something just for the immigration status - EB5 investment

[Daniel Hsieh]

By definition, EB5 is “created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.”

So why am I talking about EB5? There are many capital extensive projects that require equity investors. My wife’s cousin’s family is looking into attaining Green Card, and EB5 project provides a way for them to obtain just that. Normally, projects that are EB5 eligible will have to generate certain numbers of job created per the investment, along with other key criteria. One way for EB5 eligible project to get equity funding is by reaching out to immigration lawyers to see if their affluent clients will invest in the project in exchange for their immigration status, in this case, Green Card. The particular project I saw requires 26 EB5 investors with $500k in the project that is worth $48m. Doing the quick math and you will see that that is more than 25% coming from the EB5 investors. The beauty/ugly of the deal is then that because the project sponsor know that EB5 investors are really looking to obtain Green Card which they otherwise can’t get, EB5 investors are promised a lower return. In this Houston apartment building project I was shown, the EB5 investors are getting 4% return, and they are perfectly fine with it. It is a win-win situation for both project sponsor and the EB5 investors. Project sponsors are getting someone who are willing to invest but require lower than usual return. EB5 investors deploy their capital into sound real estate project. Although they are earning low return, they got their immigration status that could benefit them and their immediate family. I wasn’t shown how the cash will be split once the project got refinanced though.

My take away, immigration lawyers are another resource to find capital project to invest in. Imagine you are not EB5 investors but rather the direct investors, what kind of return do you get when most investors only require 4% return. You do the math.

I document my real estate investment journey here. Hope whoever reads it can benefit from what I have learned and experienced. 

Main Street Journal