Financial Freedom Journey from Firefighter to Real Estate Mogul with Ian Horowitz

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent. We had the privilege of speaking with Ian Horowitz today.

[Erica]
We did. He’s a firefighter-turned-investor, and he was really fun to talk to.

[Mattias]
Yeah, he’s a fun guy. I think one of the overarching themes, which I say in the podcast here soon, is keep it simple, stupid. He likes to be very straightforward and not make things too complex and keep things easy to understand, which I think is a really benefit for everybody, because I think oftentimes these syndication things seem so daunting, seem so big, seem so…

Yeah, I can’t wrap my head around it. If people are confused, they don’t act, right? They don’t decide on something if they don’t know what they’re getting into.

And if it’s too complicated, then it’s probably not something a lot of people want to get involved with. So I thought that was really cool.

[Erica]
Yeah, I did think… I mean, it’s sort of the same thing with what you’re saying, but it does feel like when he talks about it, he bridges the gap between some of the confusion so that somebody who doesn’t have the experience or the knowledge doesn’t have to feel like they can’t quite get there. It doesn’t take a lot.

You just have to jump in and get in there.

[Mattias]
Yeah, another thing he said that he really did was kind of show up. And I think that’s been a reoccurring theme in a couple of different podcasts that we’ve had, and something that I’ve just kind of been chewing on in the back of my head as time has gone on since that idea kind of sprouted itself. But there’s a lot to that, just showing up.

If you show up to the gym, especially, I’m going to argue, across a class or just a class, if you show up, that’s half the battle. You get in the door, and then you’re going to work out. Even if you really didn’t feel like it, even if you’re scared or intimidated or whatever the case might be, showing up is a huge chunk of what you need to do.

Yeah.

[Erica]
Or even, I’m going to break this down even more, because for a lot of people, taking a shower is a really hard job, especially those of us that are stuck in seasonal depression where it’s really tough. You’re waiting for spring. And getting in the shower just feels like 10 million things that you just don’t want to do.

But if you get in there and you just turn the water on, probably you’re going to do the rest of it.

[Mattias]
Show up.

[Erica]
Show up.

[Mattias]
Yeah. No, I think one of the coaches mentioned show up and don’t be attached to the outcome. I definitely know that to be true in the real estate sales space.

Don’t be attached to the outcome. I don’t know. I guess that’s probably true as well.

If you’re in a fitness journey and you’re really trying to lose weight or you’re really trying to get stronger, etc., that can probably be discouraging if you’re weighing yourself every day and it fluctuates or whatever. You might give up on that because you feel like you’re not getting anywhere. But I think, yeah, showing up and not being attached to the outcome is a really powerful message.

A good one to live by.

[Erica]
Yeah, totally.

[Mattias]
Without further ado, we’re going to get right into the show. Ian has a lot of experience in investing and he’s fun to hear. Without further ado, we’ve got Ian Horowitz.

Welcome back to the REI Agent. I am here with Ian Horowitz. Ian, thanks so much for joining us.

[Ian Horowitz]
Yeah, no, I’m definitely excited to be on. I wish it was a little bit warmer out, but we’ll try to keep this episode nice and warm.

[Mattias]
Thanks. Yeah, I think we’ve been having some seasonal depression over here. This winter just keeps coming back and kicking us.

[Erica]
We just talked about that earlier today. I don’t know what the weather’s done for you, but over here, it’s like the snow. The report says it’s going to come and then we’re not sure it’s coming and the schedules have just been all over the place.

[Ian Horowitz]
Yeah, it’s been nonstop cold. It’s been snowing. I know you guys just got crushed south of us here.

But yeah, dude, I’m ready. I’m ready for summertime. I would agree.

A little seasonal depression going on, but either way, I don’t think people need to hear about my problems. Yes, they do.

[Erica]
That’s why we’re here.

[Mattias]
Yeah, no. Ian, you’re coming out of the Philly area. We’re four hours or so south of you.

We have some similar weather stuff happening for sure. Yeah, so Ian, you are in self-storage, right? You find deals.

You raise capital for the deals. Tell me about that and how you got started in it.

[Ian Horowitz]
Yeah, I wish I could tell you that I was super smart and had it all figured out. Just real quick, my name is Ian Horowitz with Equity Warehouse. We own and operate real estate commercial assets.

We co-invest and co-led with our family and friends. But it was not that simple. It wasn’t that polished way back when.

We started in 2012, 2014-ish. In that time frame, actually me and my business partner, excuse my improper English, but me and my business partner, we were firemen for the city of Baltimore. That’s where we spent 15 years there being career firemen.

It’s the only thing that we wanted to do. We dreamt about it. We graduated at 2000, 2001, 9-11.

Being a big city fireman is a thing then. We always enjoyed volunteering and doing those things. We got to live out our dream.

But quickly did we find out about politics and furloughs and schedule changes and closing companies and you’re not top priority and all these things. We had to find a better way through real estate. That’s what we did.

Instead of doing part-time work, we started buying real estate. We were able to quit our jobs in a career that most people don’t quit. We’re able to be free and on our own today where we syndicate real estate and put deals together for our friends and family.

[Mattias]
That’s awesome. You didn’t start with self-storage or did you start there? I’m surprised.

[Ian Horowitz]
Again, I wish I was that smart, dude. Just to give you guys a picture, we get hired in Baltimore City. We literally worked where the wire.

If you ever watched The Wire, it’s all true. You saw where all the riots happened. That’s where we worked.

When the riots were going on, the CVS that was on fire was five blocks from my firehouse. We were in the middle and in the thick of it. That’s what we wanted to do.

Typical degenerate fireman, my credit score is under 560. I owed a bunch of people money. I didn’t know.

I was just grinding away, doing side work, doing all these different things. There was one problem. We were working two 10-hour days, two 14-hour nights, four days off.

What would happen? I’d work my two 10-hour days, go home. Before my two 14-hour night works, I would work side work all day.

Then my four days off, I would work all four days off. I’m like, dude, my wife wants to have a family. Thinking about having kids, she wants to buy a house.

She wants to start a family. She wants all these different things. I’m not saying it’s all her fault, but I wanted to do it too.

I’m going, how can I be around and do any of this if I’m working all the time? That is no quality of life. On top of that, the thought of my kids going to preschool.

We’re actually homeschoolers now, which I never thought we would be. We’re homeschoolers now. The thought of my wife and being separated from our kids was not there.

I said, how do I make money while I’m asleep at work? I said, you know what? Somebody rents my house.

That’s 24 hours a day. Every single second they’re in my house, they’re paying me. It was the only thing that I could think of.

Plus, if I get killed in my line of work, my wife can hand them to a property manager and she’s fine. If I get injured or so incapacitated, she could sell them off, whatever it is. There was a legacy there too.

I also said, hey, if over 30 years someone just pays this house off and I made money along the way, I got a nice little savings account. That’s how this whole thing started. That’s a really long way.

I’m sorry for this. It’s a really long way to say I started with subsidized rentals, section eight rentals in the hood of Baltimore, grinding it away, renting to single family tenants.

[Mattias]
Yeah. I mean, there’s nothing wrong with that. I’ve heard a lot about Baltimore.

I’ve had clients and stuff come from there. I’ve heard that there were a lot of opportunities maybe of some revitalization and things happening. That may not be when you were doing this, but I’ve heard that here recently.

I don’t know. Do you still own property there?

[Ian Horowitz]
Yeah. We still own and operate real estate in Baltimore City, mostly single family. We do have a couple of commercial assets there.

Our team’s based out of there, so it’s pretty easy for us to operate. Baltimore is a tricky town. It’s a very small city.

You really need to know where you’re going. The only thing, and up until recent, we live in a pretty insulated, the DC Baltimore metro area. You got a lot of government workers.

It’s a pretty insulated market, so it’s not getting as damaged as some of the other ones, but I guess we’ll see on the other side of the cleanliness of government what’s going to happen on the other side of all this. In the end, it’s still a pretty stable market. It’s off 95.

You just really, really, really need to know where you’re going in and out of that city, but there’s money to be made.

[Erica]
There’s money to be made. I’m curious. You came from an extremely high stress environment from being a fireman, especially some of the stories you’re talking about.

I’m curious how the stress changed for you and the adrenaline you experienced going from being a fireman to going into parenting and then also into real estate investing work because I think it all carries a certain level of stress in each one of those.

[Ian Horowitz]
I was kidding about the therapy session comment at the beginning of this conversation. I do agree that there’s a lot of similarities. I’ll start with our business and I’ll get to the kid thing second.

It’s nothing more than I think the resonate to business is we had a business and one thing we did not have was money or capital. We had these things and we had willpower. Most people when they get into a hairy situation, they throw money at their problem.

We knew one thing. We knew how to throw our grit and determination at it. Why?

Because when we go to a fire scene, you can’t leave until the fire’s out and the situation’s been mitigated. I’m not any more successful than anyone else. I’m just dumb enough to get up and go do it every single day over and over and over again until it’s right, until the fire is out in our business.

From that side of things, that high stress environment, working in the fire department, having SOPs, having the willpower to get the job done, that carried no problem. To the kids thing, I would say more of my business experience definitely carries. You can’t talk to a kid like you talk to people on a fire ground like, you can’t stop that right now.

You don’t get so far but you do get the leadership qualities from the fire department, right? How do you lead? How do you communicate properly to different people?

We got all walks of life. You got people that came from the counties, came from across the country, people who grew up in the city and they’re the first person in their family to get a job, right? They’re the first person in their family to have a driver’s license, right?

You’re dealing with completely different demographics now. Your kids, right, they’re similar to you but they each have their own, I don’t want to say quirks, I guess it is quirks, right? I need to communicate with my one daughter different than my other daughter.

Not only from an age difference but from her ability to understand the ability, the way I communicate with her. One I can be a little more direct and a little more stern with and the other one I need to coddle a little more. I think really the leadership qualities and those ideas from the fire department and business really carry over into your family life.

[Erica]
Oh, that’s probably so true. Did you notice, now see, I’ve never been in this situation fighting a fire. I wouldn’t know the first thing about what that even feels like.

I can imagine though going into a job like that, you have pretty unpredictable days. You don’t ever know exactly what’s going to happen and it can happen at any time and it can be small or pretty severe, I’m assuming. I’m curious what it was like to go from that level of unpredictability into a situation or a job career where your life isn’t necessarily being threatened anymore and you don’t have that level of stress where you might not have to think about these contingency plans as much as what if I die or get injured beyond repair.

[Ian Horowitz]
Yeah, I guess there’s a reason many firemen, military, police are addicted to something. Some it’s gambling, some of it’s drinking, some of it’s smoking, some of it’s positive. I’m addicted to business and what I would say to that is, yeah, it’s a different world waking up.

Just sleeping through the night is completely different for me. That is not status quo. I’ll tell you this much, the day I quit and I came home and the next morning I woke up, I literally felt the weight lift off my shoulders.

I probably lost 30 or 40 pounds immediately. It was a different feeling but in the same sense, it’s like, yeah, am I pressured to survive and live inside of a fire? It’s almost selfish in a way and we need people like that to go in and pull people out of burning buildings.

You’re putting your whole life on the line to go get some random stranger out of a building but now my stress is and what carries me through the day is creating the legacy, creating the life, creating all the things that I want for my family and employees and coworkers and co-investors and co-lenders and all these people. We have so many people that rely on us for what we do, vendors, employees, investors. It’s a different stress but I think it’s still the same stress response in a way, if that makes sense.

[Mattias]
Yeah. I definitely have heard many syndicators say that the moment they were responsible for other people’s money, it’s something that in the investing world, a lot of people talk about all the time, other people’s money, OPM, OPM, OPM but the moment they achieved that, actually had people that trusted them enough to give them their money and they had to operate this plan they put out in place, they just said they don’t sleep as well.

They have a different type of sleep so I could see how that would be a stress for sure.

[Ian Horowitz]
It’s a massive responsibility and you’re right. A lot of people are out there just telling other people’s money, other people’s money, other people’s money. Yo, bro, that’s your friends and family, guys who I sit at the firehouse with, that’s their, I don’t want to say last $25,000 but they had to work so stupidly hard, I almost cursed, I apologize, so stupidly hard for that money to be able to invest it with you, dude.

That money is more important than bank money, more important than my own money. That is the most important money and yeah, it is a responsibility and it is a massive stress but if you’re going to do it, you better perform. Okay, hey guys, you want to invest with me?

Sure. You’re not Wall Street. If I lose your money, that ain’t cool.

If Wall Street comes and gives me money, I don’t know, you guys are idiots. You’re system investors. You should have known that I wasn’t going to perform and I think too many people just hear the gurus spouting that off.

You’ll get people’s money. That’s no way to be.

[Mattias]
Yeah, well, this may be a good segue to get into how you got into commercial real estate, specifically storage and then we can get into what we’re talking about here with other people’s money and investing in syndications.

[Ian Horowitz]
Yeah, there was a lot of grinding. I mean, I’m going to give you a short synopsis over a 10-year period. We grinded out a ton of single family houses and really refined who and what we were and we got to a point, we had a couple different business partners.

One of them was a securities attorney, learned a lot from him, a lot of good things and bad things and we got to a point where we had an opportunity to buy a 76-unit apartment building and it was the first deal where we were like, okay, let’s bring in capital investors in and it was a learning curve. We had to raise a million bucks and I said, I got to know 40 people with $25,000 and I went around, I probably called 150 people. We had a good track record.

We’re seven, eight years deep. We’ve done two, three hundred houses at this point and we did that deal and that was the dam that broke loose to allow us to syndicate and do more deals. It’s fun, it’s exciting, it’s stressful, it’s all those things but we were able to put that deal together.

We were able to raise the million dollars. We were able to refinance that 16 months later, give people a great return and the floodgates were open from there on. There really is something about the law of doing your first deal and that’s really what took us down the road and as we wanted to scale the quote-unquote syndication business, we found that multifamily was really hard to chase down.

It’s a highly sought out after asset class. We stumbled on storage and we’ve done that and we’ve grown a relatively big portfolio. We have 15 sites, a little over 600,000 square feet.

It’s been really good to us and I’m excited to see where that continues to grow.

[Mattias]
Yeah, that’s awesome. I’m going to give a little bit of context here. That apartment deal, you were essentially building it up, making it better, making it operate better, maybe renovating a little bit, getting rents higher, making the operating costs less, all that kind of stuff to be able to cash out, refinance and you held the asset.

Is that right?

[Ian Horowitz]
Yeah, and that was our pitch to our capital investors because a lot of them are friends and family. Firemen, teachers, nurses, military and we said, look dude, we don’t get opportunities and gals, dude and dudettes, I guess. It’d be politically correct, right?

But with that being said, it was like, hey, we as in blue collar type workers don’t get an opportunity to invest in deals like this. Here’s an opportunity that we’re presenting you and we’re going to go out and execute it and we’re going to be fiduciaries and if we think it’s best to hold onto this asset, we will. And if we think it’s the best to sell at the end of our term, let’s do that.

And we hit it kind of in the height of COVID when things were just before things got too expensive to refinance it at a really good debt rate, very attractive and we cleared well over seven figures and we quit our jobs the next day. So those capital investors, someone put in 25 grand, they got back 32% in 16 months. That’s a really good rate of return.

And just because we did that on that one doesn’t mean it’s guaranteed in the future, but hey, there’s an opportunity. You need to be in the batter’s box, you need to be swinging, you need to take your shot.

[Mattias]
So then they continued to have ownership after they got that. So I want to just break that down to what is also known as the BRRRR strategy. If you’re looking at it from a single family investing place where somebody would find something that could essentially be flipped, right?

That a single family, it’s a house that needs renovations. They buy it at a discount because of its conditions, they put money into it, they raise the value of it. And then instead of selling it and getting the equity that’s built into the property from the work that’s done, they are then refinancing it and keeping the equity in it and getting all their cash back out in that circumstance.

You don’t have to always get all your cash back, but you get what I’m saying. So that’s essentially what you did on a much bigger scale and you’re using other people’s money, other people are investing to help make all, to raise all the capital needed to do it all because it’s a much bigger scale. And now, like you said, all these people that have no opportunity probably to ever invest into an apartment building, might have been a goal, maybe not, but it’s a cool opportunity for them now, now have ownership in it and they’re not doing anything with it.

They’re not having to manage the tenants, fix the toilets, get any screening calls, anything like that, right?

[Ian Horowitz]
No, and they get all the tax benefit and they don’t lose this, right? You don’t end up looking like me and that’s probably a good thing. But you got to remember something leading up to this, there’s two things.

This is what we were refining in our single family business, buying them, fixing them, placing a tenant, refinancing them, getting the most of our capital back. Like you said, sometimes you get all of it, sometimes you get most of it. Sometimes, you got to put a couple of dollars in, but here’s the thing.

People do this with their stock portfolios all the time. What do they call it? Dollar cost averaging or dollar, right?

They’re putting money in all the time and people look at that. I’m like, well, it’s the same thing as a stock. You put money in, you got it all back and now you own it forever, free and clear, your return’s infinite.

And so what if the next one, you got five grand stuck, but you’re getting $5,000 a year in cashflow. That’s 100% rate of return every single year and you need to look at it in a portfolio. The other thing is when we did this, we said, hey, most syndicators, they’ll do something where they’re like, hey, you guys own 80% of the deal and then if we refinance it, we’ll take you out, we’ll change the metrics and we’ll make it 50-50 or 60-40 or some kind of goofy crap.

We’re like, listen, we’re dumb firemen. So this is what we’re going to do. We’re going to own 65% of it.

You’re going to own 35% of it. We’re going to do all the dirty work. We’re going to sign all the debt.

We’re not charging any goofy fees and we’re going to do this deal. And that’s it. That’s how this is.

And when we refinance, you own it long-term with us. You get the tax benefits, you get all the fun stuff with it. But if we sell it, you still get a 35% hit later.

If we refinance and get a bunch of cash, you get 35% of that cash. So with that being said, yeah, it’s just, it’s not that we’re like abnormal. It’s just, I didn’t understand the other way people did it.

And I don’t, I can’t sleep with myself at night to be like, oh, I bought a deal for 5 million bucks. I had all my friends put a million in so we can make it worth 10 million. And then I got to keep it because I refinanced it and I enjoy this thing.

That’s just use and abuse. Don’t you want your friends and families to succeed with you? Because as they do, what I’m so bad with saying is the rising tide floats all the boats or whatever.

You know what I mean? Look at Warren Buffett. How many billionaires are in Omaha, Nebraska?

He made all of his friends and family and guess what? They’re going to come back to you to say, hey, I got more money to invest. Why wouldn’t you want your friends and family to be successful with you?

I don’t get it. I guess that’s why those people make more money than me. They’re way more greedy, I guess, but I don’t know.

[Mattias]
Well, okay. So let’s pitch me on, give me an elevator pitch on storage, why that’s a great asset class to be on.

[Ian Horowitz]
No toilets, no consumer laws. You got lean laws. You can literally just overlock someone and boot them out the next day.

And in the end, you’re just dealing with a metal box. That is it. That is absolutely it.

Someone has decided to rent a five by five or a 10 by 10 metal box from you. What’s better than that? You don’t have to have the newest tile, the newest toilets, the newest, by the way, we’re going up in the high rise, the newest countertops, right?

Like any of that stuff, you are providing a very direct service and that is it.

[Erica]
That sounds pretty attractive to me. We’re working on a midterm rental we’re putting together right now and part of that includes some furnishing. It’s fun decision making, but it’s really different than the simplicity of what you’re talking about.

[Ian Horowitz]
Yeah. And the other big thing is there’s no consumer laws. I think that’s really the big one.

That was a real big push during COVID and forget politics. It’s just true. We’re in a very blue area that was very tenant friendly.

But the interesting thing is storage nationwide didn’t matter what party lines were in control. They still were able to operate their businesses. They could increase rents.

They could do the lean laws and get rid of the people. They could do all these bullet pointed things and continue to operate their business. We’re in Baltimore City and Baltimore County, I couldn’t evict you.

They weren’t releasing the eviction protection money and I had tenants that were just like, you know what? We’re not paying you. We’ll just wait until that shows up.

It was like you couldn’t run your business. I think a lot of people forget that real estate is a business. The nice thing about storage is we were able to continue to operate at a high level.

[Mattias]
Yeah. It’s funny. I feel like a reoccurring theme that maybe would be a good title for this episode is keep it simple stupid.

[Ian Horowitz]
Dumb firemen shows real estate investing. That’s it. I tell people we have $70 million and I’m not trying to brag.

$70 million of assets that we’ve built, owned and operated and we still own today. We’re literally two dumb firemen that barely got out of high school. The thing is too many people go, oh well I need to do this, this, this, that, this and the other thing to do it.

It’s like, well no, let’s just do the deal. Let’s put the property first and if we pour our heart and soul into the property, this whole thing will work out and that’s it. Too many people get so convoluted and all the other crap that’s just not worth your time, energy or effort.

[Mattias]
I love it.

[Erica]
Wow. Okay, so if you had to list your top three things in your life right now that carry the most stress, including personal and business life, what would those be?

[Ian Horowitz]
I mean I’m not going to lie. I don’t know what other guests say this but kids straight up. I got two girls.

That’s probably my top primary concern. The second concern or stressor in my life I would probably say is the growth and trajectory of our business. We’ve climbed.

You hear people, like I just said, $70 million of real estate. Yeah, I kicked your coverage. You did this, you did that.

You start to gut check yourself to be like, yo, am I who I say I am? Are we supposed to be in this position? What does that look like?

And then I’d say the final stressor is we got a lot of people counting on us. That’s really important to me, that network, the friends and the family. But if I could go back to the number one stressor, there’s probably more pain points off of that, is I got two girls.

I remember sitting in the ultrasound for the first one and she’s like, you’re having a girl. And I was like, so dead set on having a boy. And I must have had a long face.

And the ultrasound tech, she comes up to me and she’s like, girls play sports. I said, I ain’t worried about sports, dude. I’m like 15 to 25.

My brain has gone haywire. But just making sure you’re doing the right thing, that’s the common stressor. Like I said, we homeschool.

Am I doing the right thing? We do all these food and health things and got the gardens and all of a sudden, am I doing the right thing? You just don’t know.

It’s weird, man. I know I’m on your show, but I also want to ask what your stressors are. You’re the same person here.

[Mattias]
We definitely feel that. Actually, this morning, we were just talking and I was like, can we just name it? It’s really hard.

Parenting these kids is just really hard. Sometimes it’s like, and we’ve been cooped up a lot with the weather and school closings and that kind of stuff, not able to get out and do things. We’re just like, it’s just hard.

[Erica]
I think our three would be very similar to yours. We have three kids, eight, five and two. Two girls and a boy.

Parenting is extremely challenging. What we were talking about this morning too is trying to communicate with each other is extremely challenging because of the crazy schedules we work because neither one of us have a nine to five job because we’re both self-employed. We’re investors.

He’s a real estate agent. Just trying to talk to each other and parent and do business and answer all the questions that need to be answered and what the business is going to look like in the next couple of years. It’s all very similar.

I totally agree with you.

[Ian Horowitz]
Yeah, I think a lot of people are like, why would you want to go work for yourself? It’s like, you know what? I’d rather have all these stresses than risking everything I’m doing with an employer that might go out of business.

I worked for a city that is a step above Detroit and pension funds are going bankrupt across the nation. I’m going like, is this really what I signed up for? It’s cool.

I love the adrenaline rush but in the same sense, I think there’s more to me to go out and really make my own way. I think making the own way and having those stresses, I think there’s something about the fortitude that it takes being able to show your kids that you can deal with the stress. Look, I get it.

We all yell. I got 11 or 10 and six and it’s just like, I can’t believe I yelled and I feel bad and we talk about it. The worst thing about kids is disciplining the you out of your own kid because you’re like, that’s pretty funny but you can’t do that.

It’s funny but I’d rather work for myself. I’d rather be able to sneak out for lunch or blow the day off to go enjoy that one day than have to stress about working for an employer that I don’t know if I have my job the next day.

[Erica]
Yeah, 100%.

[Mattias]
I’m going to shift gears real quick, ask you about how you all operate. Do you do accelerated depreciation? What’s that look like with storage as compared to like, I’m familiar with mobile home parks, familiar with apartments.

What’s that look like for storage?

[Ian Horowitz]
Yeah, the accelerated depreciation, there’s a lot of good things, especially when you get into the climate control units because you got the exterior shell of the building but then you got all the units inside which become equipment. Accelerated depreciation, all those fun things. So, storage is actually a pretty good one to do accelerated depreciation on.

I haven’t touched. We did it there for a minute but with the syndications, you need to be careful because if your disposition is to sell at the end, there is a recapture. There are a few things that you need to be aware of.

So, we did do it for a minute when it was at 100%. We did one at 80%. I think, are we down to 60?

I don’t know. Hopefully, Uncle Donnie brings it back but I guess we’ll see what happens or maybe we don’t have to worry about taxes here in the very near future. But with all that being said, yeah, we look at it on a case by case basis.

What’s the disposition of the property? How does it benefit the investors? Because you’re a real estate professional but if Erica was to just invest by herself, well, she’s not a real estate professional and if she makes more than the AGI, she might not be able to use these accelerated losses.

So, am I spending my capital investors money so I get the benefit or is there enough people that are benefiting it from that all can use this accelerated depreciation? So, things you need to be worried about and again, I never thought these would be the problems that I get to enjoy. Thanks.

[Mattias]
Yeah, just a little clarity there too is just being a real estate designated professional, you do get to write off more in situations like that. So, you could write off your earned income a lot more than somebody who was not a real estate professional designation. So, that’s part of what you’re talking about.

One of the cool things potentially with syndications is you have that opportunity that you may not if you’re just buying a traditional rental. You’re probably not going to go through the process of making an accelerated depreciation, et cetera.

[Ian Horowitz]
Well, I’ll give you a little caveat to that. The company that we use, they suggest anything over $200,000 of an ARV, it’s worth taking a look at because we do have a couple of single family rentals that we did do and it was a nice little benefit because the rentals that we’re not going to sell, we’re probably going to keep for a very long time. I’ll give them a shout out, CSSI.

They’ve been really good. They’re based out of Baton Rouge. You send them the information, they’ll take a look at it.

And if they think it’s worth it, they’ll give you an upfront estimate. It’s a little hard to understand at first, but there is a chance that some of your single family rentals are worth capitalizing. It’s not just reserved for residential or commercial assets.

Airbnbers are a good one for it. But there’s also some lines you got to tell on that, but yes.

[Mattias]
Yeah. So all that to say is it’s really syndications can be a really great way to passively, way more passively invest than buying rentals yourself if you’re in the limited partner side. And you can diversify too.

I think it’s an interesting idea if you do want some of your own portfolio, if you do want to invest in some of your single family in the market you really understand. You could then invest somewhere else so you don’t have to know anything really about. Well, you should do your due diligence and understand the operators, understand the deal.

But I could invest with you for example and get into self-storage without having to really understand how to make a successful self-storage business.

[Ian Horowitz]
Yeah, that’s right. The biggest thing, you’re changing your bet, right? You’re changing your bet from the horse to the jockey, right?

And that’s the question. If you understand, okay, I like horse racing, sure. And I’m not a better at horse racing, but you like horse racing, you like the ponies, they look pretty.

Okay, self-storage is a pretty pony. Well, now which jockey do I like that makes me feel comfortable that my investment’s going to be safe? What’s your track record?

What does this look like long-term? Give me some information. And I think that’s what people miss out on and then you need to actively manage your investment.

And that could be in single family real estate. If you’ve hired a property manager, you’re managing the manager. If you’ve given money to me, your job is then to manage me.

And if you’re investing in your own deals, your job is to manage yourself to make sure that your deals perform. And I think a lot of people lose sight of that and just say, hey, I put money into this deal and it’s magically going to be worth more tomorrow. And you got to remember why you’re doing this.

You’ve created your own little family office and you’re trying to grow that.

[Mattias]
Yeah, I love it. And I’ve got to ask you if you have a favorite book that you’re currently reading or a fundamental one that you’ve suggested everybody read. Do you have anything prepared for that?

[Ian Horowitz]
I do. I went and dug it out. I like to keep it on the desk, but my favorite books right here, Atlas Shrugged, Ayn Rand.

I didn’t read it in high school. That really wasn’t on my career path, but I read it right around the 2020 election. And it’s very how a book from the 40s is still relevant today talking about producers and the people who are trying to beat the system and how too many people are trying to beat the system.

The producers just give up because it’s not worth their time. And it’s a great reminder of why you should be in business and you should be producing and hopefully again, make everybody around you better and want to get out there and work and want to get out there and do things. And it’s a great alternative to the block and tackle type books.

I got Dan Martell up there, Buy Back Your Time. It’s a great block and tackle book, but you can only read so many. Everyone, once in a while, you need to expand your mind.

And this one was a good, is it fiction? Fiction, right? Yeah.

A fictional story that has true underlying tones that are really cool. And I enjoyed it. The guy who I co-host my podcast with, we read it together.

We do that a lot with books and it was good to just share the thoughts and get his view on it and that I was getting. And it’s just a really good book, man.

[Mattias]
I love that. That’s awesome. We have not heard that one before.

And I got to say too, man, it doesn’t sound like a simple, dumb fireman book.

[Ian Horowitz]
It’s not. And when I got to it, it was like a 60 hour listen. I mean, this little tiny print book is a little over, it’s over a thousand pages and the print’s tiny.

[Erica]
That’s tiny print.

[Ian Horowitz]
But the storyline is so good. It was like a soap opera every day. I’d get in the car, I’d go to the gym, I’d go, let me get a half hour in.

But it’s good and it’s interesting. And it’s just like, man, it’s a little confusing at first, but if you just stick with it and get through it and listen to it, it’s like, wow, man, is this what’s going on? I’m listening to when Trump and Biden are going at it and people are trying to beat the system with whatever was going on with COVID and getting all this free money.

It was just such a relevant story. And this thing was written in the 40s, like the original.

[Mattias]
Awesome.

[Ian Horowitz]
38? No, 57. She wrote this one in 57.

And it’s just crazy to think that this thing lasted 70 years and it’s still relevant today.

[Erica]
I love it. That’s so cool. Great.

Yeah. Thanks for sharing that.

[Mattias]
So if people are interested in following you for more or to reach out to you about maybe a future deal, is there a way for them to follow you?

[Ian Horowitz]
Yeah. Best place is just check out Equity Warehouse. We’re on all the social sites that communicate the most on Instagram, @equity_warehouse.

With that being said, equitywarehouse.com. You can check out key studies on how we co-invest and co-lend with our friends and family. If you want to learn more about what we do, put your email in there.

I’m not going to spam you. I don’t have a bunch of spam emails that come out of it, but I will notify you when we have deals and you can check it out. And here’s the thing, whether you want to invest with me or somebody else, it’s just a great way to look at deals, start underwriting them, start learning about them.

And even at that, if you want to run your own deal, it gives you an idea of maybe how you should structure it and set it up.

[Mattias]
Yeah. Makes a lot of sense. I love it.

Hey, Ian, thanks so much for being on the show. It’s been a really good conversation.

[Ian Horowitz]
Yeah. I appreciate it. It’s been fun.

I’m not going to have to Venmo you for the therapy session.

[Erica]
This one’s on me, Ian.

[Ian Horowitz]
All right. That’s how they get you guys. I just want to let you know.

I’m sucked in. First one’s free. That’s right.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.