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Is it possible to borrow from a person who takes out a loan?

Can I borrow the $500,000 from my friend who has an apartment, with a market value of over a million USD? Can he obtain a bank loan, which would be secured by his apartment, and then I would borrow the money from him? He cannot provide any documents to prove a lawful source of funds, which were used for purchase of his apartment since it was 10 years ago. How can I assure that this source of income will be EB-5 eligible?

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    Yes, you may borrow the funds. However, the loan you receive from your friend may not be secured by the project you are investing in. Your friend loaning you the money will also have to show a lawful source of the funds used to purchase the apartment.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Yes, your friend can loan you the money but then would need to do a full source of funds report on where your friend got the money to buy the apartment.

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    Ed Beshara

    Immigration Attorney
    Answered on

    You definitely need to seek the assistance of an experienced EB-5 attorney. You may borrow funds from a friend but you will have to show that you have the financial means to pay back the loan on a regular basis. Your friend who derived the $500,000.00 from a loan by the bank will have to show the lawful source of the funds to purchase the apartment.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    Yes, you may borrow the funds from your friend and trace it back to the bank loan secured by his apartment, and provide documents to show his legal ownership of the apartment, etc.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    To qualify for EB-5, the investor must show by a preponderance of the evidence, i.e., that it is more likely than not, that the invested capital was obtained through lawful means. You certainly can borrow funds to use for your investment, but you must provide evidence of the terms and conditions of the loan, whether there is collateral, interest rate, payments, etc. You must demonstrate your financial ability to repay the loan. The loan may not be secured by assets of the new commercial enterprise. Your friend may have to demonstrate, again by a preponderance of the evidence, that the capital he is loaning (or giving) to you was lawfully obtained. If the explanation is that he secured a bank loan with a mortgage on an apartment he owns, he may need to provide some explanation or documents as to the source of funds to buy the apartment. It depends on how much documentation can reasonably be expected to be available from 10 years ago. Perhaps he can provide a declaration and show that he earned income over a number of years sufficient pay his living expenses and have surplus to purchase the apartment. You should consult directly with an experienced EB-5 immigration attorney to determine the best way to document the lawful source of funds.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Yes you can borrow from your friend for your EB-5 investment. A loan can be treated as a lawful source of funds. However, your additional facts that seem to suggest your friend cannot prove his own wealth is a lawful source may raise some concerns because, unless you can prove your funds come from lawful source your application is not likely to be approved. Engage in a frank discussion with your friend about how he built his wealth and accumulate his business fund(s). Note that urging him to document that his business is legitimate will be to the benefit of both of you. Attempt to document the source of funds with your friend by using professionals such as accountant(s) and attorney(s). Last but not the least emphasize that you are trying to document an investment in apartment business which has been 10 years old. This could help in proving the source of your fund has been in existence for a long time but, it still must be confirmed to be lawful source of funds.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    You will need to address the source of funds. Your attorney should be able to advise you on this. Your loan from your friend must be secured.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    It would be best if he could provide the purchase agreement for his apartment and then new appraisal before the loan to show increased market value.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    You need to authenticate the source of funds no matter the source. A gift must be authenticated to show where the person giving the gift obtained the funds initially. If that source cannot be authenticated, then you may need to find another source.

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    Jason Feldman

    Immigration Attorney
    Answered on

    Yes, you may borrow the money from someone. So long as the loan you have from your friend is not secured by the EB-5 investment itself. If you friend has owned his apartment for 10+ years, and that is the source of the loan, that should suffice to satisfy USCIS concerns about the lawful source. He should provide documentation showing the purchase of the property and his current ownership.

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