What are the advantages and disadvantages of investing in a late-stage EB-5 project?

Question

I have been offered a late-stage mixed-use construction project that will be completed likely in 6 months, likely a debt model to replace bridge loans. The project apparently already has approved i-526&#x27;&#x27;s.  Even if I apply now, it may take 18-22 months for USCIS to approve my i-526, by which time the project will have already been constructed for 1-2 years.  Assuming the job formula is correct and all the jobs have been created, what are the dangers in investing in this type of very late-stage project?  Early-stage projects run the risk of not getting off the ground, but late-stage projects may already be close to completion. What are the relative advantages and disadvantages?

Ed Beshara · Answer

Investing in a late project may have advantages. I-526s may have already been approved which means the EB-5 project documentation has already been approved. Therefore, in your I-526 petition the USCIS should only adjudicate your source of fund documentation. Your EB-5 investment funds may be used to pay off the more expensive construction loans. On this basis, you will obtain credit for the previously created jobs by the construction expenditures.

Fredrick W Voigtmann · Answer

Late-stage projects are a problem only if (1) the EB-5 capital is invested too late, i.e., the jobs already have been created or the bridge loan documents were not properly drafted, i.e., there is no "nexus" or connection between the investment of the late EB-5 capital and the job creation OR (2) if the job allocation is based on a first-in, first-out or first to file I-829 petitions and the project is short on the job creation amounts, for whatever reason.  If neither one of these is a problem, then late-stage projects are very effective vehicles for quicker EB-5 approvals (I-526 and I-829 processing).

Julia Roussinova · Answer

This is a complex question that requires due diligence of this particular project as any other EB-5 regional center project before you consider investing in it.  You should consult a licensed investment broker and an EB-5 immigration attorney to determine if this is a viable project with sufficient cushion for the requisite job creation per investor.

A Olusanjo Omoniyi · Answer

The more important question is, whether the project can meet the basic requirements of EB-5  which will allow you to obtain a green card.  If the answer is yes, then there is no need to engage in assumptions of this nature. Advisedly, consult an EB-5 attorney to review the project offerings of the regional center, documents and records on the project. In essence, do a due diligence analysis. If your findings are positive, consider joining the project.

BoBi Ahn · Answer

You should thoroughly vet the project (the history or the developer and immigration processing track record, etc) as always.  As long as the project can deliver on the job creation and meet the required guidelines for EB-5 processing, investing in a late-stage project should not be a problem.

Daniel A Zeft · Answer

An advantage of investing in a late stage EB-5 project is you can see that the construction of the new building is proceeding.  A disadvantage of investing in a late stage EB-5 project is the number of jobs created could be less than the number needed to allocate 10 jobs to each EB-5 investor.  However, if all of the anticipated jobs are created, then I do not see a disadvantage.

Charles Foster · Answer

The advantage of investing in a late stage EB-5 project is precisely that they already have approved I-526 petitions, thus giving you a much higher degree of certainty that your EB-5 petition based upon the same project will be approved.  As you indicated, the downside of investing in a late stage project is that the project may be completed prior to the date that you would be required to file your Petition to Remove Conditions on Form I-829; thus, the possibility that the project developer will have to redeploy and keep your funds invested until such time as you have completed and filed your I-829 petition.  Generally speaking, it would be better to file with a project that already has one or more approvals than being among the early investors.

Yazen Abdin · Answer

One of the disadvantages with late-stage projects is the jobs may have already been allocated to prior investors before you.  In other words, if the project miscalculates how many jobs it will create, then you may end up not meeting the 10 employee requirement.

Tomas Resendez · Answer

This question would better be answered by the regional center that is in charge of that project.  Having said that, assuming the formula is correct and all the jobs are created, you should have the same advantages and disadvantages as someone who invested in the project in its early stages.  Verify that there is still room for you in the number of jobs created per investor, but other than that evaluate the eb5 project the same way you would evaluate any other EB-5 project.  You should always consult with your immigration lawyer before investing in any EB-5 project.

Vaughan de Kirby · Answer

This question cannot be answered unless extensive due diligence is available on the project in question. This due diligence should be from a third party who is not connected with the project or the Regional Center. Do not proceed with your investment unless you have retained a broker-dealer and qualified EB-5 investment immigration attorney.

Lynne Feldman · Answer

I do not see a danger provided you are satisfied the jobs will be created.

Free Evaluation

What are the advantages and disadvantages of investing in a late-stage EB-5 project?

Answers

Ed Beshara

Fredrick W Voigtmann

Julia Roussinova

A Olusanjo Omoniyi

BoBi Ahn

Daniel A Zeft

Charles Foster

Yazen Abdin

Tomas Resendez

Vaughan de Kirby

Lynne Feldman