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How do I choose a reliable project?

I’m currently interested in EB-5 investments at a regional center, but there are more than 200 projects running at the moment. How should I choose one so I know that the project is reliable and that I won’t lose my investment?

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    Please consult a financial expert to advice you on financial issues. From an immigration stand point, the foreign investor should conduct due diligence on the regional center. The regional center''s immigration history is important. Please note that no guarantee can be given on your investment, as the investment is required to be at risk. Consulting an immigration attorney and a financial expert will minimize the risk of losing your investment.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    There is no formula per se. You need to carefully review the Offering and look at the RC history and their successes. It would probably be best that you hire a professional to review the documents and advise you on the projects.

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    John Roth

    Immigration Attorney
    Answered on

    First, You should not be taking advice about financial issues from anyone who is merely an immigration attorney. Most immigration attorneys are neither competent nor licensed to provide financial advice. Only someone with training and experience in financial analysis can provide reliable advise in these areas. Since I have such a license, I will mention a few things you should be looking for: An "equity buffer." You want to be in a project where the developer or other non-EB 5 investors have made an equity investment and the EB-5 investors having priority regarding return of capital in the stack of investors. This way, if the project underperforms, there will be money left in the project to pay back the EB-5 investors. A "jobs buffer." This means that if the project runs into trouble and doesn''t fulfill all the economist''s milestones, there will still be enough jobs for all investors because there were extra jobs in the original economist''s projection. Management experience with similar projects. The fact that any given regional center has successful petitions in the past can mean absolutely nothing if the center or management company has taken on a new project where they lack the background and skills to pull off the deal. I''ve seen several flops launched by so-called "top regional centers" that were caused by the managers failing to understand their limitations. Don''t ever forget that past success is never a guarantee of future results! Recent project-based government requests for additional evidence (RFE). Ask to see all such RFEs for the last 2 years. It will give you a good insight into how well the project is managing the legal issues on the due diligence side. These are just a few things you should be looking at. A full due diligence analysis should take an advisor two to three weeks and should result in a written opinion.

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    Kripa Upadhyay

    Immigration Attorney
    Answered on

    There are a number of regional centers in the U.S, and new ones appear constantly. It is important for you to work with a regional center that has a good record of being able to remove the temporary conditions of stay for their investors. Regional centers will often advertise their success rates with I-526 petitions that they have secured, but you need to ensure that these temporary conditions were eventually removed. You can choose to work with an Immigration Attorney with experience in EB-5 matters, and one who has worked with regional centers and knows from prior experience, which ones are likely to be a "safer" bet than others. No attorney can guarantee ultimate success, but at minimum, they can guide you on the likelihood of success and safety with one regional center over another. Good luck!

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    Rohit Kapuria

    Immigration Attorney
    Answered on

    I am unaware of a regional center that has 200 ongoing projects. Regardless, determining which project to invest your funds in, is a fair concern. The first thing to realize is that like any other financial investment, your funds are always at a risk of loss. If your funds have a guaranteed return at the end of the loan term (usually 5 years), then your funds are not truly at risk and therefore violative of current EB-5 regulations. Prior to making any investment, per the customary game theory guidelines accepted in the financial world, you should first determine your risk tolerance - are you: a) risk averse; b) risk neutral; or c) risk loving? Based on this answer, and following an in-depth due diligence review of the project documents, the relevant entities associated with the project (e.g. experience in such projects, past EB-5 exposure, history of their success with past projects, percentage of developer equity in the project, etc.) you would then be able to decide on the appropriate project. My advice though, engage the services of an EB-5 immigration attorney who can advise you on the immigration side and an appropriate financial advisor who can best dissect the project''s financial feasibility.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    As US Immigration attorneys, we could assist you with the Immigration history of regional centers and the US Immigration processes. In terms of the business decision that must be made, that is generally left up to the investor with the assistance of a corporate attorney or financial advisor. We do recommend retaining qualified EB5 counsel, like the attorneys at our law firm, at this stage, as we can coordinate with the Regional Center, Project principals, and any other professionals necessary to assist you with your EB5 process.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    I wrote about this very issue for the EB5investors magazine that is to be published this month. The following are short due diligence items to consider and inquire: 1. Had the RC successfully completed any EB-5 projects in the past. 2. How many I-526 approvals and denials they have received. Since each project of a Regional Center will be reviewed separately for approval, a record of a substantial number of approvals and no denials is optimal. It is worth noting that while there are over 250 designated Regional Centers, only a small number of them have been in business long enough to have completed successful EB-5 projects repeatedly and up to I-829 approvals. 3. What percentage of a project''s total capital is EB-5 money? A project that relies too heavily on EB-5 capital carries a risk of never getting off the ground definitely stay away from projects financed solely by EB-5 investments. 4. In addition, you should ask does the general partner of the Regional Center have credible experience working with immigrant investor programs? 5. What is the exit strategy after getting your I-829 approved?

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Due diligence is key. There are a number of very good due diligence companies that will do the leg-work for you and advise you on financial risks. Make sure you are dealing with an experienced and licensed financial analyst for these services. You can find many of these service providers on eb5investors.com. An immigration attorney should not be giving you any financial advice; beware if one does.

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    Ying Lu

    Immigration Attorney
    Answered on

    This is a hard question. The fact is that no EB-5 project can guarantee the return of the investment and the success of the immigration petitions. Please be advised that all EB-5 capitals must be placed "at risk". Though there are companies on the market claiming that they can provide due diligence service to you, the investor himself/herself should still do their own homework. There is a lot of information available on the internet. You may find many details about a specific project that you were not aware of by doing a simple research online. Experienced EB-5 attorneys may give you many valuable insights about the EB-5 projects and regional centers. However, immigration attorneys are not investment advisors. Most likely, they will suggest you seek independent financial advice from financial advisors who do not have conflict of interest issue with the regional centers/projects.

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    Karen Weinstock

    Immigration Attorney
    Answered on

    You should consult with a financial expert who is familiar with some of these projects to evaluate your risk tolerance and project viability. This is not a service that your lawyer should provide.

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    Marc Yelnick

    Immigration Attorney
    Answered on

    I have found the best way is to Google the sponsors. Several are affiliated with large organizations and/or have household-name clients or other business associates.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    There is always business risk but the selection is much like any other investment. You want a track record and a conservative approach in a project that ideal offers security (ie:note/mortgage) in return to support the investment. I will be happy to discuss in detail.

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    Ed Beshara

    Immigration Attorney
    Answered on

    First you must choose an experienced EB-5 attorney who is familiar with the successful immigration history of the Regional Center projects, the experience and successful history of the developers and operators of the projects, and the history of the exit strategies when funds have been timely returned. Second, the EB-5 attorney must have expertise and experience with the preparation and efficient filing if the petition including the authentication of the investors source of funds.

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    Michael A Harris

    Immigration Attorney
    Answered on

    There are handful of regional centers that have been operating the longest. Among these, you will find that they have been able to obtain approvals of not just the investor''s I-526 but also succeeded in removing the conditions on their residence. From an immigration point of view, this is the most important criteria to consider, albeit not the only one. From a personal, business decision perspective, you should evaluate who the operators of the regional center, project, project affiliates, escrow bank providers, and more. To help you choose, in addition to the immigration issues, you can also have a business adviser guide you through the due diligence process of investigating the potential EB-5 project.

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