The Mortgage Observer recently spoke to Jerry Swartz, who last year struck out on his own to found HKS Capital Partners after almost 40 years at Pergolis Swartz Associates. He shared what motivated him to wind something up, at an age when most might be focused on winding down.
The Mortgage Observer: You were a founding partner at Pergolis Swartz. How did you get your start in the business before that?
Jerry Swartz: I was in the manufacturing business and in 1970, I think it was, there was a credit crunch and the entire industry did not do well and we closed that business up and I was looking for something. At the time I was in contract on a house. I had my first wife and two young kids and when I closed that business up, I had no means of closing on the house, I had no means of income and I needed something that was going to generate income for me quickly. And a friend of mine was in the real estate business and I spoke to him about it and he told me that I should get into brokerage, because once you learn the business, you’re generating fee income and as soon as you can close it’s faster. I was naive enough to go with that and I went to Sonnenblick Goldman and I got a job there on straight commission and it was very enlightening because I really didn’t know—other than the mortgage I was going to get on the house I was in contract on—I didn’t know what a mortgage was. But it was a great shop. I listened. I learned. I remember in the beginning when I would make a cold phone call and someone would ask me a question, I remember specifically someone asking me what the current pre-payment penalty is on a mortgage. And I said, “You know what, I’ve got another call coming in. Let me call you right back.” And I went and asked one of the other brokers what a pre-payment penalty was. That’s how basic. I really did not know anything. But anyhow I learned and within six months I had some closings and made some nice money, and the next year I doubled that income and so on and so on and so on and it was great. I was there for four or five years and then I met Richard Pergolis there. In ’74 or ’75 we formed Pergolis Swartz and forty years later, or whatever it was, in 2011, we started this company, on April 1 of 2011.
What was it about the market that made you think it was a good time to start something new in 2011, and how long had you been thinking about doing that?
The market was beginning to get a little better. I wouldn’t say it was good enough to launch a new business. However, what happened at the other firm was a philosophical different between my partner and me—just in the way that the business was done and in the approach that each of us took. Even geographically within the office. We had 5,000 square feet of space; I was literally in the back, he was all the way in the front. And a lot of the young brokers that we had—we didn’t have a lot of brokers, but the ones that we had, Ayush [Kapahi], for example, and John [Harrington], the two that came with me—were in the back. And I kind of morphed into deals with them because they were there and they were in my office a lot and we talked about deals.