Work record / Capital / Silver Mountain Ranches

Silver Mountain Ranches: real land, paperwork that did not hold up

The land at Silver Mountain Ranches is real. The capital claims around it did not survive a check at their source, and we rebuilt the package from there.

The seat

I held capital structuring and diligence on a Common Ground engagement in northern Arizona. It began in 2025 and is still running.

What I was brought in to decide

Silver Mountain Ranches is a planned community of homesites, 344 acres up in northern Arizona's high country. The sponsor held the land outright, no debt against it, backed by an appraisal and nine certified water wells. What he needed was a development partner and a raise, so the parcel could become homesites.

The raise package had six parts: an investor deck, an underwriting model, a named fund as backer, a letter of intent from a senior lender, a proposed investor entity to hold the equity, plus an offer to compensate the incoming developer with convertible paper the sponsor issues himself. No one had tested those parts against each other, or against any primary source.

What we did

• Before looking at the market, Common Ground tested the package against itself. The deck pitched a subdivision of 40 lots, and the model underwrote a resort of 35 rooms. A senior loan gets repaid differently by those two businesses. So nothing in the raise could go out the door until the sponsor chose which one he was building.
• I searched for the named fund in SEC EDGAR Form D filings, in the Investment Adviser Public Disclosure system and with the state corporation commission. No channel where a fund making that claim would ordinarily appear could confirm it.
• I went to the lender directly about the letter of intent and checked it against the county record. The window had closed, and nothing was recorded against the parcel.
• The principals behind the proposed investor entity could not be confirmed either, so we could not rely on the equity structure as it was written.
• Common Ground would not take payment in the sponsor's paper, and we made that a condition for walking away. That paper paid out only if the raise we had just discredited closed regardless.
• Walking away was not the move. Our counter had a staged floor of cash and a minority stake in the project that vests as milestones are hit. It also set up a placement engagement apart from ours, through a licensed advisor. We proposed Prince Capital for that role, paid in cash only on capital that closes. We asked for information rights and consent rights, a ceiling on the developer fee, and Arizona law to govern. We reworked the financing request into an investment memo, scaled the senior ask to the appraisal, and sent it to qualified capital sources.
• We put nine kill criteria on paper before the next conversation. Eight watch the sponsor and one watches our own exposure. The rule for continuing or stopping was set before any pressure arrived.

Results

• None of the three capital claims the raise rested on held up when checked at the source, and that happened before any outside money moved. Once the check was done, the deal as packaged had no confirmed source of capital at all.
• The senior financing request was rebuilt at $1.8 million, set against an appraisal of $3.74 million. That is a loan to value of 48 percent.
• After that the sponsor asked Common Ground into every part of the project. That means marketing, financials and analysis, the upfront real estate work, branding, and the raise itself.
• Nothing has closed. Our arrangement is verbal and non-exclusive. One check is still outstanding, the review of the appraisal and the wells' yield.

The lesson

Verify every claim a raise rests on before an outside dollar moves, and counter instead of walking when the package contradicts itself.

Stories from this work

Questions about Silver Mountain Ranches, answered

Firm record

Common Ground keeps its own account of this engagement: Silver Mountain Ranches on the Common Ground wiki.

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