Twin Lakes Georgia: A Compelling Rural EB-5 Project

Twin Lakes Georgia is a 1,300 single-family home community development located just outside of Atlanta, Georgia. It is one of the most compelling rural EB-5 projects available today at $800,000.

Overview of the Twin Lakes Georgia EB-5 Project

Rural TEA Designation. The project is in a rural targeted employment area (TEA). Rural TEA designation qualifies EB-5 foreign investors for a reduced minimum investment of $800,000, priority processing of Form I-526E, and access to the largest reserved EB-5 visa category, taken from 20% of the total EB-5 visa supply.

All Required Jobs Already Created. Construction is already underway. Out of the 510 jobs required for Twin Lakes Georgia’s foreign investors, more than 1,220 positions have already been created as of September 2022.

I-526E Approval Refund Guaranty. The project provides for the accelerated repayment of any EB-5 investor who does not receive I-526E approval.

Independent EB-5 Oversight. EB5 Affiliate Network (EB5AN) controls the regional center and the general partner of the EB-5 investment fund for Twin Lakes Georgia and is 100% independent from and unaffiliated with the developer. Independent third-party oversight of EB-5 projects avoids conflicts of interest and reduces risk for EB-5 investors.

Excellent Developer Track Record. The Twin Lakes Georgia project is being developed by the Kolter Group, an experienced master-planned community developer. Kolter has never failed to complete a project or to repay a loan in 25 years. Kolter has worked with EB5AN on more than 10 prior EB-5 projects, and all EB-5 investments in Kolter projects are either in good standing or have been repaid.

Affordable Single-Family Home Development. Affordable single-family home community development projects are relatively safe investments. Twin Lakes Georgia in particular offers affordable homes within a short distance of a major metropolitan area and more than 400 homes have already been sold, demonstrating clear market demand for the product type and price point offered by Kolter.

These features make Twin Lakes Georgia a best-in-class rural EB-5 project that stands out among the other EB-5 investment opportunities available today. Below, we examine each of these topics in greater detail.

Understanding Rural TEA Designation

To qualify as a TEA, a project location must either be within a rural area or in an area with high unemployment compared to the national average unemployment rate. Certain public infrastructure projects may also qualify for the benefits of TEA designation.

For an area to qualify as a rural TEA, it cannot have a population of more than 20,000 people or border a municipality with more than 20,000 people. Additionally, rural TEAs cannot be in metropolitan statistical areas (MSAs). Applications for rural TEA designation must be accompanied by evidence from the most recent 10-year U.S. census data that the area qualifies.

EB-5 projects in rural TEAs offer significant benefits to EB-5 investors. Rural TEA designation allows EB-5 investors to invest at the lower amount of $800,000. Investors in rural TEA projects are also eligible for set-aside EB-5 visas, which may allow them to complete the EB-5 process more quickly. Investors in rural TEA projects also benefit from faster Form I-526E processing. Form I-526E is the first application in the EB-5 immigration process.

Due to their rural locations, however, such EB-5 investments may carry different risks than urban projects. Because rural areas have fewer people, they often have less economic activity. As a result, investors must take care to identify rural EB-5 projects with strong economic fundamentals and to understand the immigration and financial risks associated with the project.

Comparing Risks in Different Types of Rural EB-5 Projects

While all EB-5 investments carry some risk for EB-5 investors, certain types of projects are riskier than others. Before making an EB-5 investment, foreign nationals should carefully examine each project’s specific risk profile. Sometimes rural projects carry more risk than similar projects in urban areas, but not always. Rural projects are more likely to carry certain types of risk related to their location, and some kinds of projects are not as well suited to rural areas.

Three popular types of rural EB-5 project are hospitality, manufacturing, and master-planned community developments. Each of these types of projects presents certain risks when developed in a rural setting.

Risks in Rural EB-5 Hospitality Projects

Hotels and other hospitality businesses are dependent on consumer travel and spending. As a result, these types of business are greatly impacted by fluctuations in the economy. During economic downturns, fewer people travel and many who do are looking for economical options.

Hotel and hospitality projects in rural locations may experience insufficient market absorption. Market data may not be available or is limited for rural areas, which means a new hotel or business will have an unpredictable effect on the local economy. Since rural hotels and hospitality businesses rely on travel, they may fail to earn a profit simply due to insufficient traffic. A project that lacks sufficient data to show it is viable means greater financial risk for EB-5 investors.

Hotels require full-time staff to operate, so scaling back operations may not be possible. Many rural hospitality projects opt to fire their employees and shutter their operations rather than operate at a loss. Such a choice would be catastrophic for EB-5 investors: they may lose their investment capital, and their immigrant petitions would likely be denied.

Furthermore, hotels and hospitality business often require significant upfront spending years before they start to earn any revenues. EB-5 investors in hotel and hospitality projects face significant financial risk. If development is delayed for some reason, EB-5 investors also face increased immigration risk.

Risks in Rural EB-5 Manufacturing Projects

According to the U.S. Department of Agriculture, rural manufacturing employment has been on the decline. From 2001 to 2015, total U.S. employment grew by nearly 7%, but manufacturing job growth decreased by 21%. In other words, rural manufacturing became a smaller part of the overall U.S. economy. Two separate recessions during that period caused many rural manufacturing plants to permanently shut down.

Rural manufacturing plants are profitable only when running at full capacity, meaning most are unable to scale back production during an economic downturn. Instead, such plants are forced to close rather than operate at a loss. Rural plants are very susceptible to economic downturns, which makes rural manufacturing EB-5 projects riskier for EB-5 investors.

Like hotels, the time and cost to develop manufacturing plants are considerably greater compared to the development of individual homes and amenities in master-planned communities. While manufacturing facilities require massive spending over a period of years before profits can be realized, each individual house in a master-planned community can be built and sold in a matter of months. For manufacturing plants, cost increases may result in insufficient funds to complete development. If more capital is needed, obtaining loans or additional investments could take time. Supply-chain issues during construction can also delay development, which may negatively impact EB-5 investors.

Together, these factors can result in EB-5 investors’ funds being committed for prolonged periods. These projects also often entail greater risk that EB-5 investor capital will not be repaid. Potential delays in development may affect job creation.

Risks in Rural EB-5 Master-Planned Community Projects

Like hospitality and manufacturing projects, rural master-planned community development projects can be vulnerable to economic downturns. Fluctuations in the local housing market may directly impact construction activities, which could in turn affect EB-5 job creation.

Unlike hospitality and manufacturing projects, however, master-planned communities are developed in several small stages. In a master-planned community, each house represents only one small part of a much larger project.

Houses and lots are often sold before building begins, so spending often happens at the same time as earning. Financial risk is reduced since short-term investments are directly tied to revenue cash flows. Additionally, construction pace can be adjusted to reflect current market conditions.

For hospitality and manufacturing developments, cost increases are absorbed by the developer. For housing, however, homebuyers typically absorb any cost increases. As a result, master-planned community developments may carry lower financial and immigration risks for EB-5 investors and may increase the likelihood of a timely return of their EB-5 capital.

Benefits of Selecting a Rural EB-5 Project

Although rural EB-5 projects may mean additional risks to EB-5 investors when compared with similar urban projects, the benefits of investing in rural projects can make the added risk entirely worthwhile.

For example, the reduced investment amount of $800,000 for investments in TEA projects helps mitigate the greater financial risk associated with rural projects.

Additionally, investing in rural TEA projects grants EB-5 investors access to reserved EB-5 visas, which is especially beneficial for investors from countries experiencing EB-5 visa retrogression. (Countries whose number of EB-5 visa applicants is greater than the number of available visas are considered to be in visa retrogression.) Investors who gain access to reserved EB-5 visas avoid the lengthy delays associated with visa retrogression. Investors with reserved visas can often immigrate into the United States years earlier than otherwise possible. In effect, reserved visas allow investors to skip ahead of other EB-5 visa applicants.

Under the EB-5 Reform and Integrity Act of 2022, 20% of all EB-5 visas are reserved for rural TEA investors and their qualifying family members. The rural category offers the largest supply of reserved visas—the high-unemployment TEA category and infrastructure category represent only 10% and 2% of all EB-5 visas, respectively.

EB-5 investors in rural TEA projects also benefit from priority processing of their Form I-526E applications, which means faster adjudication times and reduced waiting times to receive U.S. Green Cards.

Evaluating Rural EB-5 Projects

Some preliminary research can help investors avoid risky rural EB-5 projects.

EB-5 investors can help safeguard their investment capital by thoroughly vetting developers. Investors should confirm that the development team has ample experience, a proven track record, and the backing of an institutional lender.

Investors should also assess how much developer equity has been invested in the project and whether the developer is planning to replace or recapitalize their equity with EB-5 funds. If a developer uses EB-5 capital to repay their equity, then developer risk is reduced while EB-5 investor risk is increased. Prospective EB-5 investors should avoid any project that uses EB-5 capital to repay developer equity.

The type and location of a project are also important to consider. For example, a rural hotel project in a low-traffic, low-tourism town is inherently riskier than an urban hotel project in a major travel and tourist destination. Prospective EB-5 investors should research each project to better understand whether the project is viable under current market conditions.

Additionally, the regional center sponsor for an EB-5 project should be led by experienced and knowledgeable industry professionals who are 100% independent from the developer. A skilled and trustworthy regional center sponsor is vital to EB-5 investor success since the EB-5 program is currently undergoing some changes due to passage of the EB-5 Reform and Integrity Act of 2022. This reform bill changed the compliance and reporting requirements for regional centers and altered how rural TEAs work. USCIS has not yet issued guidance on how the changes presented in the reform bill will be implemented.

Now, more than ever, inexperienced regional centers with no track record of success in the EB-5 industry pose significant risks to EB-5 investors.

Twin Lakes Georgia Is a Best-in-Class Rural EB-5 Project

Twin Lakes Georgia is a unique rural EB-5 project, offering unparalleled features that limit both immigration and financial risk for its investors. A highly experienced development team with a spotless EB-5 track record, proven market fundamentals, an independent regional center, and enough jobs already created to satisfy the EB-5 job creation requirement for all investors—and several other features—make Twin Lakes Georgia one of the most compelling rural EB-5 projects on the market today.

Experienced Development Team

Kolter is an experienced developer, with more than 20,000 homes built and an extensive year track record developing real estate since 1997. As one of the top 25 largest privately held home builders in the United States, Kolter has more than $19 billion of expected value in residential, commercial, and hospitality transactions. With an operational footprint in the southeastern United States, Kolter’s market and sector knowledge has positioned the firm to capitalize on emerging trends in U.S. real estate.

Additionally, Kolter has extensive EB-5 experience. Kolter has collaborated with EB5AN on more than 10 EB-5 projects. These projects have been financially successful, which for EB-5 investors means sufficient job creation to fulfill the requirements of the EB-5 program. All prior adjudicated EB5AN Kolter EB-5 projects have been approved by USCIS.

Kolter has never failed to repay a loan and has access to institutional senior financing. The Twin Lakes Georgia project, for example, has a senior loan through Wells Fargo Bank, the world’s fourth-largest bank by market capitalization. All EB-5 investments in prior EB5AN Kolter EB-5 projects remain in good standing or have been repaid by Kolter.

Strong Financials

Developer equity accounts for a sizeable portion of the total development costs for Twin Lakes Georgia. Since the project is a single-family home community and homes are built and sold over an extended period of time, a significant portion of the capital required to develop the project is recycled as homes are continuously built and sold, which significantly reduces the financial risk of the project.

Additionally, the development of Twin Lakes Georgia is not dependent on EB-5 investment, and there is no minimum EB-5 capital raise.

Proven Single-Family Home Market

The single-family home market around the Twin Lakes Georgia project site, is highly active. More than 400 homes at Twin Lakes Georgia have already been sold. Kolter’s market and sector knowledge of the region have driven sales in Twin Lakes Georgia. The long-term trend for single-family home supply in the United States is 30% below the historic average, which leaves significant room for growth.

In particular, a growing number of retiring seniors are migrating to Sunbelt states like Georgia, and so demand continues to exceed supply. The Twin Lakes Georgia development offers affordable homes ranging from $296,000 to $502,000. Competitive and affordable prices, and Kolter’s commitment to quality make Twin Lakes Georgia an excellent choice, especially for retirees.

An Experienced, Independent Regional Center

EB5AN serves as the regional center sponsor for Twin Lakes Georgia. The regional center is totally independent from the developer, which means that the regional center is focused on meeting the needs of the EB-5 investors without conflicts of interest. EB5AN is an experienced EB-5 regional centers operator that has facilitated more than $1 billion of investment under the EB-5 program, and its total project development costs exceed $4.1 billion.

EB5AN’s world-class, low-risk investment offerings have served more than 2,000 immigrant investors from more than 60 countries.

All Required EB-5 Jobs Already Created

Each EB-5 investor must demonstrate that his or her investment has resulted in the creation of at least 10 new, full-time, qualifying jobs for U.S. workers. Projects sponsored by a regional center can count both direct jobs on their payroll and indirect employment resulting from the project’s construction expenditures and revenue creation.

As mentioned previously, Twin Lakes Georgia has already enough EB-5 eligible jobs to satisfy the 10-job requirement for all EB-5 investors who join the project.

Only 510 new jobs need to be created to support the maximum number of EB-5 investors. Beyond this, the Twin Lakes Georgia project is expected to create a total of 6,945 qualifying jobs for EB-5 investors—roughly 138 jobs per investor. Therefore, investors in the commercial enterprise will enjoy an ample job creation cushion and higher chances of a successful immigration process.

Additional Features that Mitigate EB-5 Investors’ Risk

The project provides for the accelerated repayment of any EB-5 investor who does not receive I-526E approval.

Twin Lakes Georgia: A Unique, Low-Risk Rural EB-5 Project

No EB-5 project can fully mitigate all risks to its investors. Financial and immigration risks are simply a part of the EB-5 program. Some projects, however, significantly reduce investors’ risk and represent much safer options.

Twin Lakes Georgia offers several unique features that mitigate both financial and immigration risks and provide unparalleled safety to its investors.

For more information on the Twin Lakes Georgia project or other rural area projects, please schedule a one-on-one call with EB5AN or send an email to info@EB5AN.com.

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