"If You Build it…They Might NOT Come"….
-paraphrasing the line from Field of Dreams
Sheep mentality is a terrible thing. It is something that
has plagued mankind since the earliest written records, something which seems
to be more a byproduct of fundamental human emotional patterns than the result
of consistently flawed intelligence.
Recently, we have seen sheep mentality – and it's closely
related cousin, greed – destroy our real estate markets, compromise the
integrity of our banking system, and wipe out what was left of our already shaky
faith in Wall Street. Today, a smug self – congratulatory European Union is
basking in their "decisive" decision yesterday to inject nearly $1
trillion into the Euro economy, in the name of saving the Euro, Greece, and all
the irresponsible megabanks throughout Europe who stupidly continued to
purchase Greek sovereign bonds despite the litany of economic warnings,
catastrophes and indicators which have been obvious to all for the past decade
or more. All of these unfortunate catastrophes have one thing in common: they
permit the "sheep" to walk away unscathed, while the collective
irresponsibility of poor financial decision-making is borne by the totality of
the population.
I've written about this before as it relates to the
astonishing number of EB 5 regional centers which have been filed and approved
in the past year. I've also told you about the "cottage industry" of
attorneys who, like myself, knew comparatively little about the GOOD, new-
generation EB 5 regional centers but who now profess to be "experts"
and are aggressively marketing their "regional center formation
services" to cash-strapped developers everywhere. Not a week goes by where
I am not contacted by someone looking for "EB 5 money".
Yesterday, I was contacted by an old friend, precisely about
this subject. My friend is a veteran real estate investor who well understands
the vagaries plaguing our current economy. Still, word gets around, and the
notion of setting up an EB 5 financing mechanism seems to be spreading through
the development community in the United States with the eye-popping speed of
a South Florida Ponzi scheme.
Getting a new regional center approved isn't the hardest
thing in the world; establishing one that meets the complex criteria which both
satisfies statutory requirements AND provides the foreign investor with a
comparatively safe investment vehicle to his or her permanent residency IS.
As the number
of approved regional centers continues to go up, the irony is that it gets that
much easier to separate the proverbial wheat from the chaff. Sift wisely.
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