I was wondering how I could use the equity I have built up in my rental investment properties (more than $3 million) over the years (no direct employees, only part time contractors however) to qualify as an EB-5 investment? This is not a TEA or regional center but in a popular metro area.
Investment alone will not lead to an EB-5 green card, you have to create at least 10 jobs and the best way to do this is to affiliate with a regional center and show how your investment has created indirect jobs.
The investment amount can count but you will need to show the creation of 10 new jobs (W-2''s not 1099''s).
Retained earnings do not count for EB-5 investment purposes. If you were to take a profit and pay tax on the income, you could reinvest those funds into your company or into a an EB-5 regional center project. You should check with a tax expert of course to determine your tax liability for such a transaction. If you reinvest the required amount of funds in your own company (direct EB-5) that is not located in a TEA, the minimum investment amount is $1.8 million. A common misconception is that only regional centers qualify for the lower TEA threshold of $900,000, but direct EB-5s can use the TEA amount as well if they are located in a high unemployment area or rural area.
Unless you layer over another component that would have jobs (such as a property management company that attends to all the properties) or you want to use your equity to take out a loan to build a new property (the more likely scenario), it would be challenging to use this for EB-5.
Built up equity does not qualify for EB-5; there needs be an actual investment of capital that meets the investment guidelines.
You can use your investments to apply for EB-5. But have you hired 10 more employees since you bought the properties and can you keep the 10 employed for the next few years? If not in a rural or high unemployment area, you will need to show a $1,800,000 investment. You might be better off borrowing $900,000 from a bank, putting up the property as collateral, and investing it in a safe investment regional center.
It does look like you cannot create 10 job opportunities under your current real-estate holdings. What you may be able to do is to get a loan in the amount of $1,800,000 secured by your real estate to establish a new business that meets the requirements of the Eb-5 visa. Good luck!
It may be best to use that equity to obtain a loan so you can invest in an EB-5-ready project. Even managing the rentals yourself, you would have to rely on indirect job creation and get hooked up with a Regional Center.
