Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:08] Speaker B: Welcome to the Victory show where seven and eight figure founders, entrepreneurs and executives reveal the real playbook behind scaling past that first seven figures in annual revenue. We go beyond the highlight on this real on this show into the hard lessons, the costing mistakes, more importantly, the key growth inflection points and the human decisions that shape the numbers. And here's the twist. Every conversation we have becomes a chapter in our victory book series so the next generation of builders doesn't have to start from scratch. Today I'm sitting down with Walt Clemens. Walt is someone who doesn't just set goals, he compresses the timeline to achieve them. And he proved that when he began his journey with a 10 year financial plan in college that he was able to complete in just five years. From there he went on to build and lead brokerage and development firms at scale, including one organization that had 150 brokers and over 900 employees.
He's consulted for international corporations across 10 countries, earned numerous sales and leadership awards, and he even has a scholarship funded in his name. Walt brings decades of experience in growth, leadership and execution at scale. And today we're going to dive into what that looks like. Walt, thanks for being here. I appreciate you taking time to have this conversation.
[00:01:18] Speaker A: You're very welcome.
Glad I can participate.
[00:01:22] Speaker B: Well, you had a bit of what I would say an unusual upbringing and that you had just a couple of extra siblings than most people do.
[00:01:31] Speaker A: Yeah. Nine other ones besides me. Right.
[00:01:35] Speaker B: How? Like this. Just walk me through and where did you fall on that? You were number nine.
[00:01:39] Speaker A: I was number nine. Yeah.
[00:01:41] Speaker B: So you, you were almost the baby, but not quite.
[00:01:43] Speaker A: Yeah, we were all exactly about two years apart except for me and my little brother. He was six years after me. So he was the. Oops.
[00:01:51] Speaker B: Wow.
[00:01:52] Speaker A: There is such a thing when you have 10 kids, right?
Yeah.
[00:01:56] Speaker B: That's funny.
So, so that, that really sort of shaped your kind of your upbringing, right. I'm assuming with a family that big finances were probably on the tight side.
[00:02:07] Speaker A: Yeah, so they were. And, and I had a quiet dad, a very hard working dad.
He was always there for us. You know, he wasn't a smoker or a drinker or anything, but he was. Had his own business hauling pulpwood out of the Huron National Forest in northern Michigan into train cars. And he'd be up in the morning before daylight, driving his trucks out to the woods to get the eight foot logs loaded onto his trucks to take him back into town to load him into a train car. And he'd get home late afternoon, early evening and Then repair his own trucks because he owned his trucks.
So without ever telling me that I should work hard, he modeled it. And I didn't realize that until after I'd been in business a few years. I said, oh my gosh, I'm working the hours my dad used to.
And, and it was just a matter of following the example. You know, they do say that, that sons grow up to be their fathers in ways they don't understand. Well, that was a very positive, unsuspected influence that my dad had on me growing up. And of course, my mom was the classic perfect mom. In fact, after the 10 kids were out of the house, she started taking in foster children in order to take care of them.
[00:03:21] Speaker B: Wow.
[00:03:21] Speaker A: Yeah. So she was a dedicated, loved the mother role and did just a. I mean, she was a short little lady. Gertie was her name.
And boy, you didn't cross Gertie at all. As big as my brothers were, all of us were six foot or better. You didn't cross your, you did what she said made you hold the mark. But you knew, every one of us felt we were her special child. You know, she was just gifted in that way. So that.
[00:03:45] Speaker B: Wow. So to raise that many kids and then, then go on to fostering kids, that. She sounds like a remarkable woman.
[00:03:52] Speaker A: She, she was truly was delightful.
[00:03:56] Speaker B: All right, so came from a hard working family with a loving mom.
Finances were tight.
So how did that dictate? I mean, obviously your dad was working for himself. Did you, was college always on the, the radar for you back then or what? Was there a specific point where you said, because it sounds like you could have gone, like, I'll be like my dad and I can work for myself, or you could go to college. And was there a inflection point that, that made you realize that you wanted to go down the college path?
[00:04:25] Speaker A: I don't know when it was, but sometime in my childhood, I pictured myself working in an office building in the world of business.
And I didn't know where the building was, I didn't know what type of business it was. I'm not even sure if I knew what the business world was when I had that vision in my mind, but somehow that got planted in my mind.
So when I, when I, in high school, I was in the band and we had magazine sales every year, every year I was a top salesman for magazine sales.
[00:04:55] Speaker B: Oh, that's funny.
[00:04:56] Speaker A: So I had, and none of my siblings were, were that inclined towards interaction with other people, engagement of other people so much.
And so I, I Figured I had an ability to communicate with people and get trust and so on at an early age.
And then when I got into college, you know, as I mentioned earlier, I had those three jobs to work my way through. It was my senior year in college that I got licensed as a real estate person to help sell lots to finance my, my final year of college.
[00:05:31] Speaker B: So what, was there anything in particular about real estate? Because that's. Most people kind of get out of college and are a while before they kind of settle on it. So you were going to school and then you also had to go to school to get your license. So did you meet a real estate agent or just. You just sound like a good idea. Did you get recruited?
[00:05:51] Speaker A: Well, actually, I got recruited, yeah. As I mentioned, one of the jobs I had was playing in a band three nights a week.
[00:05:57] Speaker B: Oh, what did you play?
[00:05:58] Speaker A: I was drummer.
[00:05:59] Speaker B: Drummer, all right.
[00:06:01] Speaker A: And, and one night in a bar, there was this guy who has just started a real estate development project in the center of Michigan, a resort development project. And he was recruiting salespeople and they said, you ought to get your license and come to work on the weekends. We'll train you how to sell and then you can sell these recreational lots up in Northern Michigan. I said, okay, fine, I need the money, I'll do that. So that's the reason I got my license, is because I was invited into that job to sell recreational lots on weekends while I was still in college.
And then, and then my 10 year goal that I shared with you earlier, that my finance professor required us dive
[00:06:45] Speaker B: into that because, you know, I had that conversation off, off camera. So you had a, it was a Finance 401. Is that what you.
[00:06:51] Speaker A: Yeah, Finance 401 class taught by an adjunct professor who sold insurance products for a living.
[00:06:58] Speaker B: Wow.
[00:06:58] Speaker A: Yeah.
[00:06:59] Speaker B: Okay, so tell. So you got in the class and, and to summarize, he, he sat down and asked you, where do you want to be in 10 years? And it just wasn't that. But he helped you create a 10 year plan, is that correct?
[00:07:12] Speaker A: Well, actually, he started the class by saying, I want you to imagine I have magical powers. And those magical powers is I can grant you one wish.
That one wish is where you want to be, what you want to have and what you want to be doing 10 years from now. The only thing you have to do is write it down, make it very clear, and give it to me. Now. You've got two weeks. He says to come up with this, talk about it with your significant others, your very close friends. Make it real and make it as big as you want it to be. I got two weeks. Go ahead and do that. And then he started talking about the Wall Street Journal and business and everything else till we turned it in.
And then after we turned them all in, he said, okay, what would it cost you to be in that position today?
And he said, okay, now with inflation the way it is, what will it cost you 10 years from now? So you had your 10 year number in order to get to that goal.
And then in teaching us business math, compounding and discounting, he said, okay, five years from now, how much money will you have to have three years from now? How much money? And so on back to where he eventually came back and said, okay, what are you going to do tomorrow to get to that goal?
[00:08:20] Speaker B: Now did it take you the full semester to kind of build out this plan?
[00:08:24] Speaker A: Yeah, yeah, it was a whole semester deal. And I had to do five years. Now when I went to school, right? That was in 1970 when I went to school. 71 when I got my real estate license, we were doing things on graph or on ledger paper by pencil. We didn't have computers and spreadsheets back then. And you had to do a five year line by line item budget of your income and expenses to how you were going to live over the five years to get to your first five year.
[00:08:53] Speaker B: Wow. Now that is, that is really diving deep into the financial side of things.
[00:08:58] Speaker A: He really did. And, and he said, don't live like a pauper. You got a right to enjoy life. So if you want to buy some toys or go on a vacation during the five years program that in, you just have to plan for it and then decide what you have to do.
And as we were talking earlier I mentioned I need about three times more money than all my fellow fraternity brothers were getting. Taking employee jobs for hire from corporate America as marketing analysis trainees, right?
And so I knew I had to go either in a professional entertainment or sales.
And as I mentioned, I had a track record of being fairly successful at sales, both in the high school magazine thing and in the, in the selling recreational lots at that lake project.
And so two guys from the lake project said, now I went to school at Central Michigan University, right?
This was up in, and just north of there in Michigan. And these, these two guys were moving back to their hometown in St. Joseph, Michigan, which is right across the lake from Chicago.
Lake Michigan, right across from Lake Michigan. And they said, we're going back, we're going to the residential business. Would you like to come and join us because I'd befriended these people. They were a little older than I was, they were mature and had families.
And I said, well, let me think straight. Commission income, unlimited earnings potential. That's a path I can get to my $36,000 a year goal that I need to get there. So there wasn't any question or agonizing about whether I should do it. It fit into the plan.
So, so having that, that carrot 10 years out there, having that goal, having the plan to crystallize it to, made it so real I could get there. All I had to do is take the steps to get it. And when the door opened then I knew that was a door I had to go through, didn't have to agonize over, go. So my wife and I packed up everything we had in a little 4x5 trailer and all my credit cards were extended and I went to work for a guy in St. Joe, Michigan who loaned me $500 for deposit on the apartment for me to move into town.
[00:11:12] Speaker B: Wow.
[00:11:12] Speaker A: I started with, you know, minus nothing to go, but. But then I was so excited about getting to that goal.
I would be in the office before anybody and start calling people and making calls. And I would be there until the evening after everybody's gone on appointments and everything else.
In the first year in the business, I was top salesman in southwestern Michigan.
And it didn't feel like work because it was all so meaningful to me. It was getting me somewhere.
There was a reason why I was doing it that was so exciting and that's what was motivating me. Well, that went great for about three years. The guy I went to work for was really a four person. Well, he was a one man office and he had one retired lady working for him. So we made it like four people and then we expanded it. He offered me a 25% ownership after my first year in the business. He wanted me to stick around. Then the second year of the business, he offered me another 25%. We became half owners, ended up opening up seven offices, having 100 brokers in, in residential real estate in southwest Michigan and northwest Indiana.
And, and about three years went by, I kind of lost my enthusiasm for working. And my wife and I were talking and she said, remember that goal we set out that we charted when you graduated from college from your finance professor? I said, yeah. She says, well, have you pulled that out and looked at it?
And what had happened is that I had learned a new career, a new path. I had changed. So my 10 year goal wasn't exciting to me anymore as it was when I started three years before.
So I spent the next weekend restructuring the goal and setting out what I thought would be more meaningful me down the road. Man, I had enthusiasm. Back to work again.
[00:13:08] Speaker B: So did you update it so that now it was. Where would you be in seven years since you already had three down?
[00:13:13] Speaker A: You know, everything was going so well. I just kept doing everything the way I was doing. I knew that I didn't need to have that plan anymore. So I did not update it. In answer to your question retrospectively, maybe I should have. Maybe I'd be even further than where I am today. I don't know. But I was, I was happy, you know, started having kids. We had a family, we had a home and. And then I took some commercial real estate courses from an institute out of Chicago that offers a designation in commercial real estate. It's called ccim.
And. And I got really excited about creating wealth via real estate investment properties and so on. Well, by then I was getting very tired of managing all these residential brokers and so I told my partner I'm going to start a commercial division.
Well, we did. Started a commercial division that was going well and then somebody came along and bought out our residential division from my partner. Stayed with residential and I opened up Clements Investment Realty in St. Joseph, Michigan.
And I was at 25 years of age now in my own business with a staff of four or five people.
[00:14:22] Speaker B: Wow.
[00:14:23] Speaker A: And I had, I completed the CCIM training which is again a lot of business math with financial models designed for real estate specifically. And that gave me the knowledge and the courage to start a development project which was a 210 slip marina with 80,000 square feet of stack storage and, and sales area right on the St. Joe River. That was my first deal. 25 years of age. Right. A multi million dollar deal. Took me three years because I was, I was asking for, for, you know, not for permission, I was asking for forgiveness. Just moving along, making mistakes along the way but, but I learned from those mistakes and it worked together.
Ended up having the founder of Whirlpool as one of his grandsons. Is one of my partners in the first deal.
And as that went on as Whirlpool's headquartered in Benton harbor right next to St. Joe, we ended up doing a mini storage facility and then we ended up buying 10 fast food franchises. And my ability to financially model everything out to where you could see how the deal would work on paper and the idea with concept was solid, enabled me to bring partners in to fund these investments and take ownership with them and so on. Well, then of course, the recession came along in 1983, interest rates went up to 22%.
My business was going in the tank.
[00:15:52] Speaker B: I just want to stop for a second there because right now everybody's complaining because interest rates are what, 8%?
[00:15:57] Speaker A: Yeah. The other seven. Yeah. Six and a half are a home. I think right now. Yeah,
[00:16:05] Speaker B: 22% is what it was.
[00:16:06] Speaker A: Yeah, 22% was the prime rate. Yeah. At the time. And, and I was at an instructor meeting. I became an instructor in the CCIM Institute to help teach people some of these skill sets so they could enjoy the success that I've had along the way.
Unfortunately, there isn't a part of it that talks about the importance of crystallizing where you want to be someday and truly getting motivated from within, because that's the only motivation that will ever be sustain for someone in business is something that's internally motivated. Nobody outside can motivate you. As much of the sales speakers all say, oh, come to my seminar, we'll get you rich, we'll get you excited, go do this. It's very short term satisfaction. Right. So it's got to be something that's really internal and meaning to you. And I found that as I counseled some of my salespeople over the year, that a lot of them haven't been trained to think about what's important to me. A lot of them are thinking about how can I please other people, how do I look to other people?
And they aren't thinking about what's really critical for me long term. If I was magical and I could wave my wand and give you a wish to where you wanted to be 10 years from now, what would that be? And I just get blank stares.
They have a hard time putting it into writing.
Interestingly enough, my first goal that I sat down, that I wanted back when I was in college was to own and operate a marina up in Tawa City, Michigan where I grew up and have a snowmobile sales in the wintertime, sell boats in the summertime, and then open up a restaurant next door to where I could play in the band in the restaurant on the weekends using my sales skills and my music skills right when I was 21 years old, man, that was an exciting dream.
But as I grew up and experienced life and learned how dangerous owning restaurants are and fluctuating sales and thing, my, my goal changed, you see. But, but interestingly enough, the reason I shared that is because when the people walked in my Office to do the marina. There was a couple. She was a, she was a accountant for a dry cleaners and he was a forklift truck operator.
And they said, We've got $500 and we've seen this land on St. Joe River. We'd like to build a marina there. Can you do that for us?
Right. I mean, what's the odds of SIB? So say, sure, take your $500.
I said, sure, I can do that. Because I, I knew there was a marina. See, the marina triggered something that was toward my 10 year goal and I ended up owning 30% of it. And, and using that, that financed my move from St. Joe, Michigan down to Kansas City in 1983, where I became a sales manager of an 18 person commercial real estate brokerage firm.
And then build that up to 40 brokers. And we were knocking down $200 million in sales a year.
And then the tax reform act came along that put the real estate business in the tank again.
Well, I convinced my, my employer, who had me on a sales manager salary and incentives to put me back in production, and man, I was already back in sales again. It just felt so good to get out of management. And I was just, you know, kicking butt, taking names. It was working really good.
Well, then eventually our company that I went to work for in sales merged with another company out of St. Louis. It was Colliers, Turley Martin at the time.
And then. And we merged with them and I found out that they had 60% of their revenue from contracts like they did all the site locations for H and R Block around the country, all this, all the site locations and lease negotiations for Edward D. Jones around the country.
And so when I saw that they had 60% of their revenue is fixed income, not brokerage incentive income, which is a shaky part of a brokerage world. I bought in stock into the company and became a senior vice president of the firm. Wow. Well, from there is where we built that commercial firm. We acquired offices in Indianapolis, Cincinnati, and we got up to five or six offices. And it was 350 brokers that we had and 900 employees. Employees.
That was a senior vice president principal with that team that built that.
And then a friend of mine said, I have a client that wants us to build them a building.
So I sold my stock in the company, which had tripled, doubled six times over what I paid for it. And that funded my start into the real estate development business.
Wow. And so it was a real interesting scenario that the opportunities that come up as it fits along, developing the dream Right.
So we started.
A client wanted us to build them a 30,000 square foot office building.
So I found a 20 acre piece of ground and of course you only need a couple acres to build a 30,000 square foot building. So we had the opportunity to build other buildings. Well, it took capital. So I again, like I did in the good old Marina days, went to clients that I knew had money, did the financial projections, showed them why this deal would work, raised the capital, and we ended up building out 50 acres of around with about 14 different buildings and about $60 million worth of real estate that we built out for users and pad sites that we sold.
And then 2008 came along.
You know, as I tell my students, I've been rich and poor and rich and poor and rich and poor and
[00:22:06] Speaker B: uncomfortably, you've seen, you've seen a few booms and busts.
[00:22:10] Speaker A: Oh, gosh, yeah. I've lived through at least three recessions. Yeah.
And, and one thing I found out is I've always been on the education train knowledge base.
When I was 50 years old, having taught the CCIM courses to people around the world, I've taught in nine different countries.
I thought I knew pretty much everything about commercial real estate, having been successful as a broker and a manager and so on.
And a friend of mine started a program at University of Denver, an executive master's program in real estate. And he convinced me to sign up for it. And I told my broker at the time, which was my partner in the Collier's group, if you fund my master's degree, I'll write an education program for our company.
So he agreed to that. So over the next two years, I got my executive master's from University of Denver after I was 50 years old and had no idea I knew so little about this asset class.
There was so much more to know.
So, and in fact it was when I completed that course, it was an executive master's in real estate and construction management. So that gave me the comfort level and the knowledge to start my development company.
So I armed myself with the right tools, with the right training, with the right education before I launched into this, this dream or this plan. Because to be a developer and have all the development stuff you want and create wealth is pretty cool.
Until we were had every piece of property under contract ready to sell, and within 30 days, my net worth went from 5 million positive to 3 million negative.
Because of 2008, the crash, everyone.
[00:23:56] Speaker B: You're not the only one. I've got several friends that they had similar.
[00:24:00] Speaker A: Yeah, yeah, I know I'm not alone there. But, but all my, all my deals fell apart. Everybody lost their financing and there I was with developed property, with property taxes, insurance, 17 LLC, different lenders, and had to negotiate my way out of that. Well, I, you know, I'm a pretty strong Christian guy and I do believe God's has his hand in my life and, and steps. Because then a wealthy family wanted to start a real estate program at the University of Missouri in Kansas City.
So they said, you know, you've been teaching these CCIM courses, practically everybody in our real estate businesses town is taking classes from you. Why don't you be the director of that program?
And I said, huh, academic. I really enjoyed my teaching roles, really enjoyed my teaching roles a lot.
And so the thought of being a professor on a college campus had a, was attractive to me.
So I said, well, I don't have any idea what I'm doing, but if you want me to try to do that, I'll do that. So we negotiated a deal and I became the founding professor of the Master's degree program which is now up and running at UMKC in Kansas City.
Wow. Full undergrad at a Master's degree program that I got up and running within five years not knowing anything about academia. And that again is where I just started asking for forgiveness and not asking for permission. Fortunately, there was a lot of well heeled financial people in Kansas City that were supportive of my initiatives and so I had a lot of political support to get it across the line as well as the dollars.
So that worked for five years and I got it up and running. And then my wife had an opportunity to become the chair of Family medicine for Northwestern University in Chicago.
Wow. And it was at the stage where there wouldn't be any more opportunities like that coming along for her in the future if she turned that one down. So we ended up moving to Chicago and she became the, the, the chair of the Northwestern Medicine Family Medicine Program and the CCI Institute then had lost their director, their CEO. And so they said, hey Clements, you've been with our organization for 40 years. You know our organization inside and out. Why don't you be our CEO? I said, well, I don't know anything about association management, but I know the organization and the players and the people. And I've served on the Treasury Committee, so I know the numbers. So not doing anything else, sure, I'll take that job.
So I was CEO of the institute, but again it was having that solid body of knowledge in one asset class and specializing in that that has opened up the doors to a lot of different opportunities. And then always doing the litmus tests. Does this fit into what I really want to go to and do next? Right, and then, then that, that, that worked for two years. And then this company that owned a large portfolio of assets in Kansas City, their president and operating officer got ill. And I had been on their board of directors for the last 10 years. Right. Paid board of director member. And they said, hey, Walt, you know, real estate, we got a major lease deal up here. Our president has got some issues. He can't deal with it. Can you come down and help us put this deal together?
Said, sure.
So my, my job at the CCI Institute ended right when this opportunity opened up.
Well, long story short, that turned into four years of them flying me back and forth from Chicago to Kansas City every Monday and Friday until I got the portfolio managed and brought up to a high level of income where we could actually create a $80 million capitalization of that whole project for the family.
And it was a complicated structure. It took a lot of people, a lot of knowledge. All of my years of experience, I've used everything that I learned along the way in order to deal with these, you know, 29 buildings that had been owned in the family for over 50 years. We had 900 title exceptions to deal with. There was $250,000 worth of environmental issues that had to be resolved.
But with all of that background, it led me up to getting the whole deal done.
And so that's. And that's pretty much now what I do is I'm enjoying still teaching for ccim.
I teach online and I teach internationally as well for them. And I do some expert witnessing. Attorneys have found out about my reputation and experience, and so they contact me in order to, to do that.
So that's kind of the, the storied life. Now. I'm very comfortable at 76 years of age being just as busy as I want to be. I'm in good health, and my mind, I think, is still working fine.
Maybe after this interview and I hear myself, maybe I'll second thought of that, but we'll see.
[00:29:10] Speaker B: But so final question for you before we wrap up. Having, you know, managed, you know, hundreds of brokers.
What is like, are there one or two things that were common in the brokers that act just crushed it, versus the ones that either failed or just kind of existed? They kind of got by. Like, was there.
[00:29:32] Speaker A: Yeah. Interestingly enough, along the way, I did a lot of training and consulting for other firms of high Producing firms and we'd put them through personality testing.
And that was one of the services that we offered is let's find out the profile of the most successful people. And then so when you hire, you can hire into that profile. And some of the profile was that you really needed people that were very competitive and they were a little bit marginal on the ethics side. They were willing to push the ethics a little bit in order to get their deal done, but not so much that it damaged their reputation because long term reputation, credibility and reputation is really important in this business. Right. But they had that computer, that competitive, fierce edge in their personality type to win along the way and. Or they knew where they were going or what, why they were working. See, see, I've come to the conclusion that most of us don't necessarily love the work we're doing. Even though I happen to be lucky enough to really like what I did. A lot of people are doing it. So it gets us someplace else. That big dream that Marina, that I wanted to own in the future, that's why I wanted to work so hard. That's why my work didn't seem like work, because it was meaningful. It was getting me someplace. And that's where people don't, I think where they lose out on life is they, they've lost their.
Simon Sinek, you've read him, I'm sure, the why, right? Yep, yep.
[00:31:04] Speaker B: Start with why.
[00:31:05] Speaker A: So why are you doing it? What's it all about? And that, and that's what really worked for me to get me started was that I knew why I was doing it and it was a pretty exciting why. And so, man, I was charging ahead and my wife was on board and everything just worked just great.
So that kind of a long answer, your question. Sorry.
[00:31:25] Speaker B: So if somebody like, you know, they're listening to this episode or reading the chapter in the book and maybe they want to hire you for some consulting, how do they find you? Where do they go?
[00:31:35] Speaker A: Oh, gosh, you know, I just am in the process of setting up a virtual office because I'm licensed in three states now, Illinois, Missouri and Kansas.
And I have to have a residential office or a virtual office to be licensed in Illinois. So I did just start a website. Clementsrealtyadvisors.com Clementsrealtyadvisors.Com yeah, perfect. So that's a place. It's a brand new, very skinny website. There's not much information on there other than how to contact. Contact me.
[00:32:07] Speaker B: Well, that's all we need for now.
[00:32:08] Speaker A: Yeah. Okay, good. Well, you got it.
[00:32:11] Speaker B: Well, Walt, this has been a fantastic conversation. What a. What a journey you've had. Thanks for taking time out of your day to be here having a conversation with us.
[00:32:19] Speaker A: Well, thank you for the time. I appreciate you reaching out to me.
