What is rate of return on EB-5 with regional centers? Especially when one is securing a loan, ROI factor comes in pictures as one has to repay the loans too. I have heard a lot about various scams in regional centers, and people losing money.
The return on investment differs from project to project. Certain regional centers offer low percentages, but stellar immigration success, while others offer higher return and weak immigration success. Please consult an experienced immigration attorney to assist you.
ROI''s vary from project to project. Please keep in mind that this is a investment and carries all the risks of any investment out there.
Scams certainly would result in losing money, but money can be lost in legitimate projects as well. There is no standard ROI for EB-5 with regional centers. A wise investor will do all of the due diligence possible before investing in any project (regional center or not, EB-5 or not). This is a real world investment and there are no guarantees. The goal is to minimize financial and immigration risk. It is not possible to eliminate all risk however.
You should not focus on the Rate of Return on investment for the EB-5 investment. The key is whether the regional center is doing a project that will create the requisite number of jobs for your immigration benefit - green card. Most of good regional centers with high approval track record is only giving about 1-2% return like most of the banks these days. Be wary of regional centers promising high returns.
ROIs are typically really low. The investor is principally interested in a green card and then in getting his/her money back at the end of the loan term (note, the funds must always be at a risk of loss ? there can never be a guaranteed redemption). I have seen ROIs range from as low as 0.25% to as high (well, if you call it high) as 1.5%.
There is no required rate of return for EB-5 investments. The rate of return is generally offered by the party issuing the securities, and potential investors decide whether or not to accept it by deciding whether or not to invest. We frequently see stated rates of return of 1 to 2%, but there are deals that state higher rates of return or that offer a rate of return that depends on how well the underlying investment performs. Simply knowing the stated rate of return is not enough. Investors need to understand the full cash flow picture of the job creating enterprise and, if different, the new commercial enterprise. The cash flow picture includes the priorities of cash flows, which is known in project finance as the "waterfall." Frequently, parties other than the EB-5 investors are entitled to cash flows before money is made available to the EB-5 investors. If funds are not available after paying others with priority, then the EB-5 investors will not receive payment unless and until funds do become available. There are also issues of timing of payments. All of this underscores the need for investors to have due diligence performed on their behalf by persons knowledgeable about both immigration issues and project finance.
Unfortunately some regional centers have had issues, but our law firm has experiences with many that are reputable and established, and we would assist with the immigration aspects of your intended investment. ROI is often 3-5% , but other financial structures are often in place.
