How to Get a Green Card Through Investment in Real Estate

Do you want a Green Card so you can live and work in the United States?

You’ve probably heard that you can do this by investing in real estate. The initiative that allows this is called the EB-5 Immigrant Investor Program. It provides lawful permanent resident status to foreign investors who make qualifying investments in the United States.

In this article, we’ll explain what you need to know about investing in U.S. real estate to receive a Green Card.

What Is the EB-5 Immigrant Investor Program?

In 1990, Congress created the EB-5 program to stimulate the U.S. economy and create jobs for American workers via foreign investment. In return, foreign investors can receive an EB-5 visa. This is an immigrant visa that allows them and their eligible family members to become lawful permanent residents of the United States. They can live and work anywhere in the country and can also apply for U.S. citizenship later on.

The EB-5 program is one of the most reliable and straightforward paths to lawful permanent residency in the United States. Thanks to the EB-5 Reform and Integrity Act of 2022 (RIA), it’s also easier and safer than ever to participate in the EB-5 program.

Real Estate: The Ideal EB-5 Investment

Real estate projects make great EB-5 investments. Regional centers often use them for EB-5 investment opportunities.

These are some of the reasons why.

Attractive for Developers

Real estate project developers like EB-5 investment capital because it’s an alternative source of financing. They are unsecured, short-term, low-interest loans. EB-5 funds are far less expensive than conventional loans.

Clear Returns on Investment

Real estate usually provides reliable and predictable returns on investment. It’s easier to estimate costs, sales values, and time frames with real estate than with some other investment choices.

Inflation Poses Less Risk

Inflation is a potential problem for EB-5 investors.

They invest a significant sum for several years. If inflation jumps during this period, the real value of their money may decline.

However, the value of the real estate market tends to outstrip inflation. Real estate investments have a track record of being a good inflation hedge against losses in the U.S. dollar. Inflation spikes present less of a risk of loss to the investor.

Tangible Assets

Real estate is a tangible asset, so an individual can physically see construction progress if they make a traditional real estate investment. That’s not the case with stocks or bonds.

Key Decisions When Investing in Real Estate Through the EB-5 Program

Direct vs. Regional Center Investing

Each EB-5 investor must decide whether to invest in a new commercial enterprise (NCE) directly or via a regional center. The vast majority of EB-5 applicants choose the regional center path.

Let’s explore the pros and cons of each.

Direct Investing

Direct investment is the right choice for a small percentage of EB-5 applicants.

If you have a long record of success in business, want to retain control over an EB-5 project, and have the time to actively manage it, this route may be a good fit for you.

Here are the potential advantages of making a direct investment.

Direct Investment Pros

• Greater Profits Are Possible: A direct investor might keep more of their financial returns because a direct project must have only one EB-5 investor. They can choose to invest in higher-risk projects that have the potential to yield better profits. Direct investors also do not have to pay regional center fees, which are usually about $60,000.
• Total Control: The investor determines the project’s organization, management, and how resources are spent.

However, there are some big potential drawbacks under this approach.

Direct Investment Cons

• Higher Risk: Making a direct investment means taking on increased risk regarding the funds and immigration timeline. In addition, a direct investor won’t be able to rely on a support staff of EB-5 experts to help anticipate, prevent, or mitigate any mistakes.
• Greater Demands and Restrictions: A direct investment project requires active, “hands-on” management from the investor. This generally requires the investor to live near the project’s address.
• Harder to Meet Job Creation Requirements: Only the jobs that the project created directly can be counted. This makes it more difficult to fulfill the EB-5 program’s requirement to create 10 full-time positions. In addition, the investor will have to show proof that every job they claimed was established.

Regional Center Investing

About 95% of EB-5 applicants select the regional center investment model.

The United States Citizenship and Immigration Services (USCIS) has approved regional centers to administer EB-5 projects. Each regional center is an existing business that is subject to USCIS oversight.

A regional center operates inside a specific geographic area. It sponsors projects that create jobs within these areas.

Multiple investors fund each regional center project. So regional centers usually support bigger projects that have a greater regional economic impact than direct investors.

Here are the potential advantages of making a regional center investment.

Regional Center Investment Pros

• Lower Overall Risk: Experienced regional center EB-5 projects usually involve lower financial and immigration risk. They select low-risk projects and have an interest in satisfying clients to maintain their reputations. Some even provide certain guaranties to their clients.
• Easier to Create Jobs: All jobs created directly or indirectly by the regional center investment count toward the EB-5 job creation requirement. This means that the economic activity stemming from EB-5 project suppliers, service providers, and even jobs created in the surrounding community may be counted. Remember that a direct investment can count only the positions that are directly under the EB-5 project.
• Fewer Responsibilities: Regional center investors are not expected to take on many managerial duties, allowing them to live and work with greater flexibility than direct investors. The regional center will handle the administrative and compliance duties. No management experience is required for a regional center investor to be successful.
• Reduced Paperwork: Working with a government-approved regional center reduces the amount of supporting documentation an investor must provide in their I-526/I-526E and I-829 forms.
• More Transparency and Accountability: Improved transparency and oversight under the RIA help investors by reducing risk of fraud, and regional centers are subject to regular reporting requirements.

There may be disadvantages to this approach for certain investors.

Regional Center Investment Cons

• Less Control: A regional center investor must give up some control, as the regional center will make most of the important decisions related to the EB-5 project.
• Higher Costs: As previously mentioned, an EB-5 regional center investor will be on the hook to pay around $60,000 in regional center fees for an investment project that is unlikely to yield financial returns greater than 2% per year.
• Inexperienced Firms Are Risky: If you work with a regional center that doesn’t have a record of success, the risk of your investment not creating the required jobs by your expected timeline increases. This is why performing due diligence is key.

Loan vs. Equity Investments

EB-5 applicants should also know the differences between loan-based and equity-based investments. Neither is objectively better than the other. USCIS has authorized both.

Each investor will have to choose the model that best fits their objectives and risk tolerance.
That choice will also affect when the investor gets their investment money back.

Essentially, a loan-based investment uses funds from an investor to run an EB-5 project, and repays this money by a certain date. In contrast, an equity-based EB-5 investment uses an investor’s money to purchase interests in a project, with a flexible repayment date.

Loan-based Investment Pros

• Predictable Repayment: The money borrowed from an investor is repaid with interest by a specific date, called a maturity date. No more than a few optional extensions are permitted.
• Safety: EB-5 loans may be secured by collateral, which allows the lender to enforce repayment that is past due under a mortgage or guaranty.

Loan-based Investment Cons

• Smaller Profits: Investors generally receive lower financial returns on their investments.
• Financial Safety Features Vary: A secured loan is only as strong as the collateral behind it. The lender may not get all of their money back if the collateral is not worth as much as the loan.

Equity-based Investment Pros

• Potential for Greater Profits: It offers the potential for higher returns of up to 5% annually.

Equity-based Investment Cons

• Uncertain Repayment Date: The risk of delayed repayment increases, making it potentially harder for an investor to plan for repurposing those funds. Repayment is tied to major performance-related developments, such as sales or refinancing, instead of a predetermined date.

What Return Will My EB-5 Real Estate Investment Generate?

The main point of the EB-5 program is to fulfill the program’s requirements, return the investor’s capital, and get them a Green Card. Financial gains are only a secondary consideration. As previously mentioned, most EB-5 investors should not expect to get more than a 2% annual return.

Most regional center-sponsored EB-5 projects are low risk to maximize the likelihood of delivering Green Cards to investors. Direct investments or equity investments tend to present a greater possibility of strong financial returns, but take on more risk.

The EB-5 Real Estate Investment Process

Keep the main steps of the EB-5 process in mind to avoid missing something that could derail your application.

Step 1: Choose an EB-5 Project

Decide whether to invest in an EB-5 project directly or via a regional center, as discussed earlier.

Step 2: Make a Qualifying Investment

Make an investment that fulfills EB-5 program requirements. That means a minimum investment of $1,050,000, or $800,000 for a project located in a targeted employment area (TEA).

Step 3: File Form I-526/I-526E

An EB-5 applicant must prove to USCIS that their investment meets the minimum threshold, will create the required jobs, and will remain “at risk” during the investment period. To do this, they file either Form I-526 or I-526E.

A direct investor must file Form I-526, Immigrant Petition by a Standalone Investor.

A regional center investor must file Form I-526E, Immigrant Petition by a Regional Center Investor.

Step 4: Become a Conditional Permanent Resident

An EB-5 investor can apply for conditional permanent resident status after USCIS approves their I-526E. This status will last for two years.

An investor who is physically present in the United States must file Form I-485 to adjust their immigration status to conditional permanent resident. Eligible investors who reside in the U.S. on nonimmigrant visas can file this form concurrently with their I-526E to streamline the process and enjoy some Green Card benefits while their petitions are being processed.

An investor located outside the United States must apply with a Form DS-260 via a U.S. embassy or consulate in their home country.

Step 5: File Form I-829 to Remove Conditions

During the 90-day time frame at the end of the two-year conditional permanent resident period, an EB-5 investor must file Form I-829. This form shows that the applicant complied with the EB-5 program, including meeting the job creation requirement.

After USCIS approves Form I-829, the EB-5 investor and their qualified family members become unconditional lawful permanent residents of the United States. They can apply for citizenship by naturalization after living in the U.S. for a total of five years, which includes the two-year conditional permanent residency.

EB5AN Can Help You Get a Green Card Through Investment in Real Estate

The EB-5 program is an ideal immigration pathway for foreign real estate investors who seek lawful permanent residence in the United States. They and their qualified family members will become eligible for a variety of personal and professional opportunities.

However, it’s important to collaborate with a reputable EB-5 consulting firm instead of trying to tackle the EB-5 immigration process on your own. It’s also wise to consult with an experienced immigration attorney.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate to date.

Take a look at some of our major real estate developments to get a sense of the EB-5 projects we offer.

• Snake River Sporting Club, Wyoming: This rural, secured loan project has multiple safety features and qualifies for faster processing. The developer is Cygnus Capital. It has a minimum capital investment amount of $800,000.
• Twin Lakes, Georgia: This rural, secured loan project has multiple safety features and qualifies for faster processing. The developer is the Kolter Group. It has a minimum investment amount of $800,000.
• Boynton Beach, Florida: This project is located in an urban targeted employment area. It has a preferred return investment structure with multiple safety features. The developer is the Kolter Group. It has a minimum investment amount of $800,000.

To learn more about obtaining lawful permanent residence in the United States through the EB-5 program, book a free call with us today.