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What guarantees can a regional center give EB-5 investors?

I know purchasing property does not count under EB-5 rules, but I came across a link that said that a company is sourcing funds from EB-5 investors for constructing some sort of an apartment, and the investors would secure a house in return for their investment. Is it possible to invest in a construction project which will in turn guarantee me a house?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    EB-5 investment must be at risk and return of funds may not be guaranteed like in any other business venture. Guaranteed repayment of funds will lead to a denial of the case. It is strongly recommended to hire an EB-5 immigration attorney who will help you with due diligence of a regional center project and can recommend other professionals in your case, such as an investment adviser.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Generally, EB-5 investment is an at risk venture; an investor may lose his/her funds. Thus, a regional center is not supposed to guarantee any investment. Caveat emptor (buyer beware) if someone is guaranteeing your EB-5 investment, be very careful before you invest in such a venture because such a promise may just be too good to be true. Consult an EB-5 attorney before you either rely or proceed on the type of information in your question.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    I am not aware of how this could work.

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    John J Downey

    Immigration Attorney
    Answered on

    There can be no guarantees. The investment must be "at risk." What they are probably referring to is an exit strategy. The business plan may mention a return on investment. It could be a return of capital after five years, or in this case, it could be an offer of a condominium/house that is part of the project.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    If the money is guaranteed, the case will be denied. Be careful.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Any type of guarantee that reduces the full amount of capital at risk ($500,000 or $1 million) is prohibited under the EB-5 requirements. Therefore, if an investor invests $500,000 and receives a $200,000 apartment as some sort of security, he or she will be considered to have invested only $300,000 and therefore, not qualify for EB-5 classification.

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    Debbie Klis

    Securities Attorney
    Answered on

    Real estate projects work quite well for the EB-5 program; in fact the substantial majority of EB-5 projects involve real estate construction, renovations, expansions and so forth. The developer and/or regional center can guarantee a refund in the case of an I-526 petition denial; there can be completion guarantees and environmental guarantees. Neither the developer nor the regional center can guarantee a return of your investment or a return on your investment. Thus, regarding your question, a guaranty of a home at the end of the program would violate the at risk requirement; risk is required to demonstrate that that applicant made an investment.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Anything promised to an investor can be counted against their investment. An apartment in an EB-5 development has some kind of value, and that value will be subtracted from the investment amount. The practice of guaranteeing a unit in a residential EB-5 project was stopped by USCIS policy many years ago, but many projects continue to offer investors condos, apartments, etc.

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    Raymond Lahoud

    Immigration Attorney
    Answered on

    There are really no guarantees in any investment. The EB-5 program (through the regional center) is a manner of investing funds, securing a return on that investment and, within due time, having an exit strategy. It is through this process that you secure lawful permanent residence. It is possible that the "end" return here would be the interest in that property that they are building. It is important that you retain counsel to complete due diligence on any project. You should not go at it alone.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Virtually none beyond the fact that they are authorized by USCIS to attract investors to their projects. No financial guarantees can be made - the investment funds must be at risk.

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    Stephen Berman

    Immigration Attorney
    Answered on

    It is hard to see how your funds could be "at risk" if you are guaranteed any return.

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    Ally Bolour

    Immigration Attorney
    Answered on

    No guarantees - and real property as an investment is not a good idea?

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