Steve Pollack’s eclectic climb to the top of a 60 billion dollar industry

Long before earning his doctorate in optometry from UC Berkeley, building a successful optometry practice, investing in rental properties, playing professional poker for several years, or building the multi-billion dollar lending company he now leads, Steve Pollack always knew he wanted to be in business for himself. His first successful business was as a young boy mowing neighborhood lawns in New York, and as he went on to travel a diverse landscape of career choices, Steve held on to the entrepreneurial spirit and work ethic he acquired early in life.

With an early love for board and card games and a head for numbers, that Steve would be drawn to professional poker—and ultimately choose banking as the career he’s most passionate about—makes perfect sense. It’s the nearly twenty years he spent building an optometry career that seems a bit of an odd choice for this man of many interests.

“I am intrigued by complex systems and was a bit of a science geek from a young age, so I was naturally drawn to the study of human physiology. I completed my undergrad in psychobiology and my doctorate in optometry, and I built a successful practice and spent ten years helping eye patients. Over time, I realized I was not as passionate about the career path I had chosen as I was expecting,” Steve explains.

Steve sold his practice, expanded his rental property portfolio, and found success playing poker professionally. In his seven years as a competitive poker player, Steve says he never relied on luck. Although the smoke and mirrors of high stakes poker might give the illusion that luck rules the table, the truth is that the player’s ability to analyze all the available data determines the win.

“It would not be possible to support yourself and make a living and be successful for seven years continuously if it was only luck,” Pollack told Originate Report. “Because luck eventually catches up with you, right?”

Though Pollack’s been out of the competitive poker game for more than 20 years, that ability to analyze data serves him well today as CEO and co-founder of Calabasas-based Anchor Loans. Pollack’s company was the first in the industry to fund over a billion dollars in loans in a single year and remains an industry leader with over $8 billion in loans to real estate investors looking to fix-and-flip properties.

Here’s how Pollack found success, what his life’s like today, and how he plans to navigate the uncertain road ahead for businesses wrought by the global pandemic.

From Optometry to Real Estate Investing to Poker

Pollack began as an undergraduate student at the University of California, Los Angeles then earned his doctorate in optometry at UC Berkeley and started an optometry practice in Stockton, California.

“I started my own business, my own practice, and ran it for 10 years,” Pollack said. “I built it up and started with no patients. Day one, I opened the doors, no patients, and did what I needed to do to build up my practice to a busy, thriving practice.”

Working with a partner, Pollack developed an active business. But after many years of success, something was missing for Steve.

“We were both busy and I realized in year eight or nine that I didn’t want to do this for the rest of my life,” Pollack said. “It wasn’t what I hoped to be my life’s work, so I ended up selling my practice after 10 years to my partner.”

A side career had emerged during his time as an optometrist, with Pollack buying rental properties. In fact, he purchased two rental properties before ever owning a house for himself. So, when Pollack left optometry, he went into real estate investing full-time and “basically did what Anchor’s borrowers currently do.”

Purchasing distressed properties, Pollack would fix them up and often resell them. Sometimes, too, he’d hold onto the property, find a tenant for it, and refinance. This is what real estate investors refer to as a “buy and hold strategy”.

Business moved briskly for 2-½ years before a 1990s recession made things much tougher.

“I still had my rental properties, but buying, fixing, and selling was problematic,” Pollack said. “At that point in time, I didn’t have a problem living per se, but I wasn’t making a living because I wasn’t selling any of my properties.”

The poker table beckoned.

Competitive Poker

As a child, Pollack had always been a good player of games, from chess to gin rummy to poker. This continued well into Pollack’s optometry career when he would travel from Stockton a few weekends every summer to the Nevada side of Lake Tahoe, where he could legally play Hold ‘Em.

“I would always be successful playing up there, and so I just kind of stumbled into it,” Pollack said.

Pollack never made a conscious decision, he explained, to seek out poker as a full-time profession. But he was a good enough card player and it was fun enough, at least in the beginning, for Pollack to transition.

Professionally, Pollack played games like High Stakes Hold ‘Em, No-Limit Hold ‘Em, and Texas Hold ‘Em, generally opting to play in cash games rather than tournaments. Throughout, he pursued his craft strategically.

“It’s a game of skill and it’s a game in which you not only have to assess mathematical probabilities and situations based upon cards,” Pollack said. “It’s a game of understanding people and their habits and reading them and picking up tells, if you will. You have to do all these things in the (space) of sometimes 15, 20, 30 seconds.”

Pollack did well enough as a professional card player to forge a seven-year career. There were drawbacks, though.

“The problem with playing poker as a job is it’s a job in which you have no vacation pay, no sick pay, no health insurance, and many days you show up at work with a pocket full of money and go home (from) work with no money in your bucket,” Pollack said. “It’s not your ordinary job.”

Then there were the health risks to consider.

“At that time, there was smoking allowed in the casino,” Pollack said. “I went to work every day and had to sit around people smoking, which I don’t particularly care for.”

So once again, Pollack began to formulate an exit strategy. Armed with his winnings and two friends he’d met on the professional poker circuit, Pollack began to invest in real estate trust deeds.

“I wasn’t the broker originating the loans,” Pollack said. “I was just the money behind the loans with some of my friends, and so I became a trust deed investor.”

In time, Pollack and the two friends — Dan Harrington, a 1995 world champion of poker, and Jeffrey Lipton — realized they could provide a better lending service if they cut out the brokers and worked directly with real estate investors.

“My friends and I wondered why we were investing money with other brokers when we could have more control of the situation, originate stronger loans, and make a business out of it.”

So, in 1998, Pollack, Harrington, and Lipton pooled their money to form Anchor Loans.

Lending like a Poker Player

Technically, poker and real estate lending are two different things. But a former competitive poker player like Pollack can easily see some of the parallels and where to apply his past success from the card tables.

“The same skills and game theory apply to analyzing real estate risk. Whether you’re directly investing in real estate, or indirectly investing by lending and being one step away from the collateral, you still need to read the borrower’s motivations, truthfulness, and habits,” Pollack said.

In 23 years, Pollack has thrived, transforming Anchor Loans into one of the top fix-and-flip lending companies in the United States. Operating in 47 U.S. states and Washington D.C., the company works with applicants who might struggle to obtain traditional mortgage financing, providing them with fast, reliable, and flexible loan options. Pollack’s insistence on providing borrowers with “an exceptional customer experience” keeps people coming back, with over 85 percent of Anchor Loans’ borrowers being repeat customers.

The firm has grown steadily despite national economic crises, navigating its way through the 2008 and 2009 global financial debacles and ultimately emerging stronger. Pollack said that in 2016, Anchor became the “first private money platform to originate over $1 billion worth of loans in a calendar year, and we have met or surpassed that amount every year since,” which he counts among his proudest professional achievements.

But success is not just about making money for Pollack.

“I enjoy mentoring the team at Anchor, helping them reach their potential and grow their careers,” Pollack said. “I also enjoy the intellectual exercise of running the business, risk assessment, structuring loans, and helping borrowers realize their goals and their aims-not just in their financing, but in their overall business.”

He’s also emerged as a leader in the lending industry, becoming involved with the California Mortgage Association in the early 2000s. In the years since, Pollack has served more than a decade on CMA’s board of directors and spent a term as the organization’s president.

Life outside of work is good, too. A longtime student of martial arts, Pollack picked up Tang Soo Do in his 50s and spent eight years earning a black belt. Pollack also appreciates his home life, saying he has an awesome family and great relationships with his wife and daughter.

He rejects the idea of work-life balance.

“I don’t look at it as a work-life balance issue,” Pollack said. “I look at it as, make a choice as to what’s appropriate on any given day and make every moment count whether you’re at work or home.”

Now, everything that Pollack has done has prepared him for the latest crisis facing his business and America.

All in Against Coronavirus

Like many companies, Anchor Loans had few remote employees when rapidly-rising numbers of cases of the novel coronavirus, or COVID-19, necessitated mass transitions to working from home.

“We didn’t have remote office workers, but I always believed that there are only three things that keep remote workforce from being efficient: the bed, the refrigerator, and the TV,” Pollack said. “I still think that’s a problem for many people that are working remotely today, but they’ve gotten used to it.”

To help employees, Anchor Loans has provided them with tips such as how to structure their days, make sure they take breaks, including breaking for lunch, not just eating in front of the computer.

Things have definitely changed for Pollack’s business, he conceded, though good has also come of it.

“I actually found that our management and executive team’s conference calls are a little bit more efficient,” Pollack said. “Everybody shows up on time. They’re focused.”

Moving forward, Pollack is guardedly optimistic, even with the economy still unpredictable.

“This is not 2008 and 2009 in which there were many people upside-down on mortgages and unable to pay,” Pollack said. “There is a ton of equity in properties across the nation that will, I think, support price structure for the price valuation for the most part.”

He added, “However, having said that, anybody who can tell you what’s going to happen in a given market with certainty six months from now or nine months from now is fooling themselves.”

To protect against risk, Pollack has taken a number of safeguarding steps, including restructuring underwriting guidelines and lowering leverage ratios, but otherwise continuing to lend. And he’ll keep doing what he’s learned to do well in life: welcome change, adapt, and make the best of the new normal.

To learn more about Anchor Loans, visit https://anchorloans.com