Webinar with Top Attorney on India EB-5 Visa Retrogression

Sam Silverman:
Hi everyone. This is Sam Silverman, Managing Partner at EB5 Affiliate Network. Thank you for taking time to join us on today’s webinar. We’re going to chat about the recent Visa Bulletin Update that just came out two days ago with respect to EB-5 Visa Retrogression for Indian-Born EB-5 Investors during today’s webinar. If you have any questions, please use the chat box and we’ll try and answer as many questions as we can at the end of the webinar. We will make these slides available as well. So if you’re interested in getting a copy of the slides, please send us an email to info@EB5AN.com. A video recording of the webinar will also be posted on our website in the next day or two with a transcription.

Okay. Let’s get started. First, this presentation is not legal advice and is for informational purposes only. Before you make any investment or immigration-related decisions, you should speak with your EB-5 immigration attorney. I know Rohit is available and taking on new clients, and he’s one of the best attorneys out there with respect to EB-5. So if you are looking at doing an EB-5 investment or you have already made one, and you’re not happy with your current legal counsel, reach out to Rohit. Okay, a little bit about EB5 Affiliate Network. We’re a national EB-5 investment fund manager. We’ve been in this space for about 10 years at this point and we work with clients from around the world. For today’s guest, we have Rohit Kapuria, one of the top EB-5 attorneys in this space. We’ve been working with Rohit for almost the entire time we’ve been in EB-5, and I’ll let Rohit jump in and share a little bit about his background and experience and particularly touch on his work with EB-5 investors from India.

Rohit Kapuria:
Thanks, Sam. It’s a pleasure to be here. My name is Rohit Kapuria. I’m a partner at Saul Ewing Arnstein & Lehr. We are a national law firm with 17 offices and 400 plus attorneys around the country. Specific to EB-5, I wear two hats. I’m a corporate securities guy, but I also represent a substantial number of investors. Specific to the webinar today, my focus with the investor base is predominantly from India or predominantly Indian born, if you will. So I represent a sizable batch of the Indian-born applicants around the country, and that’s why I was invited today to provide some of my thoughts.

Sam:
Perfect. Thank you, Rohit. So a little bit more about EB5AN. As I mentioned earlier, we’re a leading national investment fund manager. Over 2,000 investors from more than 60 countries have chosen to work with our regional center sponsored projects over the years. This is a quick map showing where many of our investors have come from to date. We have one of the largest platforms of regional centers active across the United States. This is a map showing many of our prior EB-5 projects, both direct and regional center projects around the country. And this is a quick overview of myself, Sam Silverman, on the left hand side and my partner, Mike Schoenfeld. I’ll let Mike jump in and introduce himself and share a little bit about the path that our company has taken over the last 10 years.

Mike Schoenfeld:
Perfect. Thanks, Sam and thank you everybody for joining the webinar today to go through this breaking news. As you can see on the right side of the screen, I’m Mike Schoenfeld. Prior to founding EB5AN with Sam about a decade ago at this point, I was in private equity in New York working on leveraged buyouts and both Sam and I worked for the Boston Consulting Group before that. So one of the things that we’ve tried to bring to the EB-5 industry is more of that institutional knowledge and professionalism, providing best practices in terms of project management. And over the past decade, we’ve worked to provide high quality EB-5 investments that minimize both immigration risks. We ensure that all jobs will be created and the applications are approvable and also financial risk by partnering with best-in-class developers with well underwritten projects where we have high levels of confidence in project success.

Sam:
Perfect. Thank you, Mike. So the reason we are having this webinar today is that a few days ago, the U.S. State Department issued their monthly Visa Bulletin for October and this is the first time that this Visa Bulletin reflects that the Indian-Born Investor Category for the 5th Unreserved Category has now not become current. Essentially that means it’s retrogressed or is facing a backlog. Rohit, can you walk us through how the Visa Bulletin works and what the significance of this new update is? Then we can talk about the next slide, the new three set aside categories and how those categories will interact with a prior category, which has been consolidated into this 5th Unreserved Category.

Rohit:
Sure. So the Visa Bulletin is a projection made by the State Department in conjunction with USCIS on a monthly basis. What they do is they look at the total number of visas available. They then look at the total number of allocations on a per country basis, particularly with respect to some of the high demand countries, which in this case, we have India, China, and Vietnam for EB-5. Then they make a projection on what the demand is going to be going forward. And so we have essentially four categories that have been listed, but particularly out of those four categories, you also have a particular set of investors. For those who are on this call who are the investor base, particularly from India, there are two elements here that we need to note, and our discussion today will be focused on that. The first element are those who invested prior to March 15th of this year when the EB-5 Reform and Integrity Act of 2022 was signed into law by President Biden and then those who are going to be filing or have already filed after that March 15, 2022 date. In particular though, on one end, based on this preference category that we’ve seen and the date that we have of November 8, 2019, you have another further element where you had a set of investors that filed during a rush period when the investment amount was increasing to $900,000 on November 21, 2019, and then you have those that filed between this November 8, 2019 date through March 15th. So there’s separate sets of investors that are probably joining this call, and we are going to be talking about how this impact on the backlog is going to affect each group. Back to you, Sam.

Sam:
Got it. Thank you, Rohit. So let’s talk about how the prior investors category—this 5th Unreserved Category—now fits in with these new categories. So as most people probably are aware of at this point, is that under the new 2022 EB-5 Reform and Integrity Act that’s now in effect, one aspect of that new law is the creation of these three new visa set asides. 20%, 10% and 2%, which you can see here at the bottom. So what that effectively means is that 32% of all of the available visas, the 10,000 visas per year, are now set aside off the top and are allocated into these three new categories or new lines, essentially. What that means is that those visas are new. Only a few investors since the last month or two have been able to file under those new categories. So that means a few things. First Rohit, do you want to walk us through how the 10%, 20%, and 2% gets applied mathematically when we look at the 10,000 visas per year and how that fits in with the country allocations? I think that’ll be helpful.

Rohit:
Sure.

Mike:
I think the other thing there is just thinking about how long until any of those categories could show as not current, just knowing what we saw with the current categories retrogressing as of a couple days ago.

Rohit:
Okay. For those listening on the call, this is obviously really complicated. There are a lot of projections that are made here, and we want to be extremely clear that what we are discussing on this call is current in terms of knowledge that we have today, but it is all subject to change. And if you are seeking any actual legal advice, please do get in touch with your immigration attorney to get their thoughts on this particular matter. But one important element here, which is how we have the breakdown of the pre-RIA, those who filed prior to March 15th of this year, and the post-RIA, those who are filing right now or who have actually filed. The first important thing on the post-RIA as Sam indicated, is there have not been that many actual investors that have filed Form I-526E petitions in the last few weeks.

A lot of this basically came about by various interpretations that the government had with respect to the RIA application and how visa allocations are going to occur. There was very successful litigation in which we had a recent settlement that has now spurned action. We’re thankful to all the plaintiffs in that particular case that led the path for the entire industry, and as a result of that particular settlement which came a few weeks ago, we now have I-526E petitions that are being filed. But based on that total number, we are aware that not too many petitions have been filed. So the one big takeaway on this call for the post-RIA investors is that the sooner you file the better because you get your place in line. So now walking into the 10,000 visa allocation, which if we look at the numerical limitations based on history, the total number is actually closer to 9,940 odd investors each year.

So if you take that particular number and then you break out each of the reserve visa set asides—20% for rural; 10% for high unemployment TEA; and then 2% for infrastructure—you get your total value of investors in each of those subcategories. Importantly, for those who invested pre-RIA, the bad news here is that even if you had gone in, let’s say a rural project, before the RIA in 2022, you are not going to be able to port your petition over into the new category. So that portability is basically no longer available to us. We had pleaded with the State Department. ALA had also asked that question and in June of this year, the State Department indicated that they’ve basically drawn a line in the sand. So what we’re discussing on this set aside is very specific to only those investors who are going to file, or who have filed in the past couple of weeks, or who will be filing in the next few months or in the next few years.

The second important element out of each of these subcategories—the 20%, the 10%, and the 2%—is that the 7% value in a per country basis is going to apply. So if we keep the math really simple, and we talk about rural instead of the 9,940, we save the 10,000 number. If you take 20% off the map, you have 2,000 visas that are basically available in the rural category. From that, you then have to apply that on a per country aspect. So for Indian-born applicants, we are going to take 7% of that 2,000 to see basically what is available to us, right? There will be approximately 140 odd investors. And from that, we then apply it based on how many visas we believe are going to be allocated to each of those Indians. Right? So if we take the percentage and indicate, well the average Indian EB-5 applicant is going to account for 1.5 visas or two visas on the basis of petitioner and spouse. If there’s a child involved, then it’s petitioner, spouse, and kids. That’s three visas. You then have to apply the math. As you start to look at that, it’s not a lot of visas that are basically going to be available. So again, the key takeaway that we will have on this call and this webinar is the sooner you file, the sooner you get your place in line, the better off you are in terms of securing your visa aspect moving forward.

Sam:
I think that’s a really important illustration to understand. So let’s go through that math equation. Now we’re assuming that this investor is filing in a rural project. So if there’s 2,000 rural visas available out of 10,000 (20%), then we’re multiplying that by 7%. That gives us 140 available visas for Indian-born citizens. For simple math, let’s divide that by 1.4 visas assuming that there’s 1.4 visas per family with marriages, kids, etc. Just a rough estimate of 1.4. That would imply that there’s 100 Indian EB-5 investors each year that would be able to invest and get approved. The first 100 essentially is the size of that pipe per year per country. Is that correct?

Rohit:
100 visas available. Correct on the basis of that. Yes. 100 EB-5 investors. Correct.

Mike:
One other thing I think is important to note is that any visas that aren’t used, that rural still gets the 2,000 plus or minus a year, and any that aren’t used by other countries do flow back just like in the 10,000 category. Is that right Rohit? So it’s not really limited to that unless the rest of the world does take up the other 1,800 visas, let’s say.

Rohit:
No. If we take the strict interpretation of how this is going to work, if we have unused visas within these specific categories, they will then flow into the subsequent fiscal year. So we basically get another shot at the next fiscal year where we have an excess of visas. There are other views that we are trying to determine whether or not the State Department is going to actually allocate on the basis of what the RIA indicates that possibly it is going to flow back. But as it stands right now, unless we have some sort of recapture, adjudication, or pronouncement by the State Department, we are not going to be able to benefit on the rest of the worldwide basis. So again, we have our two categories of investors. We have the pre-RIA and we have the post-RIA. For the post-RIA investors, we are, and particularly for India, we are stuck at the 7% cap of the narrow subcategories. That’s where we’re going to have our total number of visas that may then get reallocated the following year when we have excess that’s available.

Sam:
Got it. Okay. So let’s zoom out a little bit and talk about the Form I-526 and I-526E approvals, and then the actual issuance of the visa with the State Department and how the processing time of the actual application and what applications are going to be processed faster and sooner and given priority versus actually having a visa available once approved. I want to understand mechanically, is there an advantage? How does a faster approved application benefit in terms of grabbing a visa sooner than later?

Rohit:
That would depend on where the investor is. There is a marked advantage for those investors that are in country and are eligible for adjustment of status now over an investor who is out of the country. The marked advantage is the ability to concurrently file. If you are in country and you are able to invest and file an I-526E petition, you can concurrently file your adjustment of status. That gives you the benefit of the work authorization and gives you the benefit of the travel within six months to a year assuming the current pace of adjudications keeps as is. Even if there is subsequent retrogression, that particular person is not going to be negatively impacted because the work authorization can continue to be renewed over time.

So what we have again, post-RIA and pre-RIA is how quickly then is USCIS going to be adjudicating the I-526 petitions. One of the reasons that we have this backlog that is now applicable to the Indian-born applicants at the moment is because USCIS has started to adjudicate applications. Investors who were pre-RIA were filing concurrent adjustment of statuses and visas have begun to be allocated. So we’ve gotten to that element where the visa numbers have crept up. And so as a result, we are back at this particular retrogression. Now, if you look at it historically, in terms of how many visas were allocated between Fiscal Year 2015 to Fiscal Year 2018, the numbers were not that high in actual visas allocated to Indians. We were sort of tinkering around 110 visas in the height of 2015 and then it hit another height of right under 600 that I recall in Fiscal Year 2018. So we had a brief period where in Fiscal Year 2019, because the numbers crossed the 700 threshold, where at that time we had 10,000 visas, India did retrogress for some time. But then in Fiscal Year 2020 and Fiscal Year 2021, the total number of visas allocated to India dropped. A lot of that was because of COVID. So the State Department was not adjudicating petitions, USCIS was not adjudicating petitions. And so you had a huge drop in demand on visa issuances which is why India became current again. Now as visas are being reallocated, basically we have more visas that have crossed that 700 threshold and India is once again retrogressed. So that’s the genesis of this particular application. Now as I-526s which were pre-RIA and I-526Es which are post-RIA get adjudicated and visas get issued to the pre-RIA guys, we will then have better data as to where India is going to come in line, but it’s not something that we’re going to be able to predict this early.

Sam:
Got it. Okay. That makes sense. So in terms of high level overview here, investors who filed pre-RIA between November and March are likely going to face some type of a delay. We don’t know exactly how long yet, because it’s going to depend on a number of different factors. Rohit, what I would like you to explain is even though, as of today, the Visa Bulletin shows that India is not current. Do you have any clients who still haven’t filed their adjustment? And if you did, they can still file an adjustment. They just have to do it very quickly in the next few weeks.

Rohit:
Yeah. That’s the discussion that a lot of attorneys are having currently with clients who are eligible and there are different strategic discussions for those who are temporarily present in the United States. In my particular case, the handful of investors who have not yet filed adjustment of status were concerned primarily with the travel restrictions because the minute you file adjustment of status, if you’re not on, let’s say H1-B or L-1, or some other type of dual intent, you will be bound to the United States for probably the next six months to a year. So we’ve basically been reaching out in the last day and a half to those handful of investors who were holding off on filing adjustment to say, look, depending on your priority date, you may want to consider this and move forward.

I will make one particular point here. There is the October date, right? The Visa Bulletin is for October. So we have a few weeks basically, if you are eligible, where you may want to work with your attorney to determine whether or not it’s a good idea to file for the adjustment, because this is a short window. The second point is for the adjustment of status purposes. There are two separate charts within the Visa Bulletin. There’s Chart A and Chart B. Every month on the basis of coordination with USCIS and the State Department, USCIS decides whether or not it’s going to apply Chart A or whether it’s going to apply Chart B. For the month of October, USCIS clarified yesterday that it will be looking at Chart B. So the actual retrogressed date for Indian-born applicants who are eligible for adjustment of status is actually December 8, 2019. While for those who are abroad, and not eligible for adjustment of status, the retrogressed date is November 8, 2019. So it’s about a month difference. That basically is going to change over time. But as Sam is making the point here, if you are facing retrogression and you are tinkering around that November of 2019 date when you filed your I-526 petition. So you’re pre-RIA. You should discuss with your attorney whether or not it’s advisable to file an adjustment of status, assuming you’re eligible.

Sam:
Got it. Okay. That’s super helpful, Rohit. So we touched on this a little bit earlier but walking through the three different new visa set aside categories again: 20% for rural projects with priority processing, meaning the I-526E application is going to be processed faster than in other categories; 10% for normal high unemployment TEA projects; and 2% for public infrastructure projects. Historically, almost all of the projects in the past were in high unemployment TEAs and even in today’s market, the vast majority of projects available today at $800,000 are high unemployment TEA projects. So given that, we believe that 10% set aside will be quickly exhausted and eventually the same type of retrogression that we’re seeing in China and we just saw reoccur in India a few days ago, is almost certainly going to happen in the future in these other categories. And of those three categories, it’s extremely likely that the first one where that will happen in is the 10% category because it’s half of that of the rural and almost all the projects available are in that category. So it’s not a question of if, it’s a question of when. So for investors who are not inside the country, that’s really important. These are the three most important takeaways. We’ll go through each one and have Rohit give his personal view on each of these as well. First, Indian-born nationals considering an EB-5 investment should strongly consider a rural project, especially if the investor is not already in the United States and eligible for an adjustment of status with concurrent filing. Rohit, do you want to share the one minute technical explanation as to why that’s the case?

Rohit:
Yeah. I think the line in the sand there relates to whether or not you’re able to file an adjustment of status application. So for those attending the call, the benefit if you are within the United States and you’re eligible to file adjustment is you get the work authorization and you get the travel authorization. So that in effect, in layman’s terms, is almost equivalent to a Green Card. It’s just not a Green Card. So you have the work style benefits that are allocated to you, but you don’t have the physical Green Card in your hands. And if India does get retrogressed, which we are projecting on the basis of the limited number of visas within the set asides, then at least if when that happens and you have the benefit of the work and the travel, you can continually renew those without the worry that you will not be eligible or you’ll have to wait down the line. You just have to physically wait for your Green Card.

So the question here then for an investor who’s outside of the country is do you want to avail yourself for more visas that are available within one category where there’s 2,000 visas, right? And remember we have the 7% country cap limitation. Or do you want to avail yourself of another category, which is a smaller one, where there’s a thousand visas. We’re going to see a shift in terms of dynamics. A lot of investors are going to be moving and flipping in between the two categories on the basis of where they feel their investment should go. So there is investment security considerations. There is comfort level considerations as to which particular type of project you like, what particular type of assets. And then there is immigration considerations as to the speed of adjudication and how soon you need the Green Card. So there are a multitude of different considerations that you should look at. But if the concern is speed, and if the concern is protection against retrogression, and specifically if you are outside of the United States, then yes, rural does start to look a lot more attractive from that standpoint. So these are, again, multivariable things. We’re not providing legal advice here, and please do speak with your immigration attorney and your investment advisor before you make any decisions.

Sam:
Exactly. There are many factors at work here. One of the key ones is, are you in the United States or not when you make the investment? Number two, as we mentioned on the prior slide, there will be a backlog in the future under these other set aside categories that are just now opening up. The first one will be in the 10% high unemployment set aside. So if you do, and that leads us into number three here, right? Which is okay if for whatever reason you’re not willing to consider or you just can’t find a rural project that you like, then the second best option is going to be investing quickly in a high unemployment TEA project, because that is going to be the one that’s most likely to hit a future backlog out of the three.

I should have underlined the word quickly here because under this category, there’s only 10% and because the vast majority of projects currently are in this bucket of visas, it’s very likely the case that a difference of even a few months in the filing date and your priority date of when you actually submit can mean a difference of years in the future in terms of actually getting the physical Green Card. Right? And we’re seeing that currently in China where there’s been so many investors who’ve invested in the past and it’s taking a long time to just move through the Visa Bulletin month by month by month. So one additional month, two additional months of waiting before filing, given the number of people getting in the line, a lot of people can get in line before you in just one or two months. As the line gets worked through, that can mean a very different waiting period later on. So those are things just to be cognizant of as you’re evaluating projects and thinking about if you want to do a rural project? Do you want to do a non-rural project? Do you want to do a partial investment and just get the application in, get your place in line and then fund it over the next 12 months? Those are all considerations that you should be thinking about. Mike or Rohit, anything else we should cover on this slide?

Mike:
No. I think that’s really, really helpful context. And again, no one can exactly predict the future. There’s a lot of complicated math going to go into how all of these visas are allocated in the future with the set asides, how many in rural, for example, of non-backlog countries take those. But I would say that the key considerations now that we’ve seen the Visa Bulletin are if you are able to file sooner, it makes sense. And it’s especially important to file in one of these categories if you’re already in the United States and can adjust your status. And if you’re outside of the United States, you want the best chance of getting through the process as quickly as possible, which would be the rural category.

Rohit:
So I think it’s important for investors on this call, both existing as well as prospective, to take a pause. Very, very importantly, we don’t know what is going to happen in the next few months. We don’t know how the calculations are going to happen. And we don’t know how quickly adjudications of pending I-526s and visa issuances are going to occur. It’s very important to note that USCIS has been extremely slow in terms of adjudications of I-526s and continues to be very slow. It’s also important to note that the State Department has not been allocating visas on a quick basis. So we’ve only just started to see over the last few months visas being allocated abroad. For Indian-born visas in Mumbai, they only started back in late May. So as a result of that, it’s important not to panic. If you are a pre-RIA investor, yes there is a concern because retrogression is there, but as a reminder, this happened once before and it wasn’t a long wait, right? So there was retrogression back in Fiscal Year 2019, and then after about a year or so, we became current once more. So as we see what happens with visa allocations, as we see what happens with adjudications of I-526s, we will have more information. So before anyone makes the determination of we are going to pull out and we’re going to stop investing in the EB-5 program or that the math that we’re presenting on this particular call about the visa set asides becomes a turnoff and say, well, you know, there’s no point because we’ll never be able to get it. Just consider carefully that this is just a projection and things will change because one element here is when we’ve used up the allocations on a 7% cap, whether or not that will then flow back in for the rest of the world within that short demand category, or whether it simply just gets passed over to the next year remains an open issue.

So there may actually end up being more visas down the line, assuming the State Department decides it wants to give us that generous application theory. So, I just want to remind everyone that this is not the time to panic. This is not the time to make a change. And particularly for those Indian-born investors who are here in the United States, do consider that EB-2 and EB-3 also moved backwards in this October Bulletin. So there was about a year and two year sort of difference wherein those who are relying on those categories can no longer rely. So those have actually shifted. So EB-5 still remains a very important and a much quicker process for Indian-born applicants at the end of the day.

Sam:
Got it. Thank you, Rohit. That’s super helpful. And part of that equation as well, is working closely with experienced EB-5 immigration counsel like Rohit or another qualified attorney to just think through your personal situation and make sure that given the information that we do have available today, that you’re making a fully informed decision to either adjust status or invest. Whatever that decision may be, you have the right information at the right time and not in a rush.

With that, we’re going to spend a few minutes chatting about two current projects that we have open today, and then we’ll open it up for a few questions at the end. So the first project we’re going to spend five minutes on is called Wohali Utah. It’s a rural EB-5 investment project located just outside of Park City, Utah. It’s our 15th EB5AN regional center-sponsored fund. It’s a single home residence community just outside of Park City. EB-5 investment in this project is structured as a secured loan. EB-5 funds come in and they’re used to develop individual homes, build amenities including a golf course, tennis courts, etc. EB-5 is about 20% of the total cost. This project is a rural project, so that means that it’s eligible for the larger 20% visa set aside and faster I-526E processing. The project is structured as a rolling five year loan, which means that the day each investor individually funds their $800,000, there is a five-year loan term that’s unique to each investor. So it’s very clear exactly how long funds are going to remain invested five years with a one year optional extension.

Phase 1 of the project is nearly sold out. There’s an I-526E approval refund guarantee and a job creation guarantee. Over 300 jobs have already been created. The senior loan has been executed and is already funded. And as I’ve noted here on the left-hand side, with this project, we do have the flexibility to do a partial investment. What does that mean? It means that you can start with at least $300,000 day one. File your I-526E petition, get your priority date, and lock in your place in line. Then over the next 12 months, at your discretion, fund the balance of the remaining $500,000 investment amount. So for investors who are already in the United States who really want to do a rural project, but they don’t have all of the $800,000 cash available on short notice, they can do a partial filing and get their place in line much earlier and then fund the balance when all the liquidity is there.

I’ll run through a couple of recent photos. This is a rendering of the main village community area of the project, and a recent golf course construction photo. We just visited this project a couple weeks ago. This is a rendering of one of the golf course cabins and some outdoor activities. One of the amenities of the project is a private 3,000 plus acre backcountry natural park. It’s extremely close to Park City which is a national vacation destination with lots of ski resorts. The Olympics were held in the immediate area many years ago.

This is a quick overview of the loan structure of the project. As I mentioned earlier, each investor is essentially making a miniature $800,000 tranche loan. The repayment time for each investor is tied only to the timing for that one investor. So if you invest on a certain day, you know exactly when your funds are coming back and you don’t have to worry about any other investors coming in, government processing, things like that. This is just tied to the period when your funds are actually invested into the project. It also makes it so that the money is being repaid in tranches over time which means that there’s not a requirement for a large single refinancing or sales event which we believe increases the financial safety for the investors as well.

This is just a quick overview map of the project itself, the primary development area, and the backcountry. It is a secure EB-5 loan with mortgages and an equity pledge as well. And importantly, with respect to that, we have an ongoing collateral pledge which makes sure that there’s sufficient assets and coverage for the EB-5 loan on a quarterly basis. So every quarter we look at the total available assets in the project minus any other senior debt. Then we look at what collaterals are remaining for the EB-5 loan. We also have a minimum 150% LTV test that’s reviewed on a quarterly basis. So that really makes it very transparent and clear to us as the lender overseeing the EB-5 funds that there’s sufficient assets there to secure the loan until the funds are repaid at the end of the loan term.

In all of our projects, we’re always focused primarily on mitigating immigration and financial risk and focused on how do we identify investments that are able to mitigate that risk as low as we possibly can while still meeting the USCIS requirements for keeping funds at risk. So on the immigration side, it’s a fully capitalized project. Senior loan has been funded with a major national lender. There’s over 44 jobs per investor with a job creation guarantee. Over 300 jobs have already been created as of August 2022. On the financial side, it’s a secured five-year loan with strong sales to date and ongoing LTV coverage. There’s an I-526E approval refund guarantee if your application’s denied for any reason, you’re getting repaid earlier. And the ongoing LTV test along with transparent investor reporting every quarter. On the job side, this is a quick overview of the calculations for the jobs. More than 300 jobs to date through August 2022 and total jobs of about 4,400 jobs at the end of the project. And with that, I’ll let Mike quickly walk us through the Saltaire project, and then we’ll open it up for questions.

Mike:
Perfect. Thanks, Sam. So our Saltaire St. Petersburg project is our normal TEA project. So it’s still at the $800,000 level. It is not a rural deal, but it does qualify as the high unemployment TEA. This is a project where the vertical construction is already completed. It’s up to 49 and a half million of EB-5. There’s a senior loan with Wells Fargo in place, and all jobs needed have already been created. So this deal is extremely far along. They’ve pre-sold one hundred percent of the condominiums and all jobs are created. In terms of an EB-5 deal, it does not get much better than investing in a project with all of those features. In addition, there’s a separate EB-5 loan repayment guarantee from one of Kolter’s parent companies which guarantees repayment of the loan. So this has all of those key features that we’ve discussed with the immigration risk and the financial risk working to minimize both of those. Here’s a current construction picture from August 2022. As you can see, the building is fully topped off, and they are working on putting in the windows and the interiors of the building at this point, but the full structure is done. And as I mentioned before, one hundred percent of these condominium units have actually been pre-sold. So there are hard nonrefundable cash deposits on one hundred percent of the units in this building.

We’ve got a couple of renderings here showing the views that the buyers are going to have, and the way that the layout is set up in the building. As you can see here, this is a summary of the jobs required. One thing that’s good to note is that this is a deal where we structured a Phase 1 on the project for EB-5 equity. That exemplar has actually already been approved. And now this is the EB-5 Phase 2, which is the loan aspect of the deal, and there have already been enough jobs created for every EB-5 investor that’s going to be in this project all the way through. Going back to those two key factors that we like to look at: the immigration and the financial safety. On the immigration side, all the jobs are already created. Phase 1 already has an exemplar approval and this project is fully capitalized, so it’s being completed. On the financial side, we’ve partnered with the Kolter Group on this project. They’ve done almost $20 billion of real estate development. They’ve never defaulted on a loan and we have transparent reporting on this project every quarter to our EB-5 investors.

I think that wraps up the formal part of the presentation. I’m sure we’ve had some questions, so let’s open it up.

Sam:
Yes. One question we got, Rohit, is about Canadian investors. Is there any difference in processing times or ability to adjust status for Canadian clients, or is that just the same as any other client, whether it’s H-1, L-1, F-1, or in this case, TN?

Mike:
I think we may have lost Rohit, Sam. Can you hear me?

Sam:
Yes, I can hear you.

Rohit:
Okay. Sorry. Looks like I had on mute there. I apologize. It depends on what the question is asking. If the person is asking whether a Canadian-born applicant is going to face retrogression, then no. In the short term and projected future, there is absolutely no concern because the demand from Canadian-born applicants is not that high. But what I do want to clarify is visa allocation occurs on the basis of country of birth, not country of nationality.

Sam:
Got it. Okay. That makes sense. One other question we got, Rohit, is about concurrent filing. Let’s say husband, wife, and two children are in the United States on H1-B. Can the concurrent filing be done just for the husband, or just for the wife and what if it’s just done for the parents, but then the kids want to adjust later. Is it all or nothing? And how can it be done and broken up separately if that is possible?

Rohit:
It depends on who the primary applicant is. Adjustment will be on the basis of the primary applicant and the derivatives. The kids should join regardless, even if it’s just one parent. Sometimes we have a situation where some spouses may have a different priority date under a separate category, and maybe they want to keep their options open. So one spouse will be under, let’s say, an EB-2 category and is near current. And then one spouse is still far away just because their I-140 date was much later. So we’ve seen situations where the person who doesn’t have any end goal in sight under EB-2, EB-3 would be the one that files the EB-5 application and will be the one that actually files for the adjustment of status. The kids will tag along with that particular spouse. Then the other spouse will remain outside of the application. This way they can keep two ends of the spectrum and have two separate paths as they go along. And assuming one comes in faster for Green Card purposes than the other spouse that didn’t join whichever process it was, would then come in later under, let’s say, an F category of some sort. So there are ways to do that. But again, you want to speak with your immigration attorney to determine whether or not that’s a good plan, what the cost implications will be subsequently, and what that means in terms of processing times.

Sam:
That makes sense. Rohit, one other question we got here is related to source of funds preparation for new investments and partial investments, and how it works in the context of making a partial investment. So if you were going to do a partial investment and put in, let’s say, $400,000 now and fund the rest in a year, what are some of the things you want to make sure of before you do that?

Rohit:
So partial investment ability has been around for a long time. We did a separate webinar on this a couple of months ago, right? I assume EB5AN has that available on YouTube or something. So listeners can go back to that particular webinar. But the partial has some attractive features and it has some unattractive features. The attractive feature on the partial is if somebody doesn’t have all the capital ready and they want to get their foothold in today and secure their place in line, then yes. I mean, you can file an I-526E petition on the basis of a partial investment. So that’s all great. The intricacies of the partial and what I always recommend if we’re doing a partial is that we try and source the entirety of the money at the front level. The reason that I like to do that is because when we file the I-526E petition, we should be able to show USCIS what the full source of funds is. And generally when I do these partials, it is typically for investors that are subject to some country remittance restrictions. So in the case of Indian investors, if you’re abroad, you are subject to the RBI restriction. So if you are unable to remit the full amount, but you have at least sourced everything, then I advise that the client basically segregate the balance of the money that has not yet been remitted and will get remitted in the next financial year so that when you do then wire the money later, it is the same money we’ve sourced. This can also work in a situation where it relates to a piece of property or real estate that has not been sold.

The problem arises when facts change. So if you file a I-526E petition, you say, well here is $200,000. And then the balance of the money, the $600,000 plus the administrative fee is going to come from this particular property that is appraised at a million dollars that we’re planning to sell and that property doesn’t sell. So you then have to change your source of funds. The question becomes is that a material change? If you are going do partial, be very clear with your attorney as to how that’s going to be presented in the application and what wiggle room you have, if any at all, so that you are not subject to material change interpretations by USCIS down the line.

Sam:
Thank you, Rohit. We’ve got time for one more question. When investors are evaluating projects, Rohit, what are two or three of the main kind of diligence items that you want investors to focus on? A lot of these investors haven’t made this type of financial or immigration investment historically. What are a couple of the main things that you try to inform investors on that they should be thinking about as they’re evaluating potential projects?

Rohit:
Sure. So that’s going to boil down into our two categories which are immigration analysis, which relates to the ability to get your Green Card, the ability to pass muster at the I-829, your source of funds, all of that. And then obviously the financial implications of the investment. Generally speaking on broad overarching theory here is you want to know who you’re going in with first, right? What’s the regional center? Who is the issuer? Who are the principals of the issuer, and then who is the underlying developer assuming it’s a real estate project? You basically get a lot of credibility because the issuer has conducted a significant amount of diligence on the underlying project. The issuer is the one that’s preparing the underlying project documents, which are the PPM, the subscription agreement, and the economic impact report with their various professionals.

The issuer is the one that’s actually going to be there as the general partner or the manager of the fund to protect your rights. And so, depending on what the disclosures are in the documents, you want to get comfortable that this issuer that you’re entering into a long term relationship with for the next several years is going to be there to assist if we hit turbulent times. An example of turbulent times is during COVID, a lot of projects got in trouble because of restrictions on travel so if they were hospitality projects and the like, they saw a lot of downward effect. So that’s generally where I end up focusing my investors is identification of who those players are, the asset class, and then obviously the financial strength of the underlying project.

Sam:
Got it. It’s obviously extremely important to focus on just the soundness of the underlying economic investment itself. Because usually if the investment itself goes well, then that takes care of everything else, both creating the jobs, immigration issues, and also capital safety. So just picking a sound business investment sounds simple, but there are a lot of factors that go into that. But that really is the key to making sure the process goes as smooth as it can go. Perfect. Okay. Listen, Rohit, we know you’ve got a busy day. So thank you for jumping in on short notice. For any questions that we weren’t able to cover that are related to either of the projects that we discussed, please reach out to us at info@EB5AN.com or send us a text or WhatsApp, and we’ll be happy to chat with you and give you more details on the partial investment filing options. For any questions specifically related to immigration or if you’re looking to hire an EB-5 attorney to do your source of funds, or you aren’t happy with your current attorney, please reach out to Rohit and he’ll take care of you. Thank you again, Rohit, for taking time to join us today.

Rohit:
My pleasure. Glad to be here. Thanks guys.

Sam:
Thanks everyone. Bye.

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