With the Regional Center Program in limbo, EB-5 Investors Must Vet Direct EB-5 Offerings.
By Jose E. Latour
As many of our readers know, American Venture Solutions Regional Center has our new EB-5 offering, the River Oak EB-5 new-construction rental community project, ready to go. While we wait for Congress to act and reinstate the Regional Center Program, a mountain of so-called “Direct” EB-5 projects are being aggressively marketed world wide to investors not wanting to miss the opportunity to invest at the current $500,000 TEA level.
I have nothing against Direct EB-5; in fact, I was one of the first attorneys filing these cases after the category was created in the Immigration Act of 1990. But the vast majority of the projects which have been hastily assembled for investors fearing the increase of the $500K threshold are fraught with risk, unclear exit strategies, and questionable projections.
Look, I get it: since we don’t know WHEN the current $500,000 TEA threshold will be raised, investors are eager to get on the EB-5 bus while they can. But in their eagerness, they need to be more careful than ever. I have been reviewing direct EB-5 deals and, with very few exceptions (which LatourLaw IS offering to accredited investors), most of the direct EB-5 deals on the market are wildly risky, not only in terms of preservation of capital but in real-world terms of job creation. The marketing is slick and compelling, but the pathway to residency is perilously uncharted.
Let me say this simply: AVS’ EB-5 projects are the ONLY EB-5 projects which can boast of having a Forbes-pedigree U.S. operating partner. These folks, with whom we’ve worked for decades, are the ONLY folks for whom AVS raises EB-5 capital. With a ten year record of investor approvals and repayment in full of loan-based investors, there is simply no better EB-5 option than River Oak EB-5. Soon, I hope, the RC program will be reinstated and we will have 60 new EB-5 investors joining the AVS EB-5 family. There is simply no safer and surer path to EB-5 permanent residency than via a conservative, loan-based offering administered by one of America’s most respected residential property groups.
Remember: $500,000 invested in an uncertain EB-5 deal exacerbates the required “risk” element beyond EB-5 legal requirements. Look at the deal carefully, do your INDEPENDANT due diligence, and if you simply refuse to wait for River Oak EB-5, contact LatourLaw to get our opinion on which of the current Direct EB-5 deals on the market we think will work out.