An EB-5 regional center is offering us two choices: preferred equity with higher returns or debt money (a loan to the regional center) at a very low interest rate. It says that a loan is paid back before preferred stock. My understating is that debt money has a very low interest rate but a higher chance of getting the principal back. Is there any other difference that I should pay attention to? Which option would you recommend and why?
Answers
Lynne Feldman
Immigration AttorneysWe cannot give investment advice. You may want to retain someone separately to advise on that.
Belma Demirovic Chinchoy
Immigration AttorneysYour goal should be to 1) get permanent residence; 2) get your principal back within a reasonable amount of time; and 3) receive some ROI to cover a part of your costs associated with EB-5. You need to read the contracts closely and make sure you understand the implications of both options before deciding.
Bernard P Wolfsdorf
Immigration AttorneysYou need to have an expert investment advisor and look at each project carefully. There is no one formula that works as there are so many factors to evaluate. Generally, the better projects do not offer good returns but look at the specific project and evaluate viability using commonly accepted investment analysis criteria. Do due diligence and then do due diligence on your due diligence advisor.
Dennis Tristani
Immigration AttorneysThe timing of repayment, interest rate, and financial risk are all issues to consider when considering a specific EB-5 project. This is a question you should discuss with your financial and/or legal advisors.
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