What to Ask When Evaluating an EB-5 Regional Center (And Why It’s Important)

There are many EB-5 investment projects in the market today — and every one of them has risk. For the majority of EB-5 investors, the main goal is to obtain Lawful Permanent Residency (Green Card) and maintain a secure return of their funds at the end of their EB-5 obligations. Each investor should understand both the immigration and financial risks associated with any investment so that they can make an intelligent decision to protect themselves and ultimately realize their immigration dream.

 

This is why it’s important, especially in the everchanging times of the Coronavirus pandemic, to select the right regional center (“RC”). Below is a selective (but not extensive) list of recommend questions to ask a regional center before making an EB-5 investment. For more information about EB-5 regional centers, you can read our blog post, Regional Centers and The Value of Experience

 

Has USCIS designated (approved) the regional center?

According to USCIS, an EB-5 regional center is an economic unit, public or private, in the United States that is involved with promoting economic growth. Regional centers are designated by USCIS for participation in the Immigrant Investor Program. You can check if a regional center is designated by visiting the USCIS website here.

 

What is the regional center’s track record and reputation?

Focus on the I-526 (and if applicable, the I-829) success rate. While past success is no guarantee of future success, the regional center’s track record is of some importance.

 

How long has the regional center been operational and how many projects has it sponsored?

It is important to consider how active the RC has been. For example, if it was approved in 2009 but has not worked on any projects since then, the investor will want to determine whether the RC has maintained its filing obligations with USCIS and whether the ownership structure has remained the same. In 2012, for example, we became the proud majority owner of the Florida Equity and Growth Fund Regional Center, LLC (“FEGFRC”), and since then, with our partners, have helped scores of foreign investors successfully navigate complex immigration challenges. As one of the more active EB-5 regional center operators in the southeast United States, we have the experience to safely manage the EB-5 investment and help investors obtain green cards.

 

What are the credentials of the regional center’s principals? Who is the project developer and what experience with EB-5 do they have?

Consider the reputation and experience of the project developer’s outside counsel and consultants. Critical to this point will be the experience of the immigration counsel, securities counsel, and economist involved in the deal. Also consider the experience of the project developer, as mentioned above.

 

How many I-526 and I-829 petition have been filed, how many have been approved, and how many have been denied?

 

Is the regional center transparent about statistics, finances, and records?

 

What is the regional center’s job creation methodology?

EB-5 rules require that the job creation occur within 2.5 years following approval of the I-526 petition. For example, if the project proceeds with some form of bridge financing, the deal structure is critical to determining the job creation timeframe.

 

Does the regional center have a job creation buffer?

Remember, for each investor, at least 10 jobs must be created. The greater the job creation number over and above this amount, the more assurances the investor will have that the job creation requirement will be met.

 

What percentage of the total capital stack is comprised of EB-5 money? Where has the non-EB-5 funding originated from?

Investors tend to prefer projects where the project developer is making a sizable contribution in the form of equity and/or additional financing. Therefore, if the capital stack only consists of EB-5 capital, investors may be weary of the deal.

 

What is the exit strategy? What is the return on investment?

This is definitely a critical issue. Most importantly, the investor should realize that there can never be a guaranteed return of investment. If such a guarantee exists in the project documents, this is a red flag because the investor’s contribution must remain “at risk” until his or her I-829 is approved. There can be a proposed exit strategy in the event that the project is successful, e.g. it is sold to a third party or refinanced by other equity.

 

If the I-526 is denied, when and how will the funds be returned to the investor?

Will the administrative fee (typically an additional $45,000-$50,000 on top of the investment amount) be fully returned?

 

EB-5 is a complex, specialized industry, and a balance of experience with the program and the type of project is ideal. It is important to find a good attorney, build a team you trust, and select a Regional Center with a track record of success. Christian Tyler Properties, together with our partners, understand that investors are looking for security and return of their investment capital all while maximizing their green card application success. Through everything we do, from selecting and promoting our projects, to monitoring job creation and immigration needs, we have set up a structure to provide as much security and stability for our investors as possible. From our corporate office, we have set up our facility to promote our projects, our investments, and the regional center to its fullest capacity.

 

About the Florida Equity and Growth Fund Regional Center:

  • Investment Team: Our investment team includes MBAs, CFAs, transactional attorneys, and commercial real estate developers
  • Extensive Experience: We have extensive experience in the real estate industry in terms of investing, developing and managing
  • Commitment to Compliance: We constantly strive for total USCIS and SEC compliance in all facets of our EB-5 platform
  • Financial Transparency: We provide financial transparency to all of our EB-5 investor families
  • Top Law Firms: We maintain relationships with the leading EB-5 law firms to ensure compliance with current USCIS policy and guidelines. Our trusted lawyers include Saul Ewing, Arnstein & Lehr, Miller Mayer, and Baker Donelson and others
  • Located in Florida: We are approved for the entire state of Florida, the 3rd largest state in the US, a state with no state income tax
  • Communication: We utilize state of the art communication tools so that we are available to our EB-5 investor families
  • Investor Assistance: Certain projects utilize Independent Loan Administrators to protect & assist investors with general information and to keep their files in USCIS and SEC compliance

 

If you have any questions, please contact us at info@christiantylerproperties.com. As always, we are here to serve you.