Webinar: USCIS Provides Additional Guidance on Required Investment Timeframe and Terminated Regional Centers—With Klasko Immigration and GT Law

Panelists’ Background

Sam:
Hi everyone. This is Sam Silverman, managing partner of EB5AN. Thank you for taking time to join us on today’s webinar. Today we’re going to be discussing some newly released guidance from USCIS with respect to the RIA and required investment timeframe and also terminated EB-5 regional centers. This is a very important topic that impacts both regional centers and investors considering projects, and we’ve got a lot of material and guidance to share—and information from both of our panelists today. During the webinar, if you have any questions, use the chat box on the screen. Because we have a lot of topics to cover today and we want to make sure we’re using time as efficiently as possible, we’re going to run a really short poll. So, please use the button on your screen and please click which best describes you so that we can try and spend more time on certain topics that would affect certain types of attendees and make sure we cover all the topics for the majority of the people. We’ll give that five more seconds.

Alright, so now we’ll get started. Again, we’ve got a lot of material to cover today. We’re going to try and keep it as interactive as possible. If we don’t get to cover a question, you can email us at info@eb5an.com and we’ll be sharing a copy of the slides. And this video will also be going to be recorded and will be on YouTube as well in the next couple of days. Okay. So, very quickly, EB5AN: we’re leading investment fund manager. We’ve worked with thousands of investors from around the world since 2013. This is a map showing where many of our investors have come from over the years. This is another map showing that we cover the entire continental United States so we can do projects all around the U.S. As I mentioned earlier, I’m Sam Silverman here on the left side, my partner Mike on the right. I’ll let Mike jump in quickly and share a little bit about his background before we move on to our panelists.

Sam:
Perfect. Thanks, Sam, and really appreciate everybody taking the time to join us today with some big news coming out of USCIS. We’re excited to have two great guests on here to help pick apart some of the guidance that was given and the questions that we should be asking. As you can see, both Sam’s and my backgrounds are on the screen. We come from the institutional side of the world, both worked at the Boston Consulting Group and then in finance after that. And our philosophy has been pretty simple: to bring institutional quality EB-5 deals to the market and also be a leader in providing transparency. And this is one of the webinars that we put together to make sure that everyone knows what’s happening within the industry. Perfect.

Sam:
Thank you, Mike.

Alright, so now to introduce our guest panelists, we have the great pleasure of having both of these top EB-5 attorneys with us on short notice: Ron and Kate. Ron, do you want to quickly start to introduce yourself and then Kate to follow?

Ron:
Sure. Hi everybody, I’m Ron Klasko and I head up the EB-5 practice at Klasko Immigration Law Partners. We’re one of the largest immigration-only firms. We have 115 people and we just do US immigration law. EB-5 is an important part of that. Our EB-5 team is divided into a group of attorneys who only represent investors, and other attorneys who represent developers and regional centers and put projects together. We have an EB-5 compliance team and we do EB-5 litigation—including the litigation that opened up the EB-5 program after the immigration service tried to shut down all regional centers. We were successful with that litigation. I personally have been chairman of the EB-5 committee of the American Immigration Lawyers for five years. I also chaired the best practices committee of IIUSA. So, that’s a little bit about our firm and about me.

Kate:
I’ll introduce myself as well. My name is Kate Kalmykov. I co-chair the Business Immigration Group at Greenberg Traurig. Greenberg Traurig is one of the largest law firms in the world. We have 47 offices worldwide with 2,700 attorneys. We have a national and international immigration group. We serve inbound clients as well as outbound. In the EB-5 space, we represent regional centers in immigration structuring and their annual filings. We do corporate securities offerings, we provide broker dealer advice, we offer guidance on the investment company acts and investment advisor registrations; we really offer the full gamut of EB-5 services to regional centers. We also represent investors, and we have filed thousands of EB-5 petitions from the 526 to the 829 stage. We also file litigation; a lot of mandamus actions for delayed applications in federal court, as well as EB-5-related litigation.

Overview of the Recent USCIS Update

Sam:
Perfect. Perfect. Thank you. Alright, so now we’ll jump into the meat of the presentation and start with an overview. And so, I’ll run us through this quickly and then we will dig into the actual guidance that was published. Generally, assuming this guidance remains in place and is not challenged (we’ll get into challenges a little bit later with both of our panelists), but assuming that this guidance does remain in place… Basically, how we interpret this is that for post-RIA investors (new investors who are investing $800,000 or $1,050,000 after March of 2022)… the keyword here is only. So, this is only applicable to investors who invested after March of 2022 already or who may invest over the next four years or so until the current program expires. Essentially, if this does remain the current policy, it really means that, no matter how long it takes for you to get your EB-5 Green Card, once your original investment in the original project you’ve selected has been at risk for at least two years (and assuming all required jobs for you as an individual investor have been created) you will be eligible for a return of your investment funds under USCIS rules without jeopardizing your EB-5 Green Card eligibility.

I realize this is a complicated sentence and there’s several commas places here, so it’s really important to break this down piece by piece. We’re going to get into that during today’s presentation and really talk about what these two years really mean, when do they start, when do they end and how does that impact the required jobs? Alright, let’s first review the guidance in general and then we’ll start breaking it down piece, piece by piece. Kate, do you want to start with us and tell us, how was this new guidance communicated? Where is it available, and what is it saying in terms of eligibility for repayment of funds?

Kate:
So, before I get into how the guidance was communicated and everything, I just want to say that the RIA was passed in March of 2022 and implemented in May of that year. We still don’t have regulations promulgated of the new statute. And so, what the USCIS is attempting, in lieu of promulgating regulations, is offer piecemeal guidance to the EB-5 community. There is a high likelihood that it may be questioned, it may be litigated because it’s policy guidance; it’s not considered law. So, this was published last week on October 11, five days ago. It’s available on the uscis.gov website. It was emailed as well if you are subscribed to the USCIS updates. And basically, what the new USCIS guidance says is that, for post-RIA EB-5 investors, investors who are filing under the new EB-5 law, they can now be repaid their invested capital after it has been invested and at risk for two years.

Prior requirements said that the EB-5 investment had to be sustained throughout the conditional resident period. So, you had to have I-526 approval, you had to be issued a conditional Green Card, you had to sustain the investment through that conditional two year residence period. And after the filing of your I-829 petition, you were eligible to be repaid. Now just because you were eligible to be repaid (and we’re going to discuss it in this context as well) doesn’t mean you actually were, because you’re still subject to the agreements that you subscribed to when you invested in the new commercial enterprise or the fund. So, the change now is that you’re no longer required to maintain your capital investment under this policy guidance throughout the duration of that conditional resident period or even have a Green Card prior to being repaid. And I’m sure that sounds wonderful to many investors, but there’s a number of risks (I think) that Ron and I are going to discuss associated with that; that they [investors] really need to consider [these risks] before allowing themselves to be repaid.

And for regional centers, there’s a number of things that they need to consider from the economic aspect of having a loan for two years, whether that’s feasible, to how are they going to repay. And so, we really have a lot of questions about the two-year period. The other thing that the guidance addressed was how the termination of regional centers will apply to both pre- and post-RIA EB-5 investors. And I think for me, it raised more questions than answers, but in a nutshell what they basically said is that, for pre-RIA investors we’re going to do what we said previously. We are going to say, if a regional center is terminated, then your EB-5 petition can still be approved, and for post-RIA investors it’s going to be a little bit different. You may need to file (and we’re not clear because they didn’t give a procedure in this announcement), an I-526E amendment if your regional center is terminated, but you will need to associate with a new regional center. So, that’s, in a nutshell, what the new guidance said. I think we can get into the specifics and the mechanics and the list of numerous questions that we have.

Sam:
Perfect. Ron, do you want to walk us through this and go through this specific language and what your read on that is?

Ron:
Sure, Sam. So, just a few introductory comments and then I’ll go through what the start date is for the two years and what the end date is for the two years (which we’re going to see is not exactly two years). What I want to start by saying is: we, for some number of decades, have represented a lot of investors and what we’re going to be telling our investors is to be very, very careful with assuming that, somehow, as long as I invest in something for two years, I’m going to get a Green Card. That’s not really what this is all about. This is certainly very… there’s parts of this that are very good news for investors. If you’re a Chinese investor and you have been in a 15 year waiting list and your sustainment period has for all practical purposes maybe been 20 years and the money that you invest has to be redeployed over and over and over again during those 20 years, this should say that that’s no longer necessary.

And that’s certainly good news for a lot of investors. However, it’s really, really necessary to be cautious. Number one… So, Kate mentioned a number of things. Obviously everything we’re talking about only applies to investors who invested after the RIA. It is important to understand that this does not say that every investment is two years. The offering documents, the PPM in your project that you subscribed to, will govern when you can get your money back. Now, if the offering documents say you’re going to get your money back in five years, that governs that the developer or the regional center or the project can give you your money back sooner if they want to, but it may not be possible in a project that was premised on, let’s say, a five-year EB-5 loan. Also, it’s very important to understand that this is not the law, and the immigration service can change this at any time.

And they’ve been known to do that in the past. The RIA is the law, the regulations are the law. The policy guidance does not even bind the immigration service. And if you go to their website you will see that it says that they are not bound by this. So it can be changed. Also, it was mentioned that there may well be litigation on this. I think that’s probably likely that there will be litigation on issuing a guidance memo to change the regulations. I don’t want to go into a lot of detail unless we want to, but if there’s litigation in the same way as the immigration service came out with a guidance memo that said all 630 regional centers no longer exist and we got a federal court to overturn that guidance memo. It is certainly possible that a federal court will overturn the guidance memo saying you have to do this kind of stuff by regulation.

And that’s something every investor needs to be careful about. So with all that said, we will talk about when the two years start and when the two years end. So, the two years start, first of all, when did you make your investment into the NCE, into the new commercial enterprise? You have to do that. Then that’s not enough. You have to show that your investment is at risk. So simply putting money into a bank account of the new commercial enterprise is not at risk yet. So then, you also have to show that your investment funds went from the NCE to the JCE, to the job-creating entity. And that may not happen immediately. There are different drawdown schedules. So, the day the money you invest goes into the NCE, the next day it doesn’t necessarily go to the JCE, and that can even be months later as the JCE needs the money.

And then lastly, it may well be interpreted that the two years does not start until the JCE uses the investment funds for job creation, and each investor may not know exactly when that happens. So the point I’m making is: there’s some good things about this, but it’s going to be very, very difficult to determine exactly when each investor’s two-year sustainment period started, [when] the two-year sustainment period ends, [and] when all of the necessary jobs for that investor have been created. Well, that is not a simple question: when that happens. So for example, in many projects, let’s say the project is a three-year construction project.

Let’s say there’s 50 investors in the project and there’s 500 jobs. At what point can we show that the necessary jobs are created for a particular investor? It’s not very clear. If we’re two thirds of the way into the construction of a three year project, does that necessarily mean that two thirds of the jobs have been created? No, it doesn’t. And I don’t want to go into too much detail here and maybe I want to give Kate a shot at her thoughts on all this stuff, but the main point I want to make is that the start date is not the date you make your investment. It may be well later than that that the two years start, and the end date is not two years later. The end date is when you can prove that the necessary jobs for you have been created and then even when you reach that point, will a project actually be in a position to return the money to each investor on a different day, and will the project have the money available in two years to repay the investor? So the repayment will be the later of when the jobs have been created for that investor and when the project has the available funds to be able to repay the investor. So let me stop there, Kate, and give you a shot at that.

Kate:
I think those are good questions, Ron. I mean, the issues that I see that really sort of raise a lot of questions for me is that you could potentially get paid out under this guidance and exit it out of the new commercial enterprise and then get a decision from the USCIS depending on how long they take to adjudicate your case—that either questions the economic methodology or denies the economic methodology. And so, it’s really risky. Investors will really need to be kept informed by the regional center or the project if they’re looking to pay them out in this shorter time period of the job creation. They’re going need to provide materials to them surrounding the job creation and how it was met. And they really need to give that to investors before any kind of repayment occurs. And this is not something new.

We actually have even seen when we filed I-526 petitions in the past that job creation went through. Okay, and you made a really good point, Ron, that the USCIS changes policies. They can say something one day and they can reverse it later. And so we saw this with tenant occupancy, they may have approved it at the I-526 stage and then later when they were adjudicating I-829 petitions, they questioned the job methodology, they questioned the inputs of the employment creation, they questioned whether you can take credit for jobs created by the businesses that lease space. It was the complete reversal from the I-526. So, it’s not without risk for the investors. I think there’s also a scenario where the project may be big or takes longer than two years to complete. It can be delayed. I mean we’ve seen a lot of delays post-COVID and there’s a very, very difficult real estate market right now.

It’s very hard to get financing. People aren’t transacting. And so there can also be a scenario where perhaps people want to replace the EB-5 money, maybe they took it, maybe it’s at a higher rate, rates will drop and there may be a problem with job creation at the I-526 stage in that kind of scenario, or even at the I-829 stage. And then you’re no longer a member of the NCE and you have to hope that the ownership of the project can help you resolve that issue. With the USCIS. I also really want to hone in that again: this is a USCIS policy, but from a corporate perspective, the offering documents will control. And so you have to as an investor, read them very carefully. You may see a two-year sustainment period, but there may be ability to extend the loan. And so that needs to be reviewed very carefully

Mike:
And I think that’s the key point here. So, both of those opinions are great and we’re going to be very interested to see exactly how USCIS follows through on this, and we agree with always being conservative. But since post-RIA—and really for most investors not subject to the Chinese backlog or the Indian backlog or the extent of I-526 delays—the repayment was never really controlled by this policy. It’s always tied to the offering of the project in that part of the structure, because even post-RIA, before this clarification, it was very clear even in the letter of the law: it was two years, and most people interpreted until two years after the Green Card was received. But that should still occur, especially in real-world deals much earlier than let’s say, an average five- or six-year loan term that you’ll see in EB-5 documents. So, we think this is an interesting development. It’s going to be interesting to follow to see how this goes, but most of the time what already governed it was the project itself and not this part of the policy—In terms of the earlier repayment.

Ron:
One of the interesting things is going to be to see what projects become available based on this. A lot of my investor clients want to invest in significant projects with experienced developers. And the projects I know are really not interested in two-year money. They don’t need that. They need four- or five-year money. So, what I think will likely happen is that there will continue to be many projects on the market where a lot of them are structured as EB-5 loans where there’ll be four-or five-year EB-5 loans, but that’s how long developers need the money to do a significant project. And then there’ll be smaller projects that are willing to take two-year money but are more likely to be maybe cash-strapped developers who are running out of money in the middle of a project, projects that have gone over budget and all of a sudden need some more short-term cash to finish distressed projects. Investors may end up having to decide: is it more important to be in a project that has a better chance of getting me the Green Card and getting my money back, or is it more important for me to be in a project where I have a chance, maybe even a fairly good chance, of getting my money back in two years or three years?

Ron:
Two years is not going to be two years, but maybe it would be three years or whatever.

Kate:
I think another important point to bring up here is that there’s also sort of a change to redeployment by the introduction of this policy guidance. The prior policy guidance for pre-RIA investors said that, basically, there’s two types of redeployment after the job creation is met and they had to keep the money at risk, so it’s invested in another project. The second type was redeployment before job creation is met. And it basically allowed conditional permanent residents to invest into a new project to get additional job creation credit if there was a shortfall in their project for whatever reason. Now it seems that the second part goes away, and it’s replaced with the concept of regional center termination proceedings, which we’re going to talk about. But what if you have a project that didn’t necessarily commit a bad act, it doesn’t need to be terminated, but it just didn’t create enough jobs. It seems that you may not be able to redeploy CPR status to get those additional jobs, which you could do under the previous USCIS policy manual. So that’s something else that we really will need clarity on.

Job Creation Considerations for EB-5 Investors

Sam:
Great. And we’re going to get into some of those timing issues that Ron mentioned a minute ago and the different choices that investors will have as the market reacts to this guidance. But before we get into some of the illustrative timelines of the impact of this, let’s talk about some of the… we touched on some of these job issues, but Ron, do you want to highlight which ones we haven’t touched on yet?

Ron:
Yeah, so as a practical matter, a developer needs a certain amount of money to move forward with construction. And so it may be that when the investor invests that money is not needed until 30 other investors invest. And so there may be a delay draw down and the start date of the two years does not start until the money actually is drawn down and goes to the job creating entity. I mentioned before that it’s very difficult to figure out job creation for each investor when a project is still ongoing. And a lot of these projects are three-year projects very often. So how do you determine at two years how much jobs have been created and allocated for each individual investor?

What if the jobs were created before the investor money went in, such as money that comes into replace bridge financing? The guidance memo doesn’t deal with that specifically. In many cases. If not, in most cases construction does not proceed like clockwork and there are construction delays; that’s not unusual. So if there are construction delays, that means that there are delays in the construction expenditures that trigger the job creation numbers. So construction delays delay the job creation, which delays the two years. These are just a few of the examples of the kinds of things that can happen that investors need to understand; what I don’t want is, investors in the past have gone to bright and shiny objects, this seems too good to be true and a lot of times it is too good to be true. Well this is not something where you’re going to get your money back in two years.

And I’m just giving you some of the examples of why that’s the case. Just so investors understand when they’re trying to decide what project to invest in, these are all issues that go into it. I’ll just mention one or two other things. Some projects accept money from investors on a staggered basis. In other words, some projects say you don’t have to invest $800,000 upfront before you file your I-526E petition. We’ll accept $500,000 now and $300,000 later or in three installments, or whatever. There are issues with that. But the point I’m making here is, well, when does the two year start? If you filed your EB-5 petition with $500,000, the guidance memo doesn’t answer that, but to me the answer is probably that the two years don’t start until you have completed the full amount of your $800,000 investment and the full amount has gone to the JCE and the full amount has been used for job creation.

Kate:
Ron, this brings up a lot of issues, right? Because I think everyone sort of has their own schedule when they do these staggered investments and probably regional centers that accept that type of model will need to take it into account and possibly push out everybody’s loan repayment date. It brings up a sort of new concept to put into the paperwork.

EB-5 Capital Redeployment Under the New Policies

Sam:
So, just to keep things moving, we’ll now shift gears a little bit and I think we’ll skip over this. So, this is a good visual illustration here of what the impact of this policy is when we compare post-RIA investors versus pre-RIA. And so, if we look at this chart, we can see here specifically USCIS policy with respect to when you could become eligible for repayment. For an investor pre-RIA, you’re waiting until you get the temporary Green Card, however long that takes, and then you’ve got two years after that until your investment can be returned. And then we contrast that with investors post-RIA below however long it takes to create the jobs and meet all those requirements that we just talked about with Ron and Kate.

And here we can say: theoretically if you actually did meet all those requirements, and if that did happen even before you even got the temporary Green Card, then that would theoretically be allowed, right? And so visually, just to give you an illustration of how that would look, when we look at investors who came in before March 2022 versus those investors after March 2022… pre-RIA, you still have to maintain your investment during that two-year conditional residency period. And so, no change there, but post-RIA, the real critical change here is that there’s likely not going to be a scenario that’s going to require redeployment. So, if the first project that you invested in creates the jobs and your money’s at risk for at least the two years, even if your money ends up being at risk for four or five years due to construction delay or the loan term was five years, even though jobs were created earlier, there’s no need to keep the capital invested and at risk that’s linked to you getting the Green Card.

That’s really the overarching key. So, no matter how long it takes to get the Green Card in your hand, as long as the first project you pick creates the jobs you need and your money’s invested for at least two years, there’s no need for your money to go to a second unknown project to satisfy the USCIS requirements. That’s really important, and we will get into some more illustrations on that a little bit later in the presentation. But Kate, on this topic from the regional center perspective (Ron talked a little bit earlier about from the investor perspective), why don’t you give us an overview of how you see that happening for regional centers in terms of project selection and redeployment, keeping in mind that this guidance may be short-lived.

So, Ron spoke a little bit earlier about some of the key impacts for investors and what investors should be concerned about before deciding on a project. But from the regional center perspective in terms of selecting projects, structuring new projects, what do regional centers need to be thinking about with this potential guidance out there that may be short-lived, may not end up becoming permanent?

Kate:
Well, having worked for close to two decades on structuring EB-5 projects, there’s very few that can use money just for two years, especially large projects. And this will really have an impact on them because how marketable are they going to be if they don’t do the two years; investors may prefer a shorter investment period. Of course, people want to keep money in their pocket rather than invested, but will that sort of create a disbalance with investing in riskier projects? Will that take better quality, safer projects that may have a little bit of a longer time period off the market? So for me, that’s the biggest question here. Is it going to bring a bunch of projects that may not be feasible to the market that may create risks in term of job creation? Maybe they have a two-year repayment schedule, but overall they’re riskier in terms of quality for the investor.

Sam:
Got it. And Ron, do you want to touch on the redeployment concept?

Ron:
Well, in most cases there shouldn’t be a need for redeployment. Now, redeployment was premised upon the fact that I’m talking about; there shouldn’t be a need for redeployment for post-RIA investors. Redeployment was premised on the idea that the money had to be sustained at risk through the end of the two-year conditional residence period, which for various investors could be anywhere from five to 20 years. And it’s not like regional centers wanted to do this. It was required in order to protect the investors to redeploy that money. If this guidance memo becomes the law and is not shot down by the courts and the immigration service doesn’t change their mind, then redeployment for post-RIA investors in most cases should not be required. And I think that’s, as far as my investors, I think one of their biggest issues. I think the issue was less: well, my money is going to be outstanding for four or five years more. Their concern was: I chose to invest in project A and all of a sudden I’m finding my money is redeployed to projects B and C. I think it may well be that the money won’t be redeployed, but many investors will still choose to invest in projects that are four or five year loans because those may end up being the most secure projects and will probably be the types of projects that will be sponsored by the most successful regional centers.

Sam:
Got it. Got it. That’s very helpful. And Kate, I know you talked about the requirements of the investment timeline based on the corporate documents. Can you quickly talk about that in the context of the USCIS requirement with respect to how long capital must remain invested?

Kate:
So, what USCIS is saying is, it has to be invested for two years from the moment it’s available to the JCE, but it doesn’t limit how long. So this is what I’m saying: in probability, we’re probably going to see longer investment time periods or we may see something marketed as a two-year investment with the option of three one-year extensions or one three-year extension because they have to get the project completed. Remember, we still need to create the jobs, and construction often runs into delays. There may be permit delays, there may be delays in getting other financing, a whole host of reasons. And so two years is a very tight timeframe. Will we see projects longer than five years, like we have in the market now, because of the pre-RIA requirements? That I don’t know. I think that remains to be seen and it remains to be seen if they question and if this guidance is litigated or even reversed.

Sam:
Got it, got it.

Kate:
As a lawyer, I need to add another caution, which is that the regulation…. and again, the regulation is the law; policy guidance is not the law. The regulation still says that the investment must be sustained through the two years of conditional residence. The immigration service has not so far chosen to get rid of that regulation. The RIA does not talk about when it says the investment, the intent must be that the investment will last at least two years. It does not talk about sustainment. So, there are all sorts of issues here, and I’m so concerned that my investor clients are going to get caught in a trap because there are a lot of things that are still not clear here.

Sam:
Got it. And so, it’s definitely an issue to have a client jump into a project that’s promising a really short two- to three-year investment period and then they put the money in, a year goes by, this gets challenged and successfully overturned or USCIS just decides unilaterally, oh no, we made a mistake, we’re changing that. And then all of a sudden now that investor, even if they get the money back on time and they get repaid, then that could be a disqualifying event and could be catastrophic from an immigration eligibility perspective. So, it’s really important to consider what’s most important and what level of immigration risk you’re willing to absorb, because this is definitely uncharted territory.

So, another visual aid. The top half of this slide talks about what we were thinking about before this clarification happened, and the bottom half shows the timeline for after. And again, this is for illustrative purposes only, but when we look at this new policy, when we look at the impact it has specifically for investors who are considering rural projects… and remember, those investors already benefit from a shorter timeline with faster processing and access to the visa set aside. So if we look at the top half in yellow here, so before October 11th, the eligibility for investor to get their funds back was based on some period of processing time. Then they get the temporary Green Card, then after they’ve held the Green Card for two years, they become eligible under USCIS rules to get the money back. And now after this guidance, assuming this guidance is not challenged and is not reversed, then we can see here, well if the money really goes in for two years and we meet all those requirements and it’s not reversed and several other ifs…. then theoretically you’ve got an investor getting the Green Card and only holding it for a short period of time, less than two years, and then becoming eligible for repayment.

So, when we look at the delta here, well what does that really mean in red here? We say, well that really means an investor is eligible under USCIS policy, if this stands up, to get their money back approximately a year earlier. But when we look at the bottom here, the EB-5 project loan term, and as Ron and Kate pointed out earlier in the webinar, most large real estate projects (which most EB-5 projects are) are 4-, 6-, 7-year developments, and they don’t really have a need for two- to three-year capital. It takes a long time to get permits, there can be delays, et cetera. And so, looking back over the last 30 years, the vast majority of EB-5 projects have been loans and average term of the loan is about five years. And so if we look at that as continuing as a five-year loan term, that’s the earliest point at which funds could be repaid from the corporate side under the offering documents of the project.

And so, to Kate’s point earlier, no matter if it takes two years, three years or four years, and no matter what happens with this policy, it’s going to be the later of. So, even if you’re eligible under USCIS rules to get the money back in year two, three or four, if you’ve decided to go in a large project with lots of jobs created, a very safe traditional five-year loan project, then the five-year term is going to govern the repayment of your money. And so, it doesn’t really matter if you’re eligible under USCIS policy to get repaid in your two, three or four. Sure, earlier is better but it’s going to be the later of. And so, this is kind of a good visual representation of that delta to keep in mind. And then, here on the next slide, we’ve got the same illustration, but looking at this comparing non-rural investors (we won’t spend a lot of time on this, but just to kind of illustrate that again with the same loan term requirement).

Alright, now we’ll shift over to the other major topic of the guidance that came out, which is terminated regional centers. Ron, do you want to walk us through this and give us some high-level context to start out with about the RIA and some of those protections and now how USCIS is now going to interpret that for pre-RIA investors as well?

New Guidance on Regional Center Terminations

Ron:
Sure. So, I’m actually much more excited about this than the two-year issue for the reasons we’ve discussed. This is really important and a good move by the immigration service. So what are we talking about? We’re talking about: traditionally the immigration service has taken the position that if a regional center is terminated, that is considered a material change and can result in all investors in a project sponsored by the regional center not being able to complete the Green Card process and having to start all over again. I’ve always thought that was wrong, but that has been their position. The RIA said that, well if you’re a good faith investor, you’ve done nothing wrong and your regional center is terminated, you have the ability within 180 days to find a different regional center to sponsor the project and your case can go forward. That’s a big step forward.

That’s a very good thing. However, the RIA was not clear on whether that applies to pre-RIA investors, and the immigration service guidance says yes, it does. Well that’s a big deal. So if you’re in a regional center that’s terminated and you invested five years ago, you no longer have to start all over again, according to this guidance memo. The guidance the RIA talks about not just terminated regional centers but also NCEs or JCEs that are…. the word they use is debarred; the immigration service has not yet come out with regulations for debarment. The guidance memo does not mention if this guidance applies to debarment. However, a Q&A posted on the USCIS website does say that it applies to debarment. That’s a very good thing. Now why is this such a big deal?

It’s such a big deal because there are many of the 630 regional centers that are not going to be doing what regional centers need to do under the RIA. They’re not paying the integrity fee. They’re not filing the I-956 regional center designation application form. Maybe they’re not filing the annual statement. And these are situations where previously if the regional center didn’t do that, all of their investors would lose out. This guidance says that if the sole reason that a regional center is terminated is what they call administrative non-compliance (not paying the integrity fee, not filing I-956), that the immigration service (and the word they use in the guidance memo is may) may decide that it’s not a material change and therefore the investors do not even have to affiliate with a different regional center at all. And that’s a very good thing because there will probably be a lot of regional centers that do not do what’s necessary to stay active under the RIA but want to continue to protect their pre-RIA investors. So, this is all a good thing. The biggest problem I have is that when you read the guidance memo, everything talks about the immigration service may decide this and may approve that. And if I’m an investor, I’d like something more than a may. And that raises the issue that Kate also raised of why it’s so critical that we have regulations on all this stuff and not just guidance memos.

Kate:
Yeah, Ron, your point, there’s no procedure outlined. How do we do this? I mean basically they’ve taken the pre-Behring litigation position that if your RC is terminated and you were approvable, we’ll still approve you even if you don’t have an RC for the pre-RIA investors. For the post-RIA investors, if we look at the Form I-526E, there is an option to file an amended I-526 E. So, is that what we have to do? It’s not clear; they haven’t explained it. And you’re right, we need regulations, but at least we need a more fulsome or an additional guidance memo issue to tell us, well how do we take advantage of this? And I also would like to see what happens if an NCE or a JCE is debarred. I want more clarity on that. It’s simply not in this guidance.

Ron:
Yeah. One of the problems Kate, as you know, is that the law says, if you’re a good-faith investor in a debarred NCE or JCE, you get all sorts of benefits. But the immigration service has not yet figured out what their procedure is to debar. Do you file for something? Do you request it? Is there a form? What are the standards for debarment? And we’re now a year and a half past the RIA and there’s still no procedure set up for debarment; without the debarment investors aren’t protected.

Kate:
This is a great issue. It’s one we’re dealing with right now because we’ve been asked to respond to a series of denials where the project absconded with the funds. So what do these investors do? Do we write a letter to USCIS? There’s no notification procedure, it’s being dealt with by law enforcement. It’s out there, the person is under FBI investigation. But we need guidance. We need practical guidance on the steps that we need to take to protect our investors.

Sam:
And on that point, Ron, from a litigation perspective, one scenario I can see here as well: some regional centers, they see this guidance. They act, they say, “Okay, great. We’re closing up shop, we’re shutting down our regional center, we don’t want to do anything else anymore. We’re not filing anything else. Our investors are going to be safe. All we have to do is just disappear. We never did anything wrong, but we just want to shut it down and not continue.” And so they do that and then the government, because they published this quote in May… what if they choose to actually not affirmatively consider that not a material change? How could there be litigation and what are your thoughts on that in terms of investors who didn’t do anything wrong, but then the regional center…

Ron:
We’ve always been prepared to litigate the issue of whether a termination of a regional center is a material change. I’ve always believed and advocated and written that it is not, and in the right case, we were always prepared to litigate that. So, I think the immigration service got it right with this guidance memo and this point except the maze should be shall, not something that’s optional. And if the immigration service in a particular case takes a position contrary to this, we would certainly be prepared to litigate it and I think we would have a reasonably good chance of being successful.

And I think there will also be litigation on the idea that there are plenty of good-faith investors who right now should be able to take advantage of the good-faith investor provisions because they have NCEs or JCEs that may have been engaged in fraud, may have done something wrong—but there’s no procedure to debar them, and therefore there’s no procedure for them to get the benefits of the RIA. I expect that there will be litigation on that point.

Sam:
Got it, got it. Okay, that makes sense. So, what could happen from here? So, we have been talking about litigation likelihood of success. Kate, what are your thoughts on these two items? And then we will move on to new ground.

Kate:
I think it’s very likely that we’re going to see litigation, and I think just the application of the policy guidance itself is very interesting. We’re going to apply the regional center termination provisions to both post-RIA and pre-RIA investors, but we’re going to take the sustainment provisions and we’re just going to apply them to post-RIA investor provisions. And so there’s a lot of issues that come up just in the policy guidance itself that I have issues with. Ron is absolutely right about the regulations pre-RIA still being effective. So, I think it’s very likely that we’ll see a litigation, and I think there’s a reasonable chance that it will be successful. Or you may have a case where USCIS gets enough pressure, gets enough comments on the policy guidance and pulls it back. They’ve done that in the past.

EB5AN’s Twin Lakes Georgia Project

Sam:
Got it. So now, we’re going to shift gears. We’ll chat for a few minutes about EB5AN’s Twin Lakes rural EB-5 project and then we’ll share some of our preliminary insights and predictions and hear some more from Ron and Kate about how this could shake out if it ends up surviving litigation and actually remaining permanent policy. So, a little bit about our Twin Lakes Georgia rural EB-5 loan project. It’s a single-family home community, 55 and up, just outside of Atlanta, Georgia. It’s being developed by the Kolter Group, one of the largest private developers in the Southeast. We’ve worked with Kolter over the last 10 years on 15 projects. This particular project is 1,300 homes, over 500 homes, already sold, 400 already built, project rates almost 7,000 jobs in total. It is located in a rural TEA, so it qualifies for the faster processing and 20% visa set aside and has already created more than 2,000 jobs as of June of 2023. This is a little map tile grid showing all our past projects with Kolter over the years. All of these have either been approved with all jobs created or are pending approval.

One of the neat things about this particular project is it’s a Cresswind-branded active adult community. Kolter has complete ownership and control of the Cresswind brand and they’ve been developing large single family, multi-home communities around the Southeastern United States following the same model. And so this particular project, Cresswind Georgia at Twin Lakes on the center there in green, is one of 13 of these communities that have been fantastically successful across the southeast. So a very proven established business model. And as many of you know under the RIA, one of the benefits for investors already in the US on H-1B, E-2, F-1, [or] L-1 is concurrent filing. So, investors who are in the US can obtain a work permit in just a few months.

A travel permit (advanced parole) takes a little bit longer, but we have seen some approvals for both in just a few months. There’s lots of information on this in webinars and material on our website for you to check out. This particular project features three unique safety features, three guarantees from one of Kolter’s parent holding companies: a repayment guarantee to secure the repayment of the funds, an I-526E approval refund guarantee (which provides for accelerated repayment of funds if an I-526E petition’s not approved for any reason), as well as a job creation guarantee. One other recent development with the project has been very strong sales, despite rising interest rates over the last 12 months. Many projects have seen slowdowns in sales. The Twin Lakes project has actually seen more sales because the majority of the buyers are seniors 55 and up. And that’s the wealthiest segment of the US and many of the buyers, over 60%, are buying with all cash.

And so, when we look at home sale performance in this market, we can see that Kolter has by far sold the most homes. And just a couple of months ago, Warren Buffett invested almost a billion dollars in two of Kolter’s largest competitors’ public companies. Kolter is private. I’m sure Warren would’ve liked to have invested in Kolter, but unfortunately they’re private. But this recent investment is just kind of another independent verification of the investment thesis that with rising interest rates, which are causing a lot of homeowners that have locked in a mortgage years ago at a low rate, if they sold their home today, they’d have to get a new mortgage at a much higher rate, 6%, 7%, 8%. And obviously that’s not very attractive when they’re only paying 2% or 3% or 4%. And so that means they’re not selling their home anytime soon. But for people who want to buy new homes, that means there’s a shortage of new homes available. And so there’s a lot of demand for new homes. And the only homes that are coming to market are those being built by a lot of these big developers. A lot of these home developers, including Kolter.

One thing we always encourage investors to do is kick the tires, go see a project in person. You can always get a really good sense of what’s happening better on the ground, but many of investors are overseas and may not be able to come get a visa, et cetera and visit the project very easily. So, we developed a new virtual driving tour of the project that you can access on our website and get a really good feeling for what it is like to tour the project in person. Here are some recent construction photos so you can see a lot of the completed homes and then new sections under development there, a few more pictures. And also on our site we’ve got a bunch of investor testimonials so you can watch videos, read transcriptions, see why other investors picked this project over others recently. Alright, so now preliminary insights. Mike, do you want to jump in and share some of these with us as we go through, and then we’ll hear from Ron and Kate as well?

Risks for Two-Year EB-5 Repayment Terms

Mike:
Yeah, and we really appreciate everybody spending the time. I know it’s been a longer webinar at over an hour now, but even going through all of the immigration aspects of this, I think just stepping back, it’s important to look at it the way that we do. So, our job as EB5AN is defined by those projects that have the highest chance of getting our investors their Green Cards and getting them their money back. So historically, our focus has always been on deals that were fully capitalized, which means that they have all the money that they need to build the project, have already started construction, are fully permitted and entitled and didn’t have execution risk—or we worked to minimize execution risk as much as possible. But what that means is that this money, it’s only valuable to those developers if it’s really cheap and it can stay in the project for a long time.

They don’t need the money. It’s pure capital arbitrage. And we’ve always believed that that was the proper use of EB-5 to get our investors what they want, which is the Green Card and the money back. Now putting this hat on, let’s say that everything in these policies holds true and this becomes the letter of the law in the future. I think what will likely happen is, as Ron mentioned, you will see a lot of projects that don’t have access to capital out there advertising really short investment timeframes to get the money back in two or three years. And some of them will likely work in that the project gets built and investors get their money back quickly and others won’t find all the money and just won’t happen. So, we think that this does create an opportunity for some of those deals that historically we would not have seen as attractive at all: such as pre-construction and pre-development deals where there haven’t been jobs created and not all of the money’s in place.

You could find some good deals that fall into that category that maybe have a three- to four-year timeframe instead of that typical five- to six-year timeframe. So I do think that you are going to see some new good projects come to market that could be just pre-development. So, you have to know that you’re taking more execution risk. But the trade-off is that it could have a relatively shorter timeframe, but my hunch is that the bulk of EB-5 deals will stay the same, where this is a capital arbitrage play and it’s being utilized by larger developers with A-plus projects where the money is going to be held for longer than the absolute statutory minimum of the program. And that’s even been the case since the passage of the RIA, where nearly all the deals that we see in the market that are being successful and actually being constructed do have longer investment timeframes than what the RIA would’ve implied for how early investors would’ve been eligible for repayment. So, that’s our initial thinking on this. And of course, we’re going to visit projects that could meet the criteria of repaying faster, but we’re never going to sacrifice our key diligence of making sure that our investors get their Green Cards and their money back.

Sam:
And one thing (without going through every one of these bullets) I want to talk a little bit more about is the last one here: that EB-5 comes in tranches over an extended period of time. If a project’s looking for $40 million, that’s 50 people. All 50 people aren’t going to decide to invest and fund on one day. So, any EB-5 project that’s more than just a couple investors has to be flexible and willing to deal with this kind of timing, amount unknown. To raise capital, you could have three investors sign up in one month and then no investors for a few months and then another investor comes in. So, for a project to be able to accept that unknown amount, timing, it typically has to be a fairly large project with a lot of ongoing spending that can absorb large amounts of money coming in at unknown times and also, just given the increased cost, we’re going to see filing fees increased next year.

Legal costs, structuring costs, are only getting more expensive compliance. Working with immigration counsel to make sure that all the compliance is done correctly on the regional center every year, annual filing fees… all those expenses all add up to projects costing more. And so, to shoulder all of those costs, there’s got to be benefits for a developer to be willing to spend several hundred thousand dollars upfront to structure their project, get everything set up; they’ve got to realize enough of a benefit to make their project being EB-5 compliant be worth it. Right. And typically a project like that doesn’t need money for a short period of time. Ron, Kate, what are your thoughts on this?

Ron:
Yeah, I agree with what you said. I think the way I would summarize where we are is that with our clients, traditionally they have looked at two things. Number one is, if I invest in this project, what’s the likelihood of my getting my Green Card and getting both my conditional Green Card, my permanent Green Card? Number two, what’s the likelihood of my getting my money back at some point? There’s two, we are part of that equation. We can certainly advise our clients what we think are good projects for purposes of chances of getting your Green Card. We always advise our clients that they should have another professional advising them on the financial risks of the project, and the chances of them getting their money back. When they’re going to get their money back requires another professional. I don’t think that’s likely to change for most investors.

Ron:
I don’t think that the result of this is going to be that investors are going to say, well, more important than the chances getting the Green Card, more important than the chances of getting my money back, is how quickly this can happen. I don’t doubt that there will be projects on the market that will be pushing the fact that, well, we’re a two-year project and there’ll probably be some investors interested in that, but I expect that most of the major regional centers, most of the major developers, will continue to structure projects very similarly to the way they did before. That doesn’t mean that the money is going to have to be outstanding for 10 years or 8 years or 20 years, but I do expect that the money will likely continue to be outstanding on those projects for at least 4 or 5 years and that those projects will still command a high percentage of the marketplace.

Sam:
Got it. Kate, what do you think?

Kate:
I agree with both you and Ron. I also understand where USCIS is going, and I think there is a lot of uncertainty that pre-RIA investors went through and are still going through with knowing how long their funds are invested. And so, I understand why they’re trying to give this interpretation, but again, we have to weigh it against the business reality; that’s very important. I do hope that they’re going to take comments that we’re making, that other groups are making, into account and provide more specificity in their guidance so that there’s more concrete steps and explanations going forward on how to apply it and what we should do. In the cases that we brought up, what if there’s not enough job creation? Now, there seems to be no need for redeployment if the project is successful, but what happens in the example I gave earlier? So, those things need to be addressed.

Sam:
Got it. Mike, do you want to come back in and talk to us a little bit about safety, both in terms of immigration risk and financial risk and what we think the landscape will look like in terms of investors picking between the more traditional current types of projects and what we think will pop up and potentially lure some investors (towards)?

Mike:
Yeah, absolutely, and I’d say that, generally, when we’re thinking of these investments, if the risk profile is linear, we want to go as far out as we can under the lower risk, both as we’ve been talking about on execution. So, we want deals that have already started with all the money in place, so we know the jobs will happen. Those are the deals that have typically been underwritten by large banks, by other equity investors, and have everything in place where you still need the plan to be successful, but everything is well lined up for the success of the project to get investors their money back. My best guess of what’s going to happen here is: you’re going to see developers and sponsors start going much further back on that risk curve, more towards the equity side of the deals. Even if they don’t call it equity, they’re going to start trying to structure deals that are pre-construction without all the money in place that hasn’t been underwritten by banks.

Mike:
And I’m specifically talking about real estate deals where, even if they call it a loan into a deal, you might end up running into a situation where it’s actually playing that equity role in that type of risk profile, which could get you that shorter investment timeframe because not everything else is in place and the money is actually really valuable to the developer because it replaces the cost of their equity. So, I think that that is one thing that you are going to start seeing on more of the traditional real estate deals. Now, post-RIA, we’ve actually seen more operational businesses pop up: manufacturing energy, things like that, that are not traditional real estate for underwriting. So you’re taking more of that operational risk and business risk. Those I imagine will continue to pop up—and maybe even more of those where they’re trying to promise a two- or three-year investment payback.

Mike:
But again, you’re going to be looking at that where it’s much more of that equity style of investment just without the equity returns to investors. So, the benefit is that if it all works, you will likely get the money back sooner than a five-year loan, but if it doesn’t work, your Green Card and your money would be in jeopardy. So, I really don’t think it changes the landscape all that much because those deals have always been there, even some of them promising higher returns. I think it is much more of the investor putting the hat on and focusing: what do you care about most? And for larger deals that take many years to get going and hundreds and hundreds of millions to be put in place, EB-5 is always going to be longer-term capital in those projects. For smaller deals where if it’s only a $10 million deal, maybe if five investors come together, that actually makes the deal happen. But if the five investors aren’t there, the deal doesn’t happen. I think you are going to see more of those with the developers or sponsors promising that fast return on the smaller deals that are just a little bit different of a risk profile that investors need to evaluate. Not that there’s one right or wrong, but it definitely matters what the priorities are for those investors.

Mitigating EB-5 Investment Risk

Sam:
So, before we get to investor priorities, and we’ve got a little chart framework to wrap up with. These are some kind of general takeaways that I think are important to cover. So in general, even if these clarifications guidance do actually survive likely future litigation and become implemented, we don’t think they really impact the investment timeline for most new strong projects that have really been carefully structured to mitigate both immigration and financial risk. As Mike mentioned, the best projects are those that don’t need EB-5 capital to be successful. They’re already under construction, they’ve created lots of jobs and projects like that just don’t have a need for two-to three-year EB-5 money. It’s that simple. Some general maxims to keep in mind for investors considering new projects going forward. As Ron mentioned earlier, if it sounds too good to be true, it likely isn’t true.

Sam:
Do your diligence. Second, and I’ve said this on a number of prior webinars, but can’t say it enough, focus on underlying business success. It sounds simple and it is. Just thinking big picture here. If you invest in a project where the underlying business activity—whether it’s selling homes or manufacturing solar panels or manufacturing some other product—if that underlying business activity is successful and profitable during the time your money’s in the deal, you’re going to likely create the required number of jobs you need. The project’s going to be spending the money, you’re going to be generating revenue, money is going to be spent, jobs are going to be created, and they’re profitable. So, that means they must have enough money to pay you back, generally speaking. So, if you can do that, if you can pick a project where the underlying activity is successful, then you’re likely going to solve all of your problems.

Sam:
You’re going to get the Green Card and you’re going to get your money back in a timely manner. And the flip side of that is if you don’t understand or are not confident in a project’s business model being profitable, then you should avoid it. You want to at least understand what you’re investing in and feel confident that, I’ve done my research on this, I think this is going to be successful and be profitable. And then third, do your research. Use common sense; ask questions. No question is too small. We have some investors that join our projects that send over a list, four or five, six pages of questions, and we welcome that. We’re happy to provide responses in writing so that everything is clear. We get other investors who just have two or three questions. So it varies. There is no stupid question. Second, visit the project, just go see it in person.

Sam:
If you’re in the US, that’s fairly easy. If you’re out of the US, that can take some coordination. We’ve signed visa invitation letters for a lot of investors in the past. We can definitely arrange for an in-person visit. And then again, next review the financial statements. Financial statements are not required by USCIS to be shared with investors or to be submitted. However (and Ron can tell you he’s an accounting background), financial statements are very important before making any investment; almost no experienced investor on the planet would invest in an ongoing business without reviewing their financial statements. And an EB-5 investor should do the same. This is a large amount of capital. And so, having an idea of the financial picture of the companies that are involved, where your money’s going is critical. And if the project’s not willing to share the financial statements, that’s probably not a good sign.

Sam:
Or if they share the statements and they look terrible, the project’s losing money and liability significantly outweigh member equity, et cetera, then that’s probably also not a good sign either. So ask questions and review the financials. And then again, common sense. If a project’s already profitable and making money, the likelihood that it will continue to do so after your investment is much higher than in a project that has no revenue and is not profitable and can only offer you a projection of what they think the project’s going to do after you invest. Just one in the hand is worth several in the bush. Mike, any comments on this before we move over to the framework?

Mike:
No, I think that that’s great.

Concluding Thoughts

Sam:
Before we wrap up and hear from Ron and Kate with some concluding thoughts, this is kind of a short framework for investors to consider to help evaluate and get more information on both the immigration and financial aspects of a project. So first, once you’ve decided to make an EB-5 investment, you want to spend time thinking through: what do you want to prioritize based on your situation? There’s no right or wrong answer. Every investor’s situation is going to be slightly unique. So sit down, really think through based on your situation, what matters most to you and why. And then select a project that best fits your target criteria. And below these are kind of eight key factors to consider. So, starting with immigration on the left, temporary Green Card speed. And so the question there is: do you want to do a rural project with faster processing versus non-rural? How quickly are you going to get that temporary Green Card in your hand? Then second, temporary Green Card approval.

Sam:
Is the project going to qualify for EB-5 and have you selected an experienced EB-5 attorney to prepare your source of funds? Right? Those are the two pieces required for you to get your I-526E approved and to get your temporary Green Card. Then job creation. So, to get the permanent Green Card, you’ve got to create the jobs. So, if the project hasn’t created 10 jobs already for you, what’s the likelihood that it’s going to create those jobs in the future after you invest? And then regional center compliance. How experienced is the regional center and the developer executing on this same type of project? How many projects has the regional center done? How many projects like this has the developer successfully executed on in the past? Have they ever not repaid a loan? Have they ever not finished a project? Those are key questions that you want to know with respect to compliance and track record, right?

Sam:
And then on the financial side, the investment period: how long is the money going to be invested in the project? What’s the loan term? And any extensions? Then loss of principal investment: what’s the risk or odds of the borrower defaulting on the loan? And for that, you really just need to look at the borrower track record. How much debt has that borrower (or that group of companies), how much have they borrowed and successfully repaid over how many projects and over what period of time? It’s much different to look at a project where they’ve done two prior projects and they repaid one loan and the other loan is still outstanding, versus a project that’s being developed by a large company that’s done hundreds of projects, repaid billions and has never not repaid a loan in a very long period of time. So, those are key questions to look at.

Sam:
And then the timely return of capital. So, is the loan going to get repaid on time? Has the developer ever not repaid on time? That’s the number one question. And two is avoiding conflicts. If your funds are going to a project that’s being managed by the developer, and the developer’s on both sides, well then the developer could easily extend the loan and you wouldn’t be able to stop it. So, independence is key with timely return of capital. And then lastly, return on investment. What return is being promised to you each year and how likelihood, how is that likely to happen? We could promise an investor they’re going to get a 15% return if X, Y, and Z happen, but those conditions may be very unrealistic. And so it doesn’t matter how much of a return is promised because that’s just not going to become a reality under pretty much any circumstance.

Sam:
So again, just zooming back, these are some of the key factors to consider when evaluating projects. And as Ron and Kate, I’m sure, will jump in a second and tell you, you’re not going to be able to get exactly what you want on every one of these. That project doesn’t exist. And as I’m sure they know, there’s a very famous saying in the legal business: do you want it fast? Do you want it cheap? And do you want it correct? Well, as a buyer, I want all three. I want it fast, I want it cheap, and I want it correct. Well, guess what? You can only pick two, right? If it’s going to be fast and cheap, it’s not going to be correct. Or if you want it cheap and correct, it’s not going to be fast, right? Same general concept can be applied here, right?

Sam:
There’s a number of different factors here, and you’ve just got to really think through: why am I making this investment? What matters most to me? And then how do I pick that project that gives me the best chance of identifying and having those few items I’ve zeroed in on as being the ones I care about the most actually happening? Because everything is going to be promised, not guaranteed. An EB-5 investment is completely at risk; repayment is not guaranteed. Everything that’s going to be presented to you is going to be in a best-case scenario. And so you’ve got to really pick the project that you think has the best chance of those things actually coming to fruition. And with that, Ron, do you want to jump in and share your thoughts on this and then Kate as well?

Ron:
Sure. So, first of all, Mike and Sam, thank you very much for inviting us to speak today. It’s a very important topic and it’s good that you got on it right away and created this webinar. So, thank you. I guess what I would conclude is saying that there’s a lot of good stuff in this immigration service guidance memo. It’ll be, but until it actually becomes the law and until they actually promulgate a regulation, it’s not going to be as valuable as it eventually might be. I think that what were good projects before this guidance memo will still be good and popular projects going forward—because I think that most investors will still be interested in the quality of the project, the chances they’re going to get their Green Card, and the least risk as opposed to the quickest. As it’s always been, but maybe more important now than ever, it’s important to consult the EB-5 immigration lawyer that you trust to evaluate all this and give you guidance before you invest in a project. So, that’s my concluding thoughts.

Kate:
I also want to thank you for having me, and it’s always a pleasure to speak with Ron. I agree with everything you said. I don’t think there’s anything else I can add. There’s a lot of factors that investors need to consider. This is an important decision. It’s not just financial, it’s the immigration and it’s one that needs to be made carefully. I appreciate the spirit of the policy guidance and we’ll keep providing information on what happens next in practical application.

Sam:
Great, great. Thank you both so much for taking time. And I put up on the screen here the contact details for both Ron’s firm and Kate’s firm. If any investors are interested in getting more details about pursuing an EB-5 investment application and going through the source of funds process, we didn’t really spend any time at all on source of funds.

But some quick 30 seconds: when you do an investment in any EB-5 project, before you can make that investment, you have to document your source of funds. So you have to show the US government how you earned your investment funds and how they’ve accumulated in your possession before they’re invested. And that process typically takes a significant amount of time. Records translation may be needed, and so it’s really critical to work with an experienced EB-5 immigration attorney that’s done a lot of cases over an extended period of time. And Ron and Kate are absolutely leaders in that space. And so, if you are considering making an EB-5 investment in the future, I would strongly recommend both of them to chat with about your case documents, timing, all of that. You are going to need to work with an experienced attorney to make sure that aspect of your application gets completed successfully and there aren’t any delays, hiccups, all of that. And so that’s important to note. Mike, any concluding final thoughts before we wrap up?

Mike:
No, just really appreciate everybody’s time. That’s it. Kate and Ron, you’re experts, thank you again for providing guidance here. And again, we’re always here to answer questions. Specifically, we focus on the project and structuring side, and we’ll always have high quality EB-5 projects available for investors that want to move forward. So thanks again.