Select Highlights of the Interview with Michael from Germany
EB-5 Investor in the EB5AN Saltaire Urban EB-5 Project
Full Interview with Michael from Germany
EB-5 Investor in the EB5AN Saltaire Urban EB-5 Project
Transcript of the Full Interview with Michael from Germany
Why Did You Make an EB-5 Investment?
I am originally from Germany. We moved at the end of 2021 from Germany to the United States with an E-2 visa, because I have my company both here and in Germany. Nearly one year after that, we decided to go down the EB-5 road. The main reason, of course, is that the E-2 visa is not an immigrant visa; it does not lead to a green card or to immigration status.
So, the kids would age out once they turn 21. They love to be in the United States, they love their school, they love their new friends. Currently, we want to give them the opportunity to decide if they will stay in the United States or if they will go back to Europe or Germany.
To be able to give them this opportunity, we decided to go down the EB-5 route, which leads to a Green Card.
We came to the United States mainly because I started a business here. My main business, of course, is in Europe, and we wanted to extend the business to the United States.
I founded [my business’s subsidiary in the U.S.] in 2019, just a couple of months before the pandemic. My main business’s 100% subsidiary is in Miami. And then the pandemic hit, the travel ban was in place, and we weren’t able to enter the States for, I think, nearly one and a half years.
The main reason why we came to the U.S. was to grow the business in the U.S. We never had the intention to immigrate to the United States, but after being here now for nearly one and a half years, we found out, especially for the kids, it could be a better place for them to be and live in.
And as they’re pretty young right now (they are eight and nine) they will grow up here in the United States. We don’t want them to be forced once they turn 21 to go back to Germany or Europe or to get their own visa.
Finding an Immigration Attorney
For the E-2 visa process we had an attorney from New York. She was German, and she was recommended by the German-American Chamber of Commerce. So, we went to this firm in New York. It went pretty smoothly. We just had to prove that I owned more than 50% of the United States company, that a significant investment had been made, and, that, when we filed for E-2, we had our first U.S. employees.
Due to the pandemic, the embassy in Frankfurt was pretty backed up, so it took nearly six months after we filed to get an appointment. We got our appointment in October 2021, and it went really smoothly. We immediately got our visas, and one week later we got our passport back with the visas in.
Once I started to look for a way to stay in the United States permanently and came across for the EB-5 visa, I reached out to my E-2 attorney and asked them if they could also support me through the EB-5 process. Although they are one of the largest immigration firms, they don’t deal with EB-5 applications. They recommended getting an attorney that only focuses on EB-5, because EB-5 is very different from E-2.
Just to give an example, I think the E-2 filing is limited to about 90 pages; 90 or 80 pages. You are not allowed to send the embassy more than 80 or 90 pages. Our current EB-5 petition was about 5,000 pages, so it’s much more paperwork, especially when it comes down to the source of funds.
You have to prove where the money comes from, is it legit, and so on. It’s a completely different story between the E-2 and the EB-5 visas.
That’s why we also went with a specialized EB-5 attorney, Anahita George. She was introduced to me by Sam. Before that I had interviewed about 5, 6, 7 different firms, most of them very, very well known as immigration lawyers in the United States.
And although they were pretty good, all of them—even the terms were pretty much the same as with Anahita George—Anahita was super, super responsive. When I sent her a message via WhatsApp, it took maximum one hour to get a reply from her. This is what convinced me to go with Anahita George.
I would split it into two parts. I would call them the orientation phase and the execution phase. So I started looking at regional centers, looking at projects around about May-June 2022. At the same time, I started to reach out to Anahita George. I call this the orientation phase.
Of course, I had many questions: “Is there another way besides EB-5, as we are already in the country?” This process took until about October, I would say, three or four months.
Anahita was really great in answering any questions I had, not only regarding EB-5 but also the whole process. What would it be like to be in the States, no more under an E-2 visa, but on the way to the EB-5? What about the travel permit? Can we leave the country during the process? And so on. I had a lot of questions that were not directly related to the EB-5 process or the regional center, but to our current situation.
We decided to go with Anahita in mid-October. We signed the agreement, and then it took us about six weeks to get everything together: the documentation.
We had to translate about 10 years of bank statements from Germany. First, of course, we had to request them from the bank and then translate all of them. It wasn’t that much work, overall I would say about 40 to 60 hours from my side in the execution phase.
Of course the orientation phase, looking at the different regional centers, looking at the different paths, it was way longer. I have no idea if it was 100 or 200 hours, but it was really a long process to decide which way we were going to go.
I think the reputation is, of course, one of the most important parts. I also found out that regional centers deal with attorneys in very different ways. Some regional centers have connections with their attorneys that may be a little bit fishy. I would stay away from any attorney that has a direct relationship with a regional center.
There are immigration attorneys out there who also helped the regional center to be established, and now they consult the investor. I think that can be an issue because of the different perspectives. So, I would suggest hiring a really independent attorney.
Responsiveness is one of the most important factors, and, of course, reputation. Although Anahita’s firm is small in comparison to all the others I interviewed, she was by far the most responsive one over the others.
Why Did You Choose EB5AN’s and Kolter’s Saltaire Project?
At the very beginning, of course, there was the option to invest in my current business as a direct investment and to create those 10-plus jobs in the existing business. Another option we looked at was investing in a franchise, like Chick-fil-A or Burger King or whatever, and creating jobs in this new franchise.
Then we had the regional center option. It was a very easy decision to invest through a regional center, because I have my own company. I don’t have time to run a burger business as a side hustle.
And I don’t want to combine or rely on my current business for my immigration status; if I wanted to sell my current business, I wouldn’t be able to do that if my business were needed for my EB-5 immigration. I didn’t want to have direct investment in my current business because I wanted those things to be independent.
I didn’t want to invest in another direct business like Burger King or any franchise because I didn’t have time for that. It easily came down to the decision to go with a regional center.
There are two different types of regional centers, in my opinion: those offering a loan—where you are offering a loan to the regional center—or the equity side. When it comes to the exit strategy, I think the equity side could be a little bit challenging because, of course, you will only get your money back if the equity is being sold to somebody else.
On the opposite, with the loan, you will get your money back once the project is finished, once you have filed your I-829, and so on. I decided to go with a loan.
There were not that many options, to be honest. I think there are about 5, 6, 7 regional centers out there. Some have already gone out of business within the last year. I looked at about 4, 5, 6 different regional centers, and the main reason why I went with the Saltaire project was, of course, the builder.
I think this is the most important part. Because if the builder defaults, everything could be gone. With Kolter being in business since 1997, there were a lot of old projects from them to examine. Not only EB-5 projects but also regular real estate projects. I think Kolter is one of the most reliable [developers] currently.
Another reason why we decided to go with Saltaire is that we are located in Tampa, Florida. Saltaire is in St. Petersburg, Florida, which is just a 30-40 minute drive away. I had already seen Saltaire before I ever met Sam, before I knew that it was an EB-5 project, because we were making a lot of trips to St. Petersburg. It’s a beautiful city, and I came across Saltaire, and then I found out it is a regional center [project].
Another really important thing is that Saltaire, at the time we invested, already had 100% of all the apartments sold. Every one of the buyers had already put down the 30% non-refundable deposit, and all jobs have already been created at this time. I think the first closings are planned to happen in the fall of this year, so this project is already very, very advanced. It’s mostly a great project for us because… of course there are risks, but I think the risks are pretty low.
As we are from Germany and not from India or China, we are not backlogged, so it doesn’t make any huge difference to us if it is an urban or a rural area. We didn’t really consider this factor, to be honest. It was more important for the builder to be stable, the whole project to be stable and well-financed; the jobs were already created. These are the things we did take a look at.
As we were already in the States, we filed for adjustment of status. We filed in mid-January this year; we’re just waiting for our travel permit. Nothing really changed for our current situation; we are just waiting for the travel permission and the files to be processed.
I looked at several projects, which were also equity. They were all real estate projects. I found some, like a Ferris wheel in New York or a restaurant somewhere in Georgia. I stayed away from everything that was not real estate.
There were several projects: in Maryland, Saltaire, Georgia… All of them were similar, but of course the details were different and there was none, besides the Saltaire, that was already that advanced.
No other project had already created and proved the jobs, already sold 100% of the apartments, and especially gotten a 30% non-refundable deposit from the buyers. I think is a great thing, and it lowers the risk enormously.
I think the most important part about a regional center is whether it can create the jobs. When you file the I-829, does it qualify you for the restrictions to be removed?
On the other hand, do you trust the regional center? Will it be able to repay your investment? I think these are the most important things you should look at.
Saltaire had already created the jobs, the buyers had already put down a 30% nonrefundable deposit, and 100% of the apartments were sold. So, I think Saltaire is a great project with very low risk. But of course, there is still some risk for it to qualify for (a) being able to repay and (b) for creating the jobs.
I think the worst thing that can happen is that a regional center won’t be able to create the jobs, you are unable to get your restrictions removed, and your investment funds are gone. I heard about an EB-5 investment in New York where friends of mine invested, and this exact scenario happened: they didn’t get back their investment, and the project was stopped.
I think you should take a look at both things. Jobs creation, does it lead to the goal of the green card? And, of course, what are the odds that you’ll get your investment back?
To be honest, I think the builder is much more important than the regional center, because if the builder defaults, if the builder cannot build the project, if the builder cannot pay back the loan…
Kolter being that long in the business, and having such a great record, was one huge point that helped us decide to go with Saltaire.
Concluding Advice for Investors
I would start by deciding between a loan or equity investment. Both have their upsides and downsides. Next, I would start narrowing it down by the builder or the company behind the project. Probably two or three regional centers will be left once you narrow it down by these two points.
Take a very good look at the contracts. Find out if there is a senior loan and a loan agreement between the builder and the senior lender. It comes down to these two points: jobs and return of investment.
The more advanced the project is, I think the better the chances are that jobs will definitely be created. If it is a very, very early-stage project, a lot of things can happen. We saw a lot of things happen due to pandemic which we never thought to be possible at all.
I think that’s the main part. Narrow it down from loan, and equity, take a look at the builder, take a look at the senior loan agreement, take a look at the regional center. How is it structured? How’s the loan structured? How are the terms? When will you get paid back your investment? And so on. Good luck.