Nathan Daniel: 0:02
All right, welcome back to the broker to broker real estate podcast. Today we're talking about profitability. And we're we're going all the way out to Phoenix, Arizona to talk to Alan Kushmakov. And so if you're ready, here we go. I'm gonna cue up the music. And let's jump right in. All right, welcome to the show. Alan, man. Thanks for coming on today. Appreciate it. Thanks, buddy.

Alan Kushmakov: 0:42
Thanks for having me. I appreciate it, too.

Nathan Daniel: 0:44
Oh, man. Absolutely. So I'm excited to have you here today. I mean, we're gonna be talking a little bit about profitability. But we're gonna go deeper than that. We're actually gonna be talking about how to scale through your the agents that you're attracting how to lead them, and having that conversation around profitability and helping people not only drive their business, but drive their net worth, right.

Alan Kushmakov: 1:06
Oh, for sure. Absolutely. Let's do it. Let's do it, man.

Nathan Daniel: 1:11
Well, before we get started, I want everybody to know who is Alan Kushmakov. So can you tell us a little bit about you, your background and your story?

Alan Kushmakov: 1:18
Yeah. So I came to this country when I was 13 years old, from a former Soviet Union back in 1990, and a Christmas Day of 1990, with, with my family, two siblings, my parents and ended up in New York City. Luckily, my dad had his aunt here for 25 years, she was our sponsor, so we stayed a couple of weeks with her and then found a place to live. The first year, year and a half was difficult. I mean, being 1314 year old boy, you know, going to school wearing, you know, Russian clothes, rushing to haircut, and all of that stuff. So kids can be pretty mean and cruel yell, picking and everything like that didn't speak any lick of English or anything like that. But figure things out adapted, started working right away, had to work, I had no other way around it. I remember my first job was handing out flyers outside of the shopping mall. For a tarot reader, like a card reader. She was paying me $1.50 an hour. So so the money that I made, I think it was like the first couple days I made like 24 bucks or something like that, it felt like $24,000 at that time, you know, made that money wrote it to my parents, so they can go buy groceries and all that kind of stuff. So since then, you know, always, always worked. And, you know, during the college years work, so, you know, kind of gave me that that work ethic and, you know, entrepreneurial spirit, if you will, from from that point on. I got married when I was pretty young, I got married at 22 years old actually got married on my birthday. So we've been married for almost 21 years. Right now I have three beautiful kids, two girls, and a boy moved to Arizona back in 2018. With the company that I was part of I was in software consulting. And after about four months or so we we got a news that the company is going to be laying off some people. So I was the casualty of a layoff, which at that time was it was it was it was hard, because we were in the process of building a house and we made that investment, you know, moving all the way to Arizona, from New York. But, you know, whatever happens happens for a reason, it was maybe a blessing in disguise, because that really kind of opened up the doors to my entrepreneurial adventures, if you will. So the next thing on the list was opening up a company at age 25, which was a luxury transportation company did that for about 10 years, sold it in 2012. But during that time, we just went through a lot of hardships, as you know, through the great recession of 2007 2008. At that time, we had a company of about 40 employees full time, part time employees with close to $2 million in revenue. And then everything just happened with with the banks. And you know, people just stopped using limo services at that time because a lot of them were financially hurting. So pretty much lost everything led to let go a lot of my people great people, half of our vehicles were repossessed, I lost all of my rental properties. Even close my my, my primary residence at that time, half a million dollars in debt. You know, it was it was tough. It was very difficult. I remember my wife at that time and we were pregnant with our second child. And you know, the toughest part about this whole ordeal was the fact that you know, that time she was back in New York because I was dealing with all the foreclosure stuff. You know, and she was giving birth to my son, that's our son and I was not there to be there with her, you know, because I was so entrenched with all the crap that was happening here with the creditors and losing our home finding a rental truck trying to figure out how to do, you know, make a payroll and all of that stuff. So it was really, really difficult and gut wrenching, you know, but again, there's that old saying, you know, whatever doesn't kill you makes you stronger. So kind of really prepared me for where we at right now, fast forward to 2013 decided to get into the real estate industry got my license, was a solo agent for first three years in business. First Year, first five months were the most difficult ones. I remember the first couple of months after doing it that was not again, like generating any income at all. three kids under the age of five. Man, my daycare bill alone was like $2,100 a month, my, my mortgage was $2,000 a month. My two car payments was another $1,000. So $5,000, a sudden, including food and clothes or anything like that going out and I'm not making any money. I was even considered getting a part time job, but I just stayed with it. Went out every single day to the office, you know, made my calls made my connections. And finally, after month number five or six, I got my first closing check. It wasn't a big check. It was like $3,000 check. But again, it felt like it was a $30,000 check because of everything that I went through. So solo agent for three years. So first year sold 16 homes second year, double my production to 35 homes. Third year with an assistant. We did 75 transactions, about $22 million dollars in sales. And then by the end of 30 years, that's when I started thinking about building it team out of necessity. I was just working 7080 hours a week I was inundated with a buyers and I was not really trying to focus on a buyers, I always wanted to focus on the listings. So hire two showing assistants one of them worked out became one of my full time agents. And that's how I started building a team had a team for about four years. And then last year, right before COVID decided to open up my own brokerage best homes real estate. And we onboard it over 125-127 agents since then. And then about seven months ago, eight months ago, we launched our own mortgage company. So, um, you know, so super excited, what we're doing, obviously, you know, a lot of a lot of a lot of opportunities I had, but also a lot of obstacles that we have to deal with in the last few years.

Nathan Daniel: 7:29
Yeah, man, what a journey. What a story. Thank you for sharing that. I what I what I heard in that. And I love this quote that you kind of put that we were talking the other day that you came up with and said, this is a great time to be in real estate. The opportunities are everywhere. You just have to do the work, right. And I heard that's what you did in 2013. Right? You just made a decision like, Hey, I gotta I gotta start working. You got to figure it out. Man, I always want to be in real estate. It's just you know, but but, you know, I was surrounded by doubters, I surrounded by people were telling me all the time like, man, there was no, there's no, there's no money in real estate. It's all commission based. And, you know, it's so inconsistent and they're like, in our, in our metro Phoenix area. So you know, we have like over 40,000 licensed agents. So there's a lot of competition, right? So there's always like douts, douts and douts and then then, like a 2012. After I sold the company, I was like, You know what, I always wanted to do real estate, I always wanted to invest in real estate. And you know, real estate, you know, owning a home when having a roof over your head is one of your key necessities in life. I mean, it's food, it's its clothes, right? And then shelter. So I was like, why not me? Why not do this. So I I sit down with this. This this guy who helped me out actually with one of my personal properties is short sale. He was running a team at that time, he still runs a team, by the way. Kevin Kaufman with group 46. And we had a great conversation and I asked him, I was like, Kevin, if I get my license, I mean, do you think I have a chance of selling couple of homes? And it's like, dude, like if you do this, like, like, treat it like a business, you treat it like a career, you're gonna crush it, you're gonna be fine. Listen to him. The next day, I got my school registration done. And then after about a month and a half, I got my license. Yeah. Well, you know, and I know you said last year and COVID, like launching had 125 agents added. So even during the pandemic, and then along the way now and launching a mortgage company. So so I want to I want to I want to transition a little bit and I want to talk about the topic of the day, which is profit profitability and stuff. And so can we dive into that a little bit?

Alan Kushmakov: 9:30
Yeah, absolutely.

Nathan Daniel: 9:31
Let's do it. So. So one thing that I found is I've been interviewing and doing the podcast and talking to brokers all over the country. One of the things that is kind of a common theme is just like with real estate agents, its finances. That leads to freedom and flexibility right even as as business owners, we want that right. We want the freedom we want the finances and everything else but and I appreciate you coming on the show to talk about this today because what you just told us is that you Had to experience some hardship. And now you've really put some things in place to help you protect against that with your profitability reviewing that actually looking at your net worth on a regular basis. Isn't that right? Yeah, absolutely. I mean, if you don't know your numbers, you don't know where you were you at and where you heading. So, yeah, exactly, yeah, you don't know where you're heading. So if I'm going to start at the beginning, okay, so I'm a brand new brokerage, I don't really do this, maybe I'm a great agent. And I and I just decided, you know, what, I'm leaving either my big box, I'm leaving my company, I'm gonna go do this on my own. And you're a great sales agent. But you haven't truly run a brokerage at this level yet? Where do you start, like shifting your mentality around really tracking your numbers? And starting to look at your profitability? Can we? Let's talk about that.

Alan Kushmakov: 10:49
Yeah, I mean, ultimately, I think what you have to really focus on is, you know, first and foremost is, is the revenue piece of it, right as, as an agent, or as a team leader, or as a broker, right? The first thing that you really want to focus on is like, I read what's coming in, right, and then based on what's coming in, you have to set your budget and what's going out. You know, I always always felt this is something that I learned back from 2007 2008 is, you know, I got financially burned during that period of time, because I overextended myself, I over leveraged myself with, with vehicles and lines of credits and, and having all these rental properties that were upside down, and essentially pretty much kind of living like, like, yeah, you know, what, it's okay, it's fine, everything's gonna be fine. You know, I'm still like, you know, growing, and I was not really leading with net profit, I was not really leading with revenue, and that everything changed since then, for me, it's all about profit, it's all about revenue, I want to make sure that we are positioned to whatever we can want to do in terms of the projects, you know, the first thing that I look at is, is my p&l, the first thing that I'm going to look at is my balance sheet, the first thing I'm going to look at is how much money I have in reserves. And if I can support that particular project, or endeavor going forward, that we're tracking your your numbers is very important, I track my numbers every single day, I go into my bank statements every single day.

Nathan Daniel: 12:19
All right, and, and are using a program for that, let's talk about that for a second, or using like QuickBooks, or zero or something like that.

Alan Kushmakov: 12:26
I use QuickBooks, you have a bookkeeper that, you know, works all of our numbers, and we generate p&l, so I can generate a p&l pretty much every single week, we generate p&l every single month as well. And not only P&L for my branch, but for other branches that are part of my my business. Yes, having access to the numbers alone is very important. It's amazing to me, that, you know, I'm talking to some of the Top Producing agents that are, you know, selling 40, 50, 60, 70, 80 homes, and none of them do p&ls. None of them have panels, right. None of them really tracking their numbers. You know, and, and having that information in front of you is is super important. Any decision that you're making in a business if you don't know your numbers, okay, you're being delusional.

Nathan Daniel: 13:18
Yeah. While you're rolling the dice, right?

Alan Kushmakov: 13:21
Exactly. You rolling the dice, whether it's a hire, whether it's a new lead source, whether it's going and opening up a new office, for example, you got to have your numbers in place. Because if you don't, like you said, you're taking chances, and you're taking risks. They're not even really measured risks. And that's the recipe for a future disaster.

Nathan Daniel: 13:42
Yeah. So I taking away from this, and I love what you just said here, and I put it up, if you're watching, you can see it here across the bottom. If you're listening, revenue in, budget out, protect your profits, right? simplify everything. That's what you have to do. And then you also said this, you look at your your, your revenue, you basically look at your numbers every single day, you can pull your profit loss every single week. And in turn, like I want to talk personally for a second, like, I know, you track your net worth, right, how often are you tracking your net worth? I track it every single month, every month, I have a worksheet that I do an Excel spreadsheet that I'm constantly updating on a monthly basis. Yeah, right. And it has everything it has, you know, obviously the revenues are coming in from the company, you know, what the companies are worth, the income that I'm generating from my rental properties, the income that I'm generating from the coaching services that I provide, so all of that is included in the net profit or or net worth sheet that I use. Yeah, but it doesn't have to be that elaborate. I mean, all you can do is just have a sheet that shows all of the income streams that are coming in right every single month. For For your from your businesses, right, and then whatever is left whatever's left, you know, so it doesn't have to be that fancy or anything like that. But for me, like, I'm constantly tracking that. And I want to know, like, I am not one of those people, which I used to be before, where I would just look at my bank account once a month. But guess it would always play in my mind. I'm always be subconscious about, you know what, I'm not doing my job as a business owner. I'm not doing my job of going there every day or every other day and looking my numbers. And then I would get surprised, how come all of this money left, right by the end of the month, and I have nothing left with. And now I check those numbers every single day. And if I see there's something happening where I don't like I stopped it. Yeah. Well, what I just took away from you saying that was if I if I'm making a decision without looking at my numbers, I'm being irresponsible, right? I'm being irresponsible for not only my business as a whole, but I'm also being irresponsible for the agents that I'm serving, right? If I'm leading agents, and I'm making decisions half heartedly without looking at those, like it's a gamble.

Alan Kushmakov: 16:18
Well, it's a gamble, right? I mean, you're absolutely right. I mean, irresponsible for your business, irresponsible for for your agents, your employees, won't comes to your family and your community. Yeah, all those things are connected. Look, it's one thing to be kind of like, like, delusional when it comes to maybe sometimes you can embellish things when it comes to your friends or save you things when comes with your friends or whatever it is. But when it comes to numbers when it comes to business, again, like I said, it's a recipe for disaster. You know, and if you're not real with your numbers, if you have real with your revenues, if you're not real with your profit at the end of the day, you know, you're, you know, it's it's just it's going to explode in your face.

Nathan Daniel: 17:00
Yeah, that's 100%. True. Well, alright, so I want to pivot just a little bit, because I mean, this is a great topic. And we don't we don't hear about it much in our industry. So again, thank you for coming on and talking about it. But one of the things that you talked about in the show today, we're talking about scaling through people, leading them attracting agents and, and growing your systems around this. So how are you guiding those that have partnered alongside of you in your organization? How are you having this conversation with them? Yeah, I mean, for me, everything that I have learned, and I'm still learning in terms of building and growing and operating businesses, I'm conveying all that information, all of that messaging to my agents, right. So I always tell my agents, we're not all about slinging homes for the rest of our lives. We're not all about showing homes, or listing homes until we're 65 or 70. Right? I mean, that's important. Don't get me wrong, that's an engine to get you to the places where you want to go, right. I mean, real estate is not who we are real estate is the vehicle to get us where we want to go. And what we want to experience. Having said that, like I'm building a company, I build a brokerage, where I show my agents, not how not only how to sell homes at the high level, but also build wealth, build business, right. And that can be through running it seem operating your branch, owning your own brokerage, buying flips, buying rental properties, I got several agents right now that are killing it with short term rentals with Airbnb ease, right, just showing them there's another way of generating wealth than just selling bunch of real estate selling real estate is fine, it's great. But that's not the only what you should be focusing on. Yeah. Another thing, for example, that we're really good at is the fact that, you know, my my ownership and a mortgage company, we're in the process of doing the same thing with a title escrow company, I'm going to be selling some of the shares of those companies, to my Top Producing agents. So they're going to have ownership of the title and a mortgage company as well. So now, again, in addition of selling real estate, in addition of generating revenue from their team, they're also generating income from their mortgage company, as well as the title company, right? So ultimately, you know, we're building a company, and that's something that I coach and I teach is like, Look, it's not just about selling a bunch of real estate, it's more about just opening or running a business that has many different revenue streams coming in, and ultimately will give you the opportunity to build wealth. Yeah, that's so good. That's so good. I hope everybody took in, like writing notes down through that because that was just that's powerful, right, and being very transparent and helping people elevate their level of thinking, as they're out selling houses as they're out making those sales they need to also be thinking about the future. So you have to start somewhere, right? So for example, I started slinging homes, right? And you know, like, and that's, again, I'm not saying it's a bad thing to do. I'm right. And we always want To make sure that the real estate sales piece of it is going right, that's again that that's the engine that you got to be constant taking care of. Right. But also at the same time, you have to be open minded, right and expanding your horizons, right and have other revenue streams that are going to be coming into your life. Not just selling homes for the rest of your life. Yeah, yeah. Well, alright, so, you know, you had you written down, he actually told me something like in the last six months, if there's one thing that you could share that you've learned, what would that be? You remember? Oh, my goodness. Uh, yeah, yeah. Yeah, I mean, any business? Man, I mean, it's, you know, any business takes longer to build and more money to build than you anticipate. right then. Yeah. Right. So, so, that's the big one. Um, you know, and again, life of an entrepreneur is it's tough. It's, it's, it's hard. You know, it's, it's one of those things where, you know, you feel like times where you're, you're, you take one step forward, and two steps back, you know, and it takes longer, right. Anything that is worthwhile, and that's again, another famous saying, or, quote, takes time, you know, and, and building a business building, a successful brokerage, building a brokerage that is profitable, building a brokerage that attracts top talent, and not only attracts top talent, but also retains that talent, which is very important as well, I mean, you can attract a bunch of people, but if you're losing a bunch of people, man, you're in a rollercoaster, right? And it's 100%. You know, I mean, we like in the last three weeks, four weeks, we lost about four or five agents, man, I was pissed. Yeah, I was not happy. I was asking myself, why are we losing these agents? You know, well, nothing, there's nothing worse than getting that text or something that was like, Hey, you got a minute. It's like, oh, man, I know what's coming in. And that's the thing and, you know, obviously, you have agents that that will have that conversation with you. And you know, you have a conversation with them. And I, you know, you know, you want them to stay, you know, but they already made the decision. But you're also get emails from your designated broker, just Hey, this guy just severed. I was like, I didn't expect this person to sever severed, you know, and it happened. So, you know, attracting talent is very important attracting agents. And then of course, you know, retaining them and making sure that they constantly see the value that you bring into their business. Well, and I you know, to wrap this up one thing, I also I also love what you said here, the short shortcut to success, I added that piece of it, but surround yourself with mentors, right to help you lead help guide you, because this, this life is tough to do on your own. Oh, man. Yeah, I mean, there's no way I would be where I'm at right now, if I didn't have mentors, I surround myself with people that guided me that mentored me, that supported my growth, but at the same time held me accountable, right, whether just mentors in office mentors, you know, outside of the industry, or paid mentors, right, paid coaches, always, always, always had coaches always have individuals that are there for me, and really helped me to, to expand my horizons and personally, you know, grow and grow professionally as well. That's right. That's right. So no matter what level you're at, if you're an agent listening to this, that's brand new. If you're running a team if you're a broker, owner leader in this industry, surround yourself with awesome people. So all right, well, everybody we've been talking to Alan Kushmakov with best homes real estate all the way in Phoenix, Arizona. So Alan, thank you for coming on the show today. If you want to learn more about Alan check it check out his website. Beshomerealestate.com, also you're on Facebook, right? Yeah, yeah. So

Alan Kushmakov: 23:47
Facebook Alan Kushmakov on Facebook, Instagram, Alan Kushmakov. And then we have our own private Facebook group page called "become best agent".

Nathan Daniel: 23:57
So check it out. Awesome. Well, Alan, thank you so much for being on the show today and talking about profitability. Appreciate you somebody thanks so much for having me.