Choosing the safest EB5 Regional Center Project in 2024
For the overwhelming majority of prospective EB5 applicants, capital preservation is their number one priority (outside of visa approval).
Under EB5 regulations, your capital must be “at risk” in order to qualify for an EB5 Visa. Nonetheless, by choosing the right Regional Center project in consultation with a qualified and knowledgeable investment advisor, the capital risks associated with the EB5 Visa program can be effectively mitigated.
While the below information does not constitute investment advice, and should not be relied upon in relation to purchasing any securities, it does highlight some of the most common considerations when it comes to choosing the right EB5 Regional Center (RC) project.
We also include details regarding the robust, 4-Level Capital Protection model employed by our preferred Regional Center partners below.
Let’s get into the details…
EB5 DUE DILIGENCE
A High-Level Framework For EB5 Regional Center Project Due Diligence
| CHECKLIST: KEY REGIONAL CENTER ASSESSMENT CONSIDERATIONS | |
|---|---|
| 1. | Is the Regional Center designated and fully compliant with all legal and program related requirements? |
| 2. | How long has the Regional Center been designated for? |
| 3. | How many EB5 development projects has the Regional Center successfully delivered? |
| 4. | Does the Regional Center enjoy an excellent industry reputation? |
| 5. | Is the Regional Center involved in any litigation with any previous or current EB5 Visa clients? If so, what is the nature of the dispute? |
| 6. | How many conditional green cards (I-526) have been obtained by the Regional Center’s previous and current EB5 Visa clients, and how many Petitions to Remove Conditions on Permanent Residence have been filed successfully (I-829)? |
| CHECKLIST: KEY REGIONAL CENTER MANAGEMENT TEAM ASSESSMENT CONSIDERATIONS | |
|---|---|
| 1. | How long has the developer been involved in real estate development under the EB5 Visa Program? |
| 2. | Can they provide a detailed history of their past, successful EB5 projects? |
| 3. | What types of real estate projects are they specialized in (residential, commercial, mixed-use, etc.), and does the EB5 project being considered fall within their area(s) of expertise? |
| 4. | Has the members of the Regional Center management team, collectively or individually, received any bad publicity? |
| 5. | Has the members of the Regional Center management team, collectively or individually, had any legal problems, or committed any regulatory violations under the EB5 Program? |
| 6. | How long has the current Regional Center management team been working together, and how many projects have the successfully delivered together? |
| 7. | Does the Regional Center developer have adequate succession planning in place for their management team? |
| CHECKLIST: KEY INDIVIDUAL REGIONAL CENTER PROJECT ASSESSMENT CONSIDERATIONS * | |
|---|---|
| 1. | Has the RC developer conducted a market demand and feasibility analysis, and what were their findings? Is there an urgent, ongoing demand for the product being developed? |
| 2. | How will jobs be created to meet the EB5 Program’s requirements, and what risk mitigation measures or redundancy measures are in place to ensure these targets are met? And what methodology is being used to calculate the job creation impact? |
| 3. | What does the project’s capital stack and investment structure look like? And how much is being raised through EB-5 investments, loans, and equity, respectively? |
| 4. | Are all the material regulatory and licensing boxes ticked for this development – e.g. land usage and rezoning (if required), environmental impact assessments, permits, operating licenses, etc.? Also verify the project’s compliance with local regulations – especially if the developer has not developed anything in this specific location previously. |
| 5. | What are the expected project timelines, and has the project broken ground yet? |
| 6. | What are the project’s financial projections? The project’s financial projections, including revenue, expenses, cash flow, and expected returns over the lifetime of the project must be assessed. |
| 7. | What are the major project risk factors? Understand all the potential risks associated with the EB5 project under review, including market risks, regulatory obstacles, construction risks, etc.? |
| 8. | How and when will the EB5 project funds be deployed? Again look at the allocation of funds from EB5 investments, loans, and other sources, and understand how these funds will be used for the various project expenses – and when. |
| 9. | Does a detailed project management plan exist, how is it operationalized, and does the project plan reflect all of the assumptions, financials and projections being made by the developer? |
| 10. | Who are the key players managing the project financially and operationally? Understand who is overseeing the usage of your capital as part of your assessment of the team behind the Regional Center development project. |
| 11. | What exit strategy is in place? Understand how and when you can potentially exit your investment, including details on how returns will be distributed and any anticipated challenges. |
| * | CAVEAT EMPTOR: Remember that these questions serve as general information on the topic of EB5 project due diligence, and do not constitute either investment advice or a solicitation to purchase any securities, either EB5 related or otherwise.
Depending on the specific project and your investment goals, you might need to delve deeper into certain aspects of an EB5 project. Be sure to seek advice from reputable, qualified legal and financial professionals who specialize in EB5 investments to ensure you cover all relevant areas and make an informed decision. |
What Does Effective Capital Protection Look Like?
Our preferred Regional Center partners offer a robust capital protection approach featuring multiple layers of risk reduction, with redundancy built in…
The proven approach that’s currently protecting over $400 million in capital for 500+ of our clients.
LEVEL 1:
Development Project Focus
Our preferred Regional Center development partners only develop projects that are in high-demand – no flashy vanity projects, ever.
Their portfolio of completed projects include several dozen targeted commercial properties, retirement villages, as well as low cost housing and social-impact oriented developments in areas where the need – and hence rental demand – is the greatest.
LEVEL 2:
All Projects Fully Funded
100% of all EB5 projects’ funding is secured from Day 1, regardless of whether any EB5 funding is raised or not.
This means that no matter how many EB5 investors join one of our preferred partners’ development projects, it will still be constructed, developed and launched. They are not reliant on even a single EB5 investor in order to construct a facility. This is one of the key factors differentiating these projects in the industry.
LEVEL 3:
Multi-Source Guaranteed Refinancing
The primary repayment strategy is backed by four different government sponsored entities via a program called Section 232 financing.
Once an eligible EB5 project site reaches 80% occupancy (the average occupancy rate in North Carolina, where these projects are located, is 92%), the project automatically qualifies for refinancing through any one of the four different government sponsored entities.
According to the rules of the program, they are statutorily required to refinance this value as an incentive reward for building projects in areas experiencing extreme social need.
LEVEL 4:
Max EB5 Capital Stake Per Deal: 50%
The MAXIMUM amount of project equity replaced with EB5 capital is 50% (and frequently far less).
Moreover, ALL EB5 investors must be repaid before our preferred Regional Center partners can access ANY of their invested equity or profit from the deal.
This creates a mutual alignment of interests and highly incentivizes the company to repay and remove any EB5 investors from the project as soon as possible.
This is not the case for many other EB5 projects.
About our preferred EB5 Regional Center Project Partners
Market-Leading
EB5 Developers
Founded in 1996, our preferred Regional Center partners are both EB5 market pioneers and leaders with an impeccable track record.
EB5 Project Funding 100% Secured
All our preferred EB5 partner projects are fully funded from day one – regardless of whether any EB5 funding is raised or not.
100% Client
Success Rate
Over the past decade, more than 950 foreign families have successfully obtained their green cards via our preferred EB5 partners.
An End-To-End
Service Offering
Our full-service approach covers every aspect of the application journey, from selecting the right Regional Center and Project, to engaging with expert US tax and legal advisors.
EB5 Investors
Are Repaid First
EB5 Visa recipients must be repaid before our organization can access any of its equity or profit. This creates a mutual alignment of interests and offers unrivalled peace of mind.
Best-In-Class
Supply Chain
At Fast EB5, we only work with the finest suppliers in the business. Our preferred US EB5 lawyers, developers and tax advisors are all seasoned industry experts with sterling reputations.
Clearly Defined
Exit Strategy
The primary repayment strategy is backed by four different government sponsored entities via a program called Section 232 Financing.
Once one of our EB5 project sites reach 80% occupancy – the average occupancy rate in the state of North Carolina, where the project is located, is 92% – it automatically qualifies for refinancing through any one of these four entities.
Proven Track Record
Of Returned Capital
EB5 investments must be maintained for 5-7 years before capital is returned. So if a Regional Center has been operating for less than 5-7 years, it is unlikely they would have any track record of returning EB5 applicants’ capital.
In contrast, our Regional Center partners have been designated for 10 years, and returned hundreds of EB5 investors’ capital to date.
Regional Center
Designated for 10 Years
Our Regional Center partners’ designation spans a full decade, adding extensive depth to their program and development expertise.
The vast majority of competing Regional Centers, and especially the ones promoted in the Middle East, have only been in existence for a couple years at most. They therefore do not have a track record of successfully returning investors’ funds.
The Fast EB5
Visa Experts
Our Senior EB5 Advisory Partner, Sandra Woest, and her team are internationally renowned thought leaders on the EB5 Visa Program.
Representation On
Three Continents
With representatives based in Europe, Africa and the USA, Fast EB5 serves a truly global audience of immigrant investors.
A Winning Approach
To Client Vetting
Since 2013, we have not had a single rejection for pre-vetted clients, thanks to our rigorous client assessment and case file compilation approach.
