Finding EB-5 Visa Investment Opportunities
EB-5 visa investments in real estate projects do not differ much from standard real estate investments in that success is dependent upon choosing the right project. For this reason, approximately 90 percent of EB-5 visa investors decide to go the Regional Center investment route.
EB-5 investment projects are those considered “New Commercial Enterprises” (NCEs) and must lead to the creation of 10, permanent fulltime jobs for U.S. workers within two years in order for the EB-5 visa investor, spouse, and unmarried children under 21 to receive permanent Green Cards.
As of November 21, 2019, the minimum investment in a Targeted Employment Area (TEA) rises from $500,000 to $900,000. TEAs are regions in the U.S. with either high unemployment – an unemployment rate exceeding 150 percent of the national average, as per the Bureau of Labor Statistics – or rural areas, defined as outside of a Metropolitan Statistical Area. New regulations accompanying the investment minimum rise change the determination of TEAs to the U.S. Citizenship and Immigration Services (USCIS), rather than state and local governments as in the past.
With a Regional Center investment, indirect as well as direct jobs may qualify for the 10 new permanent job minimum. Indirect jobs are those jobs held outside of the New Commercial Enterprises but result from the creation of the NCE.
No managerial or business role is required of an EB-5 Regional Center investor, and the investor can live, work, and go to school anywhere in the U.S. during the two-year conditional Green Card period after making the EB-5 investment.
Investors may only place funds in Regional Centers approved by the USCIS. As of October 7, 2019, there are 819 approved Regional Centers in the country. The USCIS publishes a list of approved centers on its website, periodically updating the information.
While USCIS approval is the first step, keep in mind that such approval does not constitute USCIS endorsement of the Regional Center’s activities, nor does it guarantee that the Regional Center complies with U.S. securities laws. The approval also does not minimize investor risk in any way.
The USCIS also publishes a list of Regional Centers terminated from the program. While termination itself can take some time, as there is an appeals process in place, once a Regional Center is terminated, it can no longer participate in any immigrant investment visa program. To date, 386 Regional Center projects have been terminated or are appealing termination.
Choose an Industry
Since Regional Centers focus on various industries, it is often wise for investors to choose those centers involved in industries in which they are familiar. Common industries and businesses often involved in EB-5 projects include:
- Convention centers
- Office buildings
- Mixed use retail
- Sports stadiums
- Entertainment and similar venues
A potential EB-5 investor with a background in restaurants or retail, for example, may want to look into Regional Centers financing such NCEs, as they can use their independent knowledge when determining the merits of the investment.
A Track Record
Look into the developer’s track record when considering EB-5 investment opportunities. If this is the developer’s first EB-5 project, even more research is necessary. Some investors want to tour a developer’s completed projects to get a better idea of the results.
Questions to Ask
When deciding upon an EB-5 investment opportunity, doing proper due diligence is imperative. Ask the following questions and ensure you receive satisfactory answers:
- Are other EB-5 investors already committed to this project?
- At what stage of the application process are the other EB-5 investors?
- What are the project’s risks?
- What are the investment’s projected returns?
- What economic models are used for job creation estimation?
- Is non-EB-5 funding involved in the project?
- If so, where does the non-EB-5 funding originate?
- What are the project principal’s credentials?
- Are building and zoning permits approved?
It is also critical to research the history of the project principals and ascertain whether their businesses ever filed for bankruptcy, as well as any lawsuit involvement. Peruse the project’s feasibility reports and consider whether the numbers involved are reasonable.
Take Your Time
Much depends on choosing the right EB-5 visa investment opportunity. Failing to make the right choice by placing funds in an enterprise that does not create the required jobs in the allotted timeframe places more than your investment at risk. It may jeopardize the ability of you and your family to obtain permanent Green Cards.
Take your time in making an investment choice. For most EB-5 investors, it can take between one and three months in which to conduct due diligence and make this vital decision.
How Lightstone Can Help
At Lightstone, we specialize in helping EB-5 visa investors find the best real estate investment opportunities involving Regional Centers for their needs. As one of the largest, privately-held real estate companies in the country, our firm has raised in excess of $400 million in EB-5 investments to date, creating almost 10,000 jobs nationwide in the process. We now have more than $6 billion in assets under management and development. Our expertise can help guide you in making your EB-5 investment decision. If you would like more information about EB-5 visa investment opportunities, please fill out our contact form.