Successfully obtaining Green Cards for your family through EB-5 investment rests on selecting the right EB-5 project. In addition to qualifying for Green Cards, your other primary goal should be to get your investment returned in full.

Finding the right project to fulfill these needs requires an investor to dedicate time to conducting thorough due diligence.

These 9 tips can assist with EB-5 project selection due diligence.

1. Team Reputation

Evaluate the reputations of the project and Regional Center’s team. Does the project developer have years of experience in completing similar projects to the one you’re interested in investing in? Does the Regional Center have managerial experience with these types of projects? Were the projects completed on time and on budget? An experienced team will be able to more easily overcome the challenges that often arise with large-scale real estate developments.

2. TEA Status

A targeted employment area of TEA is a rural area or place of high unemployment. EB-5 projects located in TEAs qualify for a reduced investment amount of $500,000 from $1 million. In order to prove that a project is located in a TEA, a Regional Center will need to submit data and approval letters.

3. Job Creation Methodology

How does the Regional Center count job creation? Are they effectively utilizing direct, indirect and induced job creation? Does the project have a job creation buffer so that there’s no question that each EB-5 investor will be credited with the 10 requisite jobs to qualify for their I-829 petition?

4. USCIS Approval

Does the EB-5 Regional Renter project have USCIS pre-approval? Is the Regional Center designated by USCIS?

5. Capital Structure

Where do the different sources of funding come from? Does the project have a senior loan? Do they utilize bridge loans? What percentage of the funding comes from EB-5 capital? Does it exceed the recommended 30%? Determine how much comes from project developer capital and construction loans.

6. At-Risk Investment

An EB-5 investor’s capital must remain at-risk. There can be no guarantees that an investor will get a refund on their investment. If a project developer promises that their money will be returned, USCIS may deny the EB-5 investor’s petitions.

7. ExitStrategy

Although a project must be at-risk and there cannot be any guaranteed returns on their investment, an investor must still scrutinize the project’s exit strategy. Under certain events or circumstances an EB-5 investor’s capital may be returned. It’s important to go over the exit clauses in the offering memorandum with an experienced attorney.

8. Economic Impact

When investing in an EB-5 project located in a TEA it’s important to look at the economic impact the project will have on the surrounding areas. What is the local economy like? Is there demand for the proposed project?

9. Timeline

The EB-5 Program puts EB-5 investors on a strict time schedule. Understanding the financial structure of the project will help EB-5 investors understand when and how their capital will be utilized.

Schedule a meet to learn more from our Experts

Download EB-5 Brochure