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What are the standards used to evaluate the quality of regional center projects?

Are there any criteria/standards to evaluate the quality of a regional center project? Some people say investors should select a project in its late stage where there have already been some approved I-526 applications, instead of a brand-new project. Some EB-5 agents only promote projects with approved I-924s. Is there a rule of thumb I can use when selecting regional center projects?

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    Barbara Suri

    Immigration Attorney
    Answered on

    Nothing beats due diligence on your part as you would with any other investment. I believe you should review the following aspects of this project: Job Creation, Capital Structure, Location, Project Readiness, Exit Strategies, Regional Center Qualifications, Developer Qualifications, Regional Center-Developer Relationship, Regional Center Representations and Promises, Regional Center Transparency and the Supporting Professionals.

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    Michael A Harris, Esq

    Immigration Attorney
    Answered on

    In my opinion, having an approved I-924 can be a critical factor. If it has an approved I-924 that specifically names the job-creating project in what is called an exemplar I-526 petition, then that means the USCIS should only need to review your lawful source and path of funds when you file your actual I-526 petition. As long as there has not been a material change to the project financing model or job creation methodology, then the I-924 approval can be very valuable for the processing of your petition. Now, of course, there are many other factors to consider when investing in a project, including developer experience, regional center experience, conservativeness of the job creation model (for example, expenditure-only jobs vs. jobs which may need to depend on revenue or tenant occupancy jobs). The factors are very complex. And I strongly recommend you speak to an experienced lawyer who has a very high level of expertise in EB-5 project structuring.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You are making an investment decision as well as an immigration decision. If getting the green card is the most important factor then the immigration history of approvals of not only the I-526 but also the I-829 are important. If a high rate of return is important, then you need to look at the fine print.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Do not invest in a project that is not able to provide you with third party comprehensive due diligence. You may want to consider contacting a Licensed Broker-Dealer or Registered Investment Advisor to represent you to assure your investment is as safe as reasonably possible.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    There is no one factor. Track records are important for both the regional center and the developer, but you must look at the project. First, check whether there is adequate job creation and whether the project is likely to be built and therefore the jobs created. Second, you want to make sure the money is returned in a loan model so will the business be successful and what is the capital stack. How much debt is there and what is the collateral for the loan?

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    BoBi Ahn

    Immigration Attorney
    Answered on

    There is no rule of thumb, per se, but the investor should do a thorough vetting of the regional center and its project performances as far as their history, success rates, filing track record, experience, etc.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Regional center projects with exemplar approvals and/or previously-approved I-526 petitions generally are given deference by the USCIS. This means USCIS has reviewed and approved the business plan and other project documents so if a new I-526 petition in the same project contains the identical project documents, that portion will be deemed approvable by USCIS (absent fraud or material change). USCIS deference is good for your I-526 petition process, but there is no guarantee as to the financial stability or future performance of the project itself. In other words, your due diligence investigation prior to choosing a regional center project should include BOTH immigration due diligence and a thorough review of the financial projections by an independent third-party financial expert. That way you can reduce, if not eliminate, your immigration and your financial risks.

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    Jon Eric Garde

    Immigration Attorney
    Answered on

    Your stated general rule applies. However, there are consultant analysts who can be hired to assist you to evaluate newer projects. All in all, EB-5 immigration requires hiring professional fees and is, in general, not known to be profitable. For a true investor, L-1 to EB-1 offers a better prospective investment vehicle for many persons and does not have as many legal requirements causing administrative burdens which also create additional risk.

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    Charles Foster

    Immigration Attorney
    Answered on

    There are many criteria or standards to evaluate a regional center project. Certainly, having an approved exemplar or approved I-526 petitions would be significant; that would give the prospective investor a high level of certainty that a subsequent petition would most likely be approved as well. Other criteria would be the experience of the project developer; how long they have been in the business, whether they have had other successful projects and whether they repaid their investors. Another criterion would be whether or not the developer has some significant equity in the property and the position of the EB-5 investors, i.e. are they paid out before the developer is able to receive any profit from the project.

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