesterday that was supposed to close I think mid-June, and it closed end of July, and we’re working on it from a month preceding. So it’s a different type of transaction where it’s slower. Often there’s always something that pops up, but just the way it is. Like on Wall Street, that’s impossible, it’s a one-second transaction, boom. Now with computers it’s maybe a nanosecond transaction, but we used to make thousands of phone calls to get transactions done on the minute.
Victor M. Braca: And what you’re doing now, it’s more stretched out over a longer period of time.
Elliot Horowitz: Much more stretched out. We probably look at several hundred types of transactions on a monthly basis, probably, and if we make an offer on three, it’s a lot. If one gets done, it’s a lot. And that’s just how it works in our business, and that all fills your time.
There were days where I could be working from 7:00 in the morning till 8:00 at night and I’m not done, and then there are days like 2:00 in the afternoon I’m trying to find something to do. So there’s no consistency in timing. It’s a little different. There are some days the time just keeps going, but everything gets done in its time when it has to get done.
Victor M. Braca: For sure. And I actually wanted—we were speaking about this a little off camera, but I want to talk to you a little bit about working from home. I find it interesting. So you told me you work from home, you’ve been working from home even from before COVID, and how do you like it?
Elliot Horowitz: I have no problem with it. So even when I was on Wall Street before work from home was a big deal, I used to work from home in the summertime because I moved my office, I moved the computers, put them on my third floor which was an empty bedroom at that time. I made an office, and 20 years ago before it was popular, I was able to do it. But on and off over the years I’ve worked at home, and certainly from before COVID I was probably working at home three days a week. And during COVID obviously we stayed. I went back to the office after COVID just because I wanted to, but then I decided I don’t need to commute, it’s just easier for me. I save 10 hours a week, an hour each way, let’s say. 10 hours a week, 40 hours a month, 500 hours a year. To me it’s more beneficial, it’s less stressful, I have no problem, it’s seamless for me.
I would say the majority of the time the house is silent, except maybe now where the grandchildren are at home, bath time is probably not so silent, but generally speaking the house is quiet. I don’t have to order lunch, if I want to order lunch I can, it just comes to the house, no Uber Eats, right. I’ve had no problem. Some people I think have a problem with it, it’s a matter of discipline, and I have no problem sitting at my desk blocking everything out during the course of a day, and you have to be able to do that. I like it. For people who can execute it well, I think it’s very good. The problem is it’s hard for some businesses too. Some people have to be on top of their staff or with their staff, they have a staff of 25 or 55. It might have worked for six months during COVID, but it may not work all the time, and it probably doesn’t work for a lot of businesses all the time. For me, I outsource a lot, and then I have partners who have staffing, so I sort of gleam off of that a little bit.
But for me personally, it’s been actually a blessing to be able to do what I want and come in and go as I please, and work as late as I want or as early as I want, or not at all during the course of a day to block some time out. Like for this example, I blocked the time out, I’m able to do it. If I was in the city, I’d never get here at 4:00. I’m not leaving at 2:00 to get here at 4:00, to stay till 6:00 or whatever the timing is. But I can do it, because I know I’ve accomplished what I have to accomplish today and I’ll be home whatever time we’re done, I’ll be home in 10 minutes and I can sit at my desk for another two hours if I want to and finish things up, which I probably actually will.
Victor M. Braca: So looking back at your whole career path, right? You were on Wall Street in the corporate world for a bunch of years, and you used those experiences, relationships that you built up to start your own company. What has been one, two, or three key principles that stuck with you the entire time that allows you to be where you are today?
Elliot Horowitz: So it may sound old-fashioned, but whatever I believe in, your word is your bond.
Victor M. Braca: I like that. Your word is your bond.
Elliot Horowitz: If you tell someone you’re going to do something, you’re going to do it. You know, I have some partners, we have email agreements we can’t even find anymore of what our deals are together. It was really done on a handshake and a hug, right? Now some people say that’s crazy, but people sign things sometimes and don’t really mean to live up to it, right? So really your word is your bond.
You have to have resilience, because things won’t always go your way. I, and many people, have had periods of call it less than successful business endeavors, and you have to have that resilience. You need the faith that it’s going to work out. You have to have a good sense of humor, you gotta have a good sense of humor.
I’ve been lucky enough to marry off three daughters, and I’m very fortunate, in age order no less. Very fortunate. And each wedding I tell the kids the same thing. I say to them, we all want the best for you, but sometimes life throws you a curveball and sometimes things don’t work out the way you’d like it to work out. So within those experiences, you have to just dig deep and you have to have resilience, you have to have a positive attitude. You got to throw some praying in there, you have to throw a little bit of everything. Because when things are working out and everything’s all wonderful and great, everyone’s a genius, right? Everyone’s a genius. When things are maybe less than rosy and less than perfect, that’s when it really tells what you’re made of, quite frankly. And many people, myself included, have had less than stellar business experiences at times in their lives, and that’s the moment in time where you figure it out. You have to figure it out. So it’s really a combination of a few things. It’s that honesty, that work ethic, the resilience, the faith, the hoping for a better day type of thing, and the smarts and realistic expectations of what you’re trying to accomplish.
Victor M. Braca: The breeze is back.
Elliot Horowitz: The breeze is back, the cameras are back.
Victor M. Braca: Yeah, the cameras, they cut out for a second, but I love it. I think thinking about this as a 17-year-old, the resilience that you’re going to need if you want to become an entrepreneur, and even if you want to be in the corporate world. You were on Wall Street and you had to be in the office 8 o’clock, be out 8 o’clock or whatever the hours were, like 6:30 in the morning until whenever.
Elliot Horowitz: Literally go till whenever. You have to be able to stomach that. You got to stomach it, and for better or worse, some people aren’t ready to do that, but you have to be ready to do it. Look, you’re in the corporate world and your boss at four o’clock on a Friday says, “I need this Monday.” You’re working Sunday. You have to get it done. It doesn’t matter that you don’t want to get it done, your boss is telling you to get it done. If you’re an entrepreneur and the client calls you and says, “I need it Monday,” guess what? You’re getting it done. So it’s not for everyone, but you need to have that mentality that it’s going to get done.
Victor M. Braca: For sure. So I want to shift gears a little bit. You do a lot of speaking engagements in terms of panel speaker series, whatever it may be, and unofficial mentorship. People call you up, they ask you for help and you’re happy to entertain that. Why? Obviously I know you want to inspire people, but why?
Elliot Horowitz: So from the real estate perspective, I attend some conferences either as a panelist or as a moderator. It gets good exposure for me, for the company. There are times when people ask me to do them a favor, “Hey, the moderator dropped out, could you fill in?” And I’m always willing to do that if I have obviously that time slot for that next day or three days from now available, but if it is, I’m always willing to help. If they didn’t need me for whatever reason in the beginning because they had somebody else, I’ve done that, I’ve helped out. It’s always good to help people. It’s good advertising, it’s good networking. And I do it because it gets exposure, and businesses need exposure. Businesses need a way of touching different people and getting their eyeballs on you. And when you’re moderating a panel and you’re asking questions of other people, you also learn things from smart people, which is good. And then when you’re answering a moderator’s questions, hopefully people think you’re smart, right?
And then from a mentorship standpoint, along the way I could probably count in my head numerous people who were willing to sit with me, from the community especially and outside, to work through an issue, discuss a problem, brainstorm, give advice. And sometimes the advice is not what you want to hear, but it’s coming from their heart so it’s good advice, right? And if somebody needs the same thing today, you have to help them. You have to. If somebody asks, if you haven’t had help from anybody along the way and life’s been a glorious path of roses, let’s say, you have to be willing to help that next person to the extent you can. It’s just something that as human beings, as even as Jews, we should be doing, for sure. I very much feel grateful to people that have taken out their time to help me. Why shouldn’t I help the next person to the extent that I can?
Victor M. Braca: I love it, that’s great. I want to ask you, what was your Momentum Moment? What was the moment where you saw that you were doing something and it was working, whether it be in the corporate world, whether it be starting your company, and you came to the realization that what you were doing was working, you just needed to keep doing it?
Elliot Horowitz: Wow, it’s a really good question. So you’re 17 you said, right? That’s a really good question, thank you. When I started my business in its own form now, after a year we weren’t getting anywhere. A year later, when I looked back on the previous two-year period, I said, “Wow, I can’t believe I did this. I can’t believe I put this deal together, that deal. Wow, I raised this much money.” It just dawned on me something was working. So I sat down and tried to figure out what it was and what I’m not doing that could sort of expand on it. And I guess it worked, thank very thankfully.
In the day-to-day you don’t really realize that, because you have your head down and you’re working and you’re grinding. But when you take a step back, you look up after a little while, “I did this, right?” In the day-to-day it’s hard to because you have to get a task done that minute, that day. That’s why Sundays are great, because you could sit back on a Sunday potentially and say, “Oh wow, look what happened this last year.” Or at the end of the year maybe things are a little quieter, let’s say. There’s always a time frame where maybe you’re on vacation for a few days and you have to reassess life or you have time to think things through. But yeah, some people say day by day, I try to take it 15 minutes at a time. And then you look back and say, “Wow, look what happened over the last two years, five years. If we keep going at this pace, five years from now hopefully we’ll be even a little better still.” And that’s been helpful to me, taking it slow and being grateful for everything, because if you’re not grateful for it, that’s not good either. You have to be grateful for what you have, it’s important and it helps.
Victor M. Braca: Amazing. Okay, and that’s where you are today. Amazing. Elliot, thank you for coming on.
Elliot Horowitz: Thanks for having me, it’s great, appreciate it.
Victor M. Braca: We’re going to rename the podcast so Momentum with the Gardeners.
Elliot Horowitz: Momentum with the Gardeners, I like that, I like that.
Victor M. Braca: Yeah, we might do that. And really great conversation and looking forward to keeping in touch.
Elliot Horowitz: All right, you too. Anytime, please call anytime.
Victor M. Braca: Thank you for watching this week’s episode of the Momentum podcast. Please subscribe to us on Spotify, YouTube, Instagram, leave a like, a comment, really anything will help us out. Let me know what you thought of this episode, and until next time.
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