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EB-5: One size funds all?
By Renata Castro
There has never been a better time to buy and profit from the distressed U.S. Real Estate market.
An abundance of inventory at low prices, paired with a demand for rental residential units, has left real estate speculators salivating at the opportunity to profit from the demise of the industry.
But the hurdle is no longer to find the right property, but to find the necessary funding.
As traditional lenders tighten their already restrictive lending guidelines, Real Estate developers have been actively seeking relief in the form of EB-5 funded projects. Word on the street is that EB-5 funds are the next best thing to subprime. Not quite.
EB-5 is a pilot program implemented by US government to increase job creation through the injection of foreign funds. In exchange, investors are put on a pathway to US citizenship through US residency anchored by the investment.
A minimum of 10 jobs has to be created by the investment during the investment period, and both the funds and the investor’s residency are at risk for a period of time.
Investors, coming from markets such as China, Russia, Brazil, India and Mexico, to cite a few, tend to favor projects with a real estate element as a way to mitigate the risk.
Here’s the caveat – the purchase of residential real estate in itself does not qualify as an investment that’s EB-5 worthy. Moreover, even if the funds are used to develop large scale residential real estate projects, it becomes evident to the project owner that the number of full-time jobs that must be created in order to satisfy USCIS’ requirements so that all investors can successfully submit and receive approval on their I-526 petitions becomes cost-prohibitive to very livelihood of the project.
Not all is lost. Working with professionals from the beginning stages of a project increases the chances of success when it comes to maximizing the potential of this powerful funding alternative.
Exclusive Visas provides turnkey services to projects looking to capture funds in the EB-5 marketplace. From the Econometrics studies to the development of the business plan, Joe Sloboda and Fred Burgess, alongside a team of experienced professionals, leverage from their experience and successful track record of funded projects across the country to structure offerings seeking EB-5 funds to expand or to start operations.
I’m interested in funding for our 45 yr old family business . With Assets of $2.5 million , we are looking for one million to expand . We have little to no debt . We will offer investors a 40% stake in company , which will be worth as much as Double in 5 – 7 yrs with little to no risk . The business involves buiding condos in a country setting , renting them out until such time we decide to sell them one at a time .