Reducing risk in EB5 investment projects:

Reducing risk in EB5 investment projects:

 

1.      Underlying guarantees:

          -      Government participation local/state/federal

          -      Performance guarantees by project owner/developer

          -      Collateral / on-hand cash exceeds immigrant investment by 50%

          -      Collateral secured by real estate valued in excess by 50% of investors participation

          -      Stocks convertible on demand

          -      Project cash reserves in excess by 25% of EB5 investment

          -      Developer/owner with minimum of ownership position of 30% in the project

          -      EB5 investments part of an LLC structured with a capital call in event of the projects failure or threatened non-performance

 

2.      Some return in immigrant’s investment is preferred by; immigrant investors think a 1% per year return over period of the investment is adequate

 

3.      Offer of cash out benefit at end of repayment term, as participation of the project, or as a benefit from the project (condominium in a mixed property)

 

4.      Early debt retirement, standard package is now five (5) years, successful projects are offering 3.5 years for debt retirement

 

5.      Risk analysis of the project by a third party 

 

6.      Projects that feature a Small Business Loan component

 

7.      Job generation:

          -      Direct jobs exceeds USCIS requirements by 25 - 50%

          -      Indirect jobs exceeds USCIS requirements by 25 - 50%

          -      Independent auditors review of project to verify performance claims

8.      Independent auditors review of project to verify performance claims

 

Projects likely to succeed based on current agent requirements:

 

9.      Health care facilities:

          -      hospitals

          -      emergency care centers

          -      assisted living facilities

 

10.    Education:

          -      university projects,

          -      permanent on-site structures

          -      charter schools

          -      state supported educational institutions

 

11.    Energy projects (wind farm, solar, coal liquefaction, bio-fuels)

          -      electrical components used in alternative energy

          -      alternative energy delivery systems

          -      new alternative energy construction

 

12.          Automotive:

                -      major brand site expansions

                -      major brand component / accessory production sites/facilities

 

13.          Major brand food production

                -      production facilities with long term leases

                -      respected partners

                -      persuasive and provable econometrics

 

14.          State / Federal financed/owned construction projects

 

 

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