5 Key Strategies to Raise Capital in Real Estate with Mike Ballard

Dylan Silver (00:01.191)
Hey, folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, we have co-founder Camino Verde Group, a real estate investment company based out of area Henderson, Nevada, just outside of Las Vegas. Mike Ballard. Mike, welcome to the show.

Mike Ballard (00:22.038)
Hey, thank you for having me. I’m excited to be here.

Dylan Silver (00:24.411)
Before we were hopping on here, I said, I know Henderson. I haven’t actually been to Vegas myself. Actually, that’s not true. I’ve been in there, but just because I had a connecting flight to get to DFW somehow. But Henderson, I’ve always noticed, seems to be like there’s a lot, what would you say? Cost-effective ways to make it happen in Las Vegas. You’ve grown up in Las Vegas, so that’s gotta be a different life, right?

Mike Ballard (00:48.846)
It has been, the town was so much smaller. Las Vegas is actually the biggest metro that was founded over, since 1990. So we’re the biggest city that was established as a city after 1990. not 1990, 1900. So Vegas was established in 1905 and.

Dylan Silver (01:03.963)
Yeah. So.

Yeah.

Mike Ballard (01:13.078)
You know, it has grown when it was just a little podunk town. And I remember going to UNLV football games when I was a kid and they were playing Jacksonville State and Alcorn State and all these small schools that are division three. And over time now, now they play in an NFL stadium, you know, going from a little, little, a little stadium to a big stadium.

Dylan Silver (01:31.836)
Yeah.

Dylan Silver (01:37.789)
I want to ask you about, I wasn’t thinking about this, but we’re real estate guys, And real estate investor, you’ve raised lots of capital. The Las Vegas Raiders, that’s a big deal, right? That had to be years and years. And probably many people in Las Vegas were saying, hey, we need a football team. Was that something that everyone in Las Vegas, a lot of people were happy about? Or was there a lot of people saying, I don’t know? But it seems like a good thing to have a football team in Las Vegas.

Mike Ballard (01:49.742)
Yeah.

Mike Ballard (02:04.034)
Yeah. Well, look, again, 10 years ago, we had no professional sports teams. We get the Vegas Golden Knights, and they do fantastic. You know, they’re a well-managed team. Then we picked up the Las Vegas Raiders from Oakland, and we’re excited. And then we picked up the Oakland A’s are moving to Vegas, and they just did the groundbreaking of the stadium here that’s going to be on the corner of the Las Vegas Strip and Tropicana right near the airport.

Dylan Silver (02:31.197)
Yeah.

Mike Ballard (02:32.838)
across from the south of the MGM, right? And we’re fully expecting in the next three years to get a professional basketball team in the NBA.

Dylan Silver (02:40.753)
One of the most amazing things about, I mean, you just mentioned massive expansion in professional sports teams, but seeing Vegas from afar, again, I’ve never been to Vegas, but I’ve seen now from afar, there’s so much, I would say, attraction that is also world class. It’s not just about casinos and what happens in Vegas stays in Vegas. You’ve got the sphere, you’ve got world class concerts. I also feel like you have…

a lot of world-class conferences that are happening out there. in the real estate space, people love going to these conferences. Las Vegas is one of those areas where I’m like, I bet if I lived out there for six months, it would change my perspective on a lot of things.

Mike Ballard (03:22.798)
Well, look, we do have a lot of great things to do. I joke, we’re a normal city. For those that live here, we’re a normal city 95 % of the time. But then we want to eat amazing. We eat on the strip at world-class restaurants. I’ve been able to go see Maroon 5, Shania Twain, Elton John, all these major artists.

Dylan Silver (03:50.045)
Yeah.

Mike Ballard (03:51.458)
you know, any weekend I want almost, right? There’s somebody, you know, I have my choice of 10 amazing entertainers any weekend of the year. And then we have, a lot of people don’t recognize too, we have great outdoor living, right? We’ve got, you know, south of me, there’s a place where you can hike and see petroglyphs and hieroglyphics. Another part, you go west and there’s the Red Rock Canyon and…

Dylan Silver (03:53.682)
Yeah.

Dylan Silver (04:18.962)
Yeah.

Mike Ballard (04:20.152)
People come from all over the world to visit the Red Rock Canyon because it’s just amazing topography. And then we’ve got the Valley of Fire in the Northeast, you know? And then because so many people come here, it’s so easy to go anywhere, right? There’s round trip, there’s direct flights to almost every city in the world. So it’s pretty awesome. I see a lot of benefits and you know, living in Henderson, I can drive.

Dylan Silver (04:40.967)
Yeah.

Mike Ballard (04:49.582)
to go to the airport in 11 minutes, right? And I can be dropped off and be through security in about 20 minutes from the time that I leave my home.

Dylan Silver (04:52.529)
Wow.

Dylan Silver (05:02.801)
I do want to pivot here a bit, Mike, and ask you about Camino Verde and also ask you about what was your entry point like into real estate? We didn’t talk about this in the pre-pod discussion that we had, but how did you get into the real estate space and then how did Camino Verde come about?

Mike Ballard (05:19.82)
Okay, so, and I’ve said this many times, Vegas was a small town when I was a kid and I watched it grow. And there’s two main industries in Vegas. It’s the entertainment industry, the casino world, and then there’s the real estate industry. And whether you’re an accountant or a lawyer or any other business, you’re serving people in those industries. And so I happen to spend a lot of my career working with and for real estate people.

right, developers, lawyers that did real estate work, that type of thing. And so I started getting introduced to real estate concepts fairly quickly. And then, you know, I was, you know, I tried to be a good citizen of the community and I was asked to be on the founding board of the Lead Institute for Real Estate Studies at UNLV. And between all this interaction in the real estate industry, I started passively investing in real estate.

I invested with some other real prominent, you know, some guys that worked with my dad. And after my dad passed when I was a teenager still, one guy said, hey, your dad, you know, invested with us a few times, why don’t you invest with us? And I put, you know, $10,000 into a land play for some apartment land. And that turned into, you know,

you know, six years later turned into $70,000. And I’m like, wow, that’s pretty good. And then I just kept and I did passive investments. You know, I built data centers, I invested in shopping centers and those types of things. So, you know, it was that’s how I got into it was just passively investing.

Dylan Silver (06:48.413)
That’s pretty good.

Dylan Silver (07:02.621)
And at that point in time, as far as day to day and how you were making a living, were you a real estate broker or involved in that space or how are you?

Mike Ballard (07:11.554)
No, no, no, no. I worked for two national accounting firms early in my career, right? And most of my clients were construction or real estate guys. So that’s how I did it. And then, you know, most recently I helped start Ascent Multifamily Accounting and we do back office accounting for about 50,000 units of apartments around the country.

and we’ve worked with LMC Living. We were their back office when they started their organization, right? We helped Lennar become, know, create their multifamily group and we were their back office. And then I worked with lots of small players that own one, two, five, 10 properties, and we do back office accounting for them. And pretty soon after a few years, I’m like, why don’t I buy a property? And so we decided to, I…

Dylan Silver (08:04.007)
Yeah.

Mike Ballard (08:08.488)
a gentleman that I had worked with before was selling his business and he was asking me, do I do next? And I said, we should buy some apartments together. And we went to the RE Mentor Program and learned from that experience and started buying properties.

Dylan Silver (08:25.249)
I want to ask you about accounting and real estate because I’ve spoken about this same kind of overlap with attorneys in real estate, right? There’s so much that really benefits a real estate investor if they’re an accountant. It just seems like kind of a perfect match. Do you see as someone in the accounting space and with lots of history in the accounting space

that there are a lot of accountants and people in that world who have an eye towards real estate, or are most people that are involved in accounting kind of, that may be not a thought that crosses their mind to invest into real estate.

Mike Ballard (08:59.118)
They’re too conservative. I would say 95 % of all accountants are too conservative to try to do anything significant other than passively invest in real estate. Look, it’s a great background, understanding the numbers. But look, any business you’re in, my partner and I both think, why didn’t we start investing and syndicating real estate earlier? It is a good place to be.

Dylan Silver (09:08.189)
Mmm.

Mike Ballard (09:25.806)
If nothing else, just be a passive real estate investor because the you know, and then you know if your wife’s not working or that type of thing. Designate her or him as. The real estate professional and have them go to continuing education and. That way you benefit from the the tax benefits of owning real.

Dylan Silver (09:50.449)
huge. I was going to bring that up. was going to say, you know, I have many now friends of the show and also in general out here in DFW accountants. And as you know, just because you may be an accountant doesn’t mean that you’re a tax strategy expert. Right. So there are two distinct fields. But then in real estate, there’s all these advantages that you get and that I’ve you picked up on both because, you know,

you’re responsible for all your own taxes. It’s not taken out of your check. And then also because you network with so many incredible people, you know, what is it called? Enrolled agents, know, tax attorney who are able to show you, you know, incredible strategies, many cost segregations to where you’re able to, you know,

Mike Ballard (10:35.984)
yeah, we use a third party for cost segregation. if you’re not, you know, if you’re going to hold the property for a little bit, there’s, you absolutely need to do cost segregation studies in every acquisition you do.

Dylan Silver (10:48.817)
Yeah, 100%. I want to pivot, Mike, and ask you about the Camino Verde. So you mentioned you had some success with the passive investments while you were in accounting. How did Camino Verde come about?

Mike Ballard (11:03.114)
So again, my partner had sold the business, was wondering what to do. I felt it was, and I was like, had already been scheming for a year, how am going to buy my first property? And we decided to go through the process together. We read books, know, Will Barrow Profits, you know, a bunch of other, know, Jake and Gino, we listened to podcasts, you know, that type of thing. And we said, we can do this. And so we set a very specific goal. We wanted to…

meet with brokers, we set a 90-day goal. We wanted to meet with two brokers a week. We wanted to be very specific and tell them these are the type of properties we’re looking for. And because we were new to the business, we said we’re looking for smaller properties. And then we wanted to underwrite 15 deals a week. We wanted to make a

you know, 10 offers in the month of March. We wanted to make 10 offers in the month of April and 10 offers in the month, you know, probably 20 offers in the month of May. Actually, I think it was 10, 15 and 20 we wanted to make and we wanted to have one property in escrow within 90 days. We said if we’re going to do this, we’re going to do this now. We’re going to hustle. We’re going to we’re committed and we’re going to be accountable. You know, we would have calls every other day. How you doing? How are we doing? You know, this type of thing and

doing that and basically we got to the 90 day period and we had one property under escrow. It was a 36 unit property that was the same age as I am. It was at the time 59 years old. It was you know it was an old property needed some renovation not a lot and we had to we were buying it for I think 2.8 million dollars and for 36 units and we needed to raise 700,000 dollars.

Dylan Silver (13:00.519)
So was that your first time raising capital?

Mike Ballard (13:03.576)
Well, I had been around the angel investing community before then. And in 2003, I was one of the founders of the Vegas Valley Angels, a group that like the Shark Tank Club, but we funded Vegas based tech companies, right? Tech was all the rage in the early 2000s. And we said, we should do that. And I had been involved in some tech companies after my accounting experience.

And so I had that. And so I had invested in 11 tech deals and been an executive and raised money in several of those deals as well and had had some good success, right? I had made, you know, I’d made some good money and over a couple million dollars being involved in tech. So we started this angel club in 2003.

And it turned out to be a disaster because 2008 hit and it killed a lot of companies. So I lost over a million dollars having done angel investing and tech investing. And I was, you know, for the next five years, I’m licking my wounds and trying to heal up and, you know, kind of build my nest egg up again.

Dylan Silver (14:05.149)
Yeah.

That’ll do it.

Dylan Silver (14:22.493)
And so that kind of investing versus capital raising, seems like related but different. Were you raising capital with the angel investing directly? You were doing it there too. And so going from that experience to then raising capital in real estate, was it seamless or was it were there some hurdles that had to overcome?

Mike Ballard (14:33.506)
Yeah. yeah. Yeah. Yeah. Yeah.

Mike Ballard (14:43.982)
It wasn’t it wasn’t seamless, but it was easier real estate is a better asset, right? It’s a tangible asset It’s less likely to blow up and you know You know, you’re likely to get a return in real estate even if it’s a bad return We’re in tech, you know, I invested in 11 deals and in nine of those 11. I got zero money back You know where? Yeah, and so

Dylan Silver (14:50.365)
Yeah.

Dylan Silver (15:08.189)
Yeah, you’re waiting for the needle in the haystack.

Mike Ballard (15:13.194)
know, when you’re doing tech investing, you’re investing with the idea, I’m going to make a big return and only one or two deals will pay the return for all the 10 investments that I did. And, but they didn’t, you know.

Dylan Silver (15:26.267)
And so in investing as the company is scaling, as Camino Verde is scaling, were you getting into different asset classes? Was it very intentional or were you? OK, OK. And so scaling and multifamily, you mentioned before Oppenheim, you have some aggressive goals currently. Was it a situation where you were thinking, hey, we have to get to a certain point?

Mike Ballard (15:37.417)
Very intentional just to be in multifamily.

Dylan Silver (15:53.549)
Or was it more of, let’s see how this one deal goes. Let’s hold it for a while and then see where the future lies.

Mike Ballard (16:00.014)
No, no, we wanted to buy, we set a goal to try to buy four deals in the first 12 months. And that was the goal and that’s what we accomplished. Look, 2019 was a good time to get into multifamily. I wish I’d have gotten involved in 2017 to be honest with you. But 2019, we bought four deals in the first year.

and they were 36 units, 36 units, 28 units, and 22 units, I think. Right, so that was our goal. And then we decided we saw an opportunity to buy some land. I was familiar with some.

I developed an area part of Utah that I liked and the land was inexpensive and we had some other people that wanted to come in with us so we started buying land as well there. But then the next year our goal was to buy bigger properties and so we bought, we wanted to buy one a quarter still was our goal and I worked with, the goal,

is how do you find a deal if you’re new and you don’t have a ton of experience? there’s, especially Vegas, there’s a lot of groups out of LA that like to buy in Vegas. And so we were competing. So we just felt our niche was going to be the 20 units to 150 units. And so…

Dylan Silver (17:13.105)
Yeah, exactly,

Dylan Silver (17:19.463)
Sure.

huge stress.

Mike Ballard (17:37.642)
We kept looking, but then we started networking. And I had the benefit of having this bookkeeping firm that does outsourced accounting for property owners. And I went to a couple of my smaller clients that were managers, management companies. And I said, if you want to grow your business, I’m looking to buy properties. And we had a management company out of Clarksville, Tennessee, just outside of Nashville. And she was really hungry.

And I said, find me a deal. And she said, OK. And she found us a deal. And somebody had had a property in Hopkinsville, Kentucky. And they had been renovating it. But they had, in my mind, they renovated it just to a certain point. And it still needed more renovation after that. But they were willing to sell it. And that was.

She was able to help us find our largest property and we bought in our second year, we bought a 258 unit property in Hopkinsville, Kentucky. And we were able to find some investors. We were able to buy it as a tenants in common relationship so we could help people do 1031s into it.

and we had a couple different investors that had 1031s that needed to place money and they were all about a million dollars to two million dollars. So we raised

$4 million from three people in a Tenants in Common transaction.

Dylan Silver (19:15.889)
pretty creative. You know, when I think about these these deals, I often think as an outsider without the real estate knowledge, it does seem like impossible to maneuver your way through these situations. But you mentioned the importance of the network and you had made one connection that ended up really bringing about multiple deals. And that’s so true. That’s so true. I think oftentimes when people are getting started to bring it back to like,

you know, point A is you look at, what do I have to do to learn everything? And I kind of think that that’s the wrong mentality for a lot of people who may.

Mike Ballard (19:54.228)
Absolutely, absolutely. If you wait till you really know it, it’s too late. You need to jump in. That’s the thing. That’s the thing. If I could tell anybody, we were disciplined in reaching our goals, right? And we look back and we didn’t know there was so much we didn’t know, right? And we didn’t know we didn’t know it, right? And we learned so much by doing the first couple deals. then we both there’s every deal I’ve done since again, we’ve done 19 deals. We did 19 deals in five years.

Dylan Silver (19:58.589)
It’s too late.

Dylan Silver (20:12.838)
Yeah.

Mike Ballard (20:23.98)
Right? We’ve raised $37 million from 126 people in that five-year period. And we were, you know, we have gray hair. We’d been around the block, but there was so much we didn’t know about multifamily management and that type of thing. And we’ve had challenges, but overall we’ve had four that have gone full cycle that we’ve been able to pay our investors out.

all their money plus 20 % a year for the time they invested. One property we only held for a year, one we only held for two years, and two we’ve held for more than three years. And we buy it and we sold them and we’ve got a good track record now, we’ve built off of, but you gotta get your first deal, right? And find your niche. And the other thing I tell you is you gotta get out of the house. You gotta get, go to trade shows, go.

Dylan Silver (21:12.061)
have to. That’s everything.

Mike Ballard (21:22.114)
get involved with Investor Fuel. They’ve got some great resources, right? Because we met, our first deal we did from a guy that I met at a conference who helped us do a Freddie Mac loan on the first deal. Then I met at another conference, another guy that helped us do, he did bridge loans on our next six deals, right? We did these bridge loans that turned out to be great. you know, once we did the first one,

they made it easy to finance the next ones. And they said, look, we’ve got your covered, go raise the money, right? And then also at a conference, on that very first deal, we thought we had to raise 700,000. And in three weeks, we’d only raised 150,000. But then I found another guy that I had met at a conference who asked me, how’s your deal coming? And I said, you know, we’re kind of stalled. You know, we’ve got to raise another 550,000 and we’ve got like,

a week to do it before our money goes non-refundable and we’re scared to death. And he said, look, how about I raise the other 550? Will you give me a third of your sweat equity for raising the other 550? Absolutely. We’d love to have you do that. And he did that. Right? And then we realized that that happens in the industry all the time.

Dylan Silver (22:35.485)
And you said, I’ll do that.

Mike Ballard (22:47.202)
where people are helping each other out. Once you have your deal in hand, there’s a lot of people that want to help you succeed. And so you should make sure to use them. It’s more important to get a deal done and only get 50 % of the GP of the sweat equity than to try to keep it all and then not be able to do the deal. So we’ve split our sweat equity on every deal we’ve ever done.

And now we’ve got people bringing us deals. Hey, will you be the guarantor on my loan? Hey, will you be the, you know, will you, can you bring some equity into my deal? And we say, yeah. And we’ve been able to help multiple other groups do that.

Dylan Silver (23:29.543)
You know, when I think about scaling, know, not only is that first deal important and, the subsequent deals, but that first deal important from a proof of concept. But also you mentioned capital raising and then credibility, you know, is something that comes to mind because when you are able to provide returns, that’s huge. Right. Now you’re able to benefit not just from your own efforts, but from the efforts of people who are now

you know, fans and happy to spread the word, right? So even on a micro level, as someone who may be, you know, looking at doing fix and flips, for example, single family fix and flips, and you may need like a capital partner to form an LLC with, right? That could be, you know, the start of it.

Mike Ballard (24:16.11)
Well, absolutely. And what was also a pleasant surprise, we did our first deal with 10 investors to raise 700 grand. Our next deal, we had to raise about the same amount of money. And three of those 10 invested with us the second time. And we’ve got, I probably, out of the 126 investors that we have, I would say a third of them invested in three deals.

Dylan Silver (24:35.207)
Yeah.

Mike Ballard (24:46.158)
Right. And so they’ve been putting 25 or 50,000 again and again and again. Right. And I’ve got I’ve got a handful of investors that have done six deals or more. Right. That they just, hey, I like this. You know, I like getting regular checks. I like, you know, the fact that, you know, I put a hundred thousand with you here and you return to me one hundred and sixty seven thousand in two years or one hundred and eighty five thousand in three years.

Dylan Silver (24:46.333)
and

Mike Ballard (25:15.534)
That’s awesome. And so they write the next check.

Dylan Silver (25:20.263)
Mike, we are coming up on time here. Where can folks go if they’d maybe like to learn a little bit more about Camino Verde or to reach out to you, getting in contact with you?

Mike Ballard (25:31.01)
Great. Number one, we have a website, CommunivertyGroup.com, right? And we have case studies, we have our properties listed, you know, and then fill out a form. If you want to see our next, we’ve probably got two deals coming up here in the next little while, in the next few months. So if you want to see those deals, just fill out a…

the form there and we won’t barrage you. don’t email every month or every two months. We email when there’s a deal or when there’s a piece of information we want to share. Number two, we have a YouTube channel. And so you can go to YouTube and type in Communiverety Group and see some cool videos. Like one of the properties we bought was an old motel that was used in the movie Rain Man. And we made a little video about that.

movie Rain Man and how we’ve turned it into supportive housing to help veterans that have trouble surviving without support. And so we like to give back to the community as part of that, but see how it was used in the movie Rain Man by going to our website or going to our YouTube channel.

Dylan Silver (26:41.723)
Mike, thank you so much for hopping on the show here today. It was great to connect.

Mike Ballard (26:47.982)
It was great to be a part of it. Thank you very much. I look forward to working with you more.