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How can I structure my EB-5 deal to be marketable?

Hello attorneys, I am a developer looking to put together my capital stack for a known Flag Hotel deal back east. I have a bridge loan and construction financing set up already. However, I want to use the EB-5 portion to pay off the bridge and a small portion of the construction loan. At the end of the day, the capital stack will look like 20 percent developer equity, 60 percent senior loan and 20 percent EB-5 (as a preferred equity piece). Does this deal sound marketable to you in terms of agents picking up my deal? More specifically, is 20 percent developer equity “market”? And will "preferred equity” sell?

Answers

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    J Bruce Weinman

    Immigration Attorney
    Answered on

    There is no legal problem with that. But you should sit down with a team of professionals to determine the appropriate strategy for you.

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    Ed Beshara

    Immigration Attorney
    Answered on

    An experienced EB-5 attorney will be able to offer advise on EB-5 compliance and marketability. Your proposal is on track.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    It is interesting how developers such as yourself have utilized this Q&A to find out what others are doing and how the market condition has been. The stacks or equities ratios are not particularly a legal barrier. EB-5 investment can take up any percent of shares. In terms of investors' preference, they obviously want more shares if possible. This may not have anything to do with the marketability. Typically investors are looking for things more than his/her equity ratio.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    You need to retain EB-5 counsel with access to other professionals (business plan writers, securities attorneys, broker-dealers, etc.) to work closely with you to review and set up the proper legal and financial infrastructures that are both approvable and marketable. This is a very involved process that requires an attorney-client relationship to succeed.

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