EB-5 Investor Testimonial:
Siddharth from India

I spoke to some family friends. Luckily, I came across one or two people in my immediate vicinity who had taken the EB-5 route or who had gotten some of their family members to take the EB-5 route in the past couple of years. A lot of people complained that their attorneys were not very responsive. I was particularly focused on finding an attorney who not only had an intricate knowledge of how the visa regulations work in the U.S. but also had a good sense of the situation that candidates from India usually face.

Sam, you yourself introduced me to Anahita [George], who is one of the attorneys that you’ve been associated with in the past.

I had a conversation with Anahita to understand where she comes from, what her background is, and what she is trying to do or how she goes about the process. I also read a lot of online reviews for Anahita. Usually, online reviews can be doctored and fabricated, especially for someone like a new lawyer or a doctor who’s trying to launch a practice.

However, I came across reviews of Anahita from 2018 and 2019, and I realized that, if several people testify to the expertise of a lawyer over several years, it adds up to a certain level of credibility.

After going through the experience of preparing my application and being advised by her, I think all of those reviews were accurate. She was always available and reachable through WhatsApp, and I could just pick up the phone and call her, whether it was a weekend or a weekday. She would come back to me with any requirements for missing documents, and she was happy to walk us through pitfalls in sourcing funds from different areas.

She was crucial in helping us prepare a spotless application that was easy for USCIS officials to understand and approve.

I started looking at this option around October [2022]. My role was being eliminated, and I would be on the payroll for three more months. I started thinking about this in October and decided this was the only route by November. I had started interviewing with some firms, and a lot of places that wanted to make me an offer did not do so because they couldn’t sponsor my Green Card right away. And even if they could, my visa would run out in a year, I would have to leave the country and go to another location outside America and work there for a while and then come back to the U.S. In a market environment like this, it’s not possible for most employers to do this kind of heavy lifting for candidates they’ve never worked with in the past.

I formally hired Anahita by signing the agreement with her and transferring the first installment of the fee in mid-November. The entire process concluded on the 7th or 8th of February 2023, so it took approximately two and a half months.

I will say that the process involved me looking at a number of projects for EB-5 investors, while also handling the back-office part of it, which involves arranging all the documentation required by USCIS, making sure that my sources of funds are in order, and sourcing any additional funds I may need from the right channels with the appropriate level of documentation. This requires a lot of input from the attorney.

I would say it took me about one to one and a half months to arrange all the funds required and make sure all the paperwork was in order. We considered a number of options when we started looking at this because I did not have the $800,000 in my account ready to go.

We looked at options such as sourcing some of the money from India, taking a loan from my parents, and reaching out to friends and family in the U.S. who could help. I think any prospective EB-5 investor who is considering this route should set aside a two-month period of intense preparation, both for project selection and paperwork.

It’s no use arranging all the funds and investing in a project if the paperwork is not in order, because that’s what USCIS is really focused on: the source of funds and the trail of documents. This gives them the satisfaction that these funds have been sourced through a legitimate medium, whether it’s through a job-related income or through a business, that has been documented through and through. That’s my recommendation.

I did not know it was going to be this labor-intensive. In fact, when I spoke to an immigration lawyer, and she gave me a sense of how much effort it would require, she said a lot of applications are 3,000-5,000 pages. I did not believe her, honestly, because that just seemed like a lot. And I have been through the H-1B process several times and come to the U.S. as a tourist in the past as well. I thought, “Okay, how much more paperwork can they really ask for?”

But from USCIS’s perspective, they’re going to permanently admit an individual and family members into the U.S., and the route we are taking is by investing in an entrepreneurial enterprise in the U.S. So, it’s extremely important for the government to get comfortable with the fact that the individual they are admitting has taken an ethical route of earning their funds or taking a loan from friends.

It was a bit of an intense process and having time to focus on it was really important. People who are considering this process while also having full-time jobs should allocate 2-3 months to make sure all their paperwork is in order. It could be straightforward if all the income has been sourced within the U.S. and they have $800,000 ready in their account. However, if the money has been sourced from friends and family, there will be things like promissory notes, sources of income, and bank statements to show the legality of the funds, which can take time.

The first thing that is important here is that the attorney should be very experienced. You don’t want to hire an attorney who is just a new kid on the block starting out in EB-5 because the rules and regulations around EB-5 are still developing. The government keeps thinking about new regulations to bring in place. Recently, I’ve heard about a substantial increase in the fees for people who file for EB-5. So you want somebody who has been through several EB-5 cases, preferably for applicants from your region.

And in Anahita’s case, she has handled a lot of cases from India. So she knows that if you’re sourcing funds from India, a lot of times there is not a lot of paperwork available. People have family assets like land or property, which was acquired 40 or 50 years ago, and sourcing the paperwork for all of that is very difficult. So my first advice is to make sure that the attorney is very experienced.

Number two, make sure that the attorney is very communicative. Now, these are easy things to say, but for someone who is an immigrant in the U.S. and hasn’t been around for a while, it’s difficult to know which attorneys are good and which aren’t.

That’s where online reviews are helpful, especially if those reviews go back several years, because that gives you a sense of the attorney’s reliability and ability to help you through the process. And as you start working with the person, you’ll get a sense of how communicative they are in terms of how easily they respond to your messages and how easily you can get in touch with them and work through any problems you might face. That’s my recommendation.

My wife, who is an economist, pointed me toward a lot of resources related to real estate performance in the U.S. I spent one to two weeks visiting the project and researching the Atlanta real estate market because that’s where the project is based. I wanted to be sure that, 5 years from now, the trends that were being envisaged in the marketing materials would still be prevalent. I don’t want to catch a wave right at the peak; I want to catch a wave when it’s rising and hopefully continues to rise 5 years down the line.

After I got comfortable with the prospects of the Atlanta real estate market, I started looking at communities for senior citizens. One statistic that stood out to me was that the most financially well-off category of citizens in the U.S. is senior citizens. There are obvious reasons for that; these are folks who have a lifetime of professional accomplishments behind them. They have progressed in their careers, made some money, put some money aside, and bought their first homes 20 to 30 years ago, which have increased in value over the decades. They are now in a position to leave behind the busy life of the big city and move to a community where they can meet like-minded individuals. There, they can spend the next 20, 30 or 40 years of their life enjoying themselves and living the next chapter.

So, it was important to realize that the financial characteristics of these people, even if they’re buying a retirement home, will be that they will most likely sell their existing home, which will have appreciated greatly since they bought it 20 to 30 years ago. This means they will have a lot of equity.

Furthermore, if they’re moving into a retirement home, they’re probably not going to buy a home that’s more expensive than the one they already have. And, given that they have a lot of cash available, they’re most likely not going to be dependent on mortgage rates as much. Sure, they might take a mortgage of $100,000 to $200,000 for a $500,000 home, but most likely, they will try to minimize their dependence on mortgage rates, which gives me comfort that the 1,300 homes that Kolter has planned to build in Twin Lakes is an achievable target.

When I first read about the Twin Lakes project in the email Sam sent me, I was taken aback because I had never heard of a 1,300-home single-family project. But after traveling to Atlanta and visiting Twin Lakes, I was able to verify a lot of the information I had read about the project. I didn’t tell the sales office that I was an EB-5 investor; I just said I was looking for potential retirement homes for my parents.

By talking to the salespeople and asking questions in a roundabout way about how the project and its market were performing, I was able to verify a lot of information I had been told about the project and verify the features they talked about in their marketing materials.

In fact, there was a funny story. They have a set of model homes, about 10 to 12, of varying sizes and configurations next to the sales office in Twin Lakes. I had an overnight flight, a four-hour flight from San Francisco to Atlanta, and I started touring all the homes one by one. I went inside each home, knocking on the walls and doors to see the quality of the material. I was checking if I would be interested in buying a home like this if I was 55 or older and looking to move into a retirement community.

And then by the time I got to the eighth or ninth home, I was so tired that I ended up crashing on one of the beds for a couple of hours. Thankfully, nobody came and woke me up and pushed me out. But it gave me a sense of whether the builder was actually trying to market a legit operation here.

Another thing that stood out to me was when I entered the gates of Twin Lakes. They have a couple of signboards right outside the entrance, and these signboards relate to other builders who are also a part of that 2,600-acre parcel of land. For folks who are not initiated in this: Twin Lakes is 2,600 acres, 1,300 acres of which is the Twin Lakes Georgia Project where Kolter is building the Cresswind community, which consists of 1,300 homes.

The other 1,300 acres were developed and the land was parceled out to two or three other developers in the U.S. who are also building single-family homes. One of the names that stood out to me was D.R. Horton. Given that I am a technology banker and don’t have a lot of experience in the real estate or building product side, D.R. is the only name that I recognized. This gave me a sense of, okay, if a parcel of land has been bought by a well-known builder like D.R. Horton, then this seems like a very well-established operation. The other thing that also gave me confidence was, when I was talking to the sales team, I started asking them about the senior construction loan that Wells Fargo has given to Kolter for developing the Cresswind project.

I got a sense that, in terms of the liquidity situation of Kolter and the project they’re developing in Georgia, I don’t really have to worry about what will happen five years down the line.

If, for example, the market deteriorates a lot or there is a situation like 2008, the project might get pushed out by one or two years. There might be a slowdown in sales, and some buyers might not decide to close on their bookings. But taking the long-term trends into consideration, and the fact that the builder has honored all its commitments in the past 25 years, this project should be completed and hopefully, my capital will be returned.

So going to Atlanta, doing my due diligence in person, and talking to folks gave me some level of confidence. Because what you’re trying to do in a scenario where there is imperfect and incomplete information is trying to talk to different groups of people; you hope that these groups of people are not interrelated, that they don’t talk to each other, so that if everybody tells you the same thing, you can get some comfort in the fact that there is a consensus about the prospects of the project.

And whatever the builder is doing is ledger. It’s just trying to maximize your chances of having accurate information, which you can use to make your decisions.

A number of things. Number one, just the Atlanta area in general. I was a business school student at Duke, and a lot of my classmates ended up going to Atlanta to work in consulting, technology, or other industries. The things that stood out to me were that, first, Atlanta is a hub in the U.S. It’s a hub for air transportation, and it also has relatively milder weather than the East Coast. I spent two years in New York, and I just couldn’t handle the cold.

Atlanta also has a good healthcare system. This was my first time in downtown Atlanta, and just coming out of the airport, 15-20 minutes away, you see the Emory University Medical System. I’m assuming senior citizens who are moving into these retirement homes are also looking for proximity to good healthcare systems given their age.

At the same time, I think the fact that Atlanta is a hub makes it relatively easy for folks to fly in and fly out because a lot of these retirees have family and kids who will be in different parts of the U.S. I think it kind of makes sense for someone to move to a central location. The other thing that also stood out to me was that Kolter had developed the Cresswind brand over time. They figured there was a need in the market for a brand of homes catering to a specific demographic, and given that this is not the first Cresswind project that Kolter has done, that gave me a level of comfort.

Also, there’s the fact that they first developed the Peachtree City project, which is, I think, 13 or 20 minutes from the airport in downtown Atlanta. In this project, homes are priced at a significantly higher price point than those in Twin Lakes.

And there’s the fact that that project has been very, very successful. I think, at this time, they just have two more homes to close before they declare the project complete. This gave me a sense that, if they can sell 400 homes— in a span of four or five years and with a price point of $600,000 and above—in a place like Atlanta, that tells you what kind of demand would exist for homes that are at a price point that is 30 or 40% lower.

And that was the ability to triangulate what’s happened at Peachtree with what’s going on at Kolter. And interestingly, just a few days after my Atlanta visit, I learned that Kolter has launched two more projects in the Atlanta area under the Cresswind brand. This gave me a sense that this trend of retirees moving to a place like Atlanta is here to stay, and hopefully, Cresswind will continue its momentum as the fastest-selling project in the Atlanta area for several years to come.

Because, from my perspective, what I really care about is that five years down the line, I should have the assurance that my capital will come back.

The other thing that I would like to point out for potential investors is a very good feature in the documentation of the project. The builder has the option two years down the line, in 2024, to turn this preferred equity investment into a loan, which will be an unsecured loan and sit below the senior construction loan that Wells Fargo has.

I would rather want to be in a project where the prospects of an investor turning an equity investment into a loan are high, because a loan always comes with some sort of guarantee. And in this case, if the builder does take the option of converting this amount into a loan (which will be dictated by how interest rates play out in the next couple of years), there will be a parent guarantee that Kolter is going to provide on the loan. And hoping this guarantee does not go away five years down the line, I will have a very high level of confidence that my money is going to come back. So that’s also an innovative feature of this project, which I wanted to highlight for people.

Given that there are three or four different categories of projects that people can invest in, rural was definitely at the top of my list when I started my research. The simple reason is that, for folks coming from India, the rural category has a lot of unused visas that can be allocated to folks who invest in these projects. The only problem is that good rural projects are hard to find, and even among those good rural projects, you have to find a project that creates the number of jobs that are being promised. At the same time, the project must seem viable enough that, five or seven years down the line, your capital will have a high probability of coming back.

I obviously went through the job creation report that was provided in the marketing materials. I looked at the fact that these are basically construction jobs, that this is a project with 1,300 homes to build. They’ve already built about 484 homes, and there’s still about 800 or 750 homes to go, meaning that there will be an ongoing need to create jobs for folks in the Atlanta area in order to complete the project.

The builder is planning to build 230 homes every year and sell them to customers. These are homes made to order, so it’s not like they’ll build these homes and then wait for someone to show up to buy them. This means there will be an ongoing need for jobs involved in building these homes for the next 5 to 7 years.

That was important for me to get the assurance that if I put this money in, the jobs that are expected to be created will be created, and USCIS will have the assurance that I’m doing what is required as an investor to create the jobs needed to qualify for a Green Card.

I’ll be honest: my first priority was to look at housing-related projects like residential real estate, single-family homes, which are being sold the moment they are built. At the same time, I recognized that most of the projects available in the U.S. are in the hospitality space, like golf resorts or equestrian centers or things of that nature. They sound nice, but you don’t know a lot about them, and it’s very hard to forecast what the cash flows will be like.

And coming from a banking background, every time someone talks to me about a real estate project or any other enterprise, I start thinking about what the financial model for the business will be like. And if the financial model is sketchy to me in terms of what the payback will be, I immediately start removing it from my consideration. So, the Twin Lakes project was definitely the one that stood out the most. I did look at a couple of projects in southern California being built by a company called Hillwood, owned by the son of Ross Perrot.

I’m not from America, but I think many here will know who Ross Perrot was. As an Indian, I can tell you he used to run a famous I.T. company that was sold for billions of dollars to Dell. His son runs a real estate development firm called Hillwood, and they were building 600 to 700 single-family homes in some part of Southern California. The problem with these homes was that the project hadn’t even started yet. They were just developing the land, and a lot of the approvals required for job creation were not even in place at the time.

So, I think one key thing people need to look at is whether the approvals are in place or not: will you invest your money and then wait six months to hear if USCIS has granted approval or not? And then, what if USCIS says no to the project and you’re left without a visa and might have to leave the U.S.? A big comfort for me was that EB5AN had all the approvals in place.

When EB5AN provides you access to their Dropbox folders, there will be a lot of documents in it. My recommendation to potential investors is to go through every single document, because that’s what I did. In a typical investment banking buy-side scenario where you are selling a company, the buyer is going to look at a data room and they’re going to look at every single document.

And that’s exactly what I did. I actually looked at the approval certificate from USCIS for the regional center to make sure that whatever Sam was telling me was right, and he’s legit. At the same time, I also looked at the approval in terms of job creation requirements, having been met by the report that was provided in the virtual data room.

A few things to keep in mind here. I come from a family where my father used to be a builder back in the day in India. I have a good understanding of how real estate works in India. I also got help from an old family friend who lives in Omaha and runs a residential and commercial real estate development firm. Interestingly, he had no idea about Kolter, but he was able to give me some really good pointers on how to think about the capital stack. A common problem builders face, whether it’s in India, the U.K., or America, is running into capital-related problems.

You start a project, hoping people will buy X number of homes, and then you build the rest of the project based on what they give you. But if interest rates rise or there is a crisis and fewer customers appear than you projected, you won’t be able to complete the project. You’ll have to look for a buyer who will buy it from you in a fire sale and then complete it. The first thing that struck me was that Kolter projects have been capitalized with a full capital stack that includes a senior construction loan from a well-known conservative lender, like Wells Fargo.

I recently started working as a banker at Wells Fargo and I know they are a very conservative organization. They don’t just give construction loans to builders they don’t have confidence in. The fact that Kolter has recently announced a condo project in Florida with a $240 million senior construction loan gave me a sense that Wells Fargo is comfortable with Kolter and their projects and the way they manage their capital expenditure.

I think this acts as a big assurance, because in scenarios where you have imperfect information or information asymmetry, you try to arrive at a proxy of what situations will look like in the future based on how a more reliable and established person or institution has evaluated the project.

In this case, I feel that, by looking at what wealth has done and reading through the loan agreement, if you look at the senior construction loan agreement, you’ll realize that the loan comes in certain tranches. At the same time, the fact that EB-5 investors are putting in their capital forms a part of the overall equity stack. In the future, as homes are built, some of the capital that will be returned in terms of the revenues from selling those homes will also be recycled into these projects.

I think that gives me the confidence that this is a financially viable project. It’s important that the project is able to stand on its own legs. Even if you are recycling capital that comes in from future sales of homes, there should be a good business plan in place by the builder to bring in that revenue.

You know, if you look at the marketing materials, there’s a slide, if I remember correctly, that basically shows the number of homes that Kolter plans to build every year. Of course, it’s a projection and nobody really knows what’s going to happen, but my scenario, the way I evaluated this was: okay, even if Kolter is only able to sell 80 or 100 homes in three or four years, instead of the projected 130 homes in those years, will they be able to hit the target by 2030 or 2029? And in all these scenarios, the analysis indicated that the project is going to be viable and is most likely not going to run into any financial issues that would stall the project. That was my way of looking at this.

This is a hard question to answer. I mean, of course, the first response is very difficult to gauge at this time. But that being said, I think the one thing I mentioned earlier that is still going to stay valid, even if there is a slowdown, is that the long-term macro trend is in favor of this demographic of senior citizens moving to areas like Atlanta and then moving into these senior active adult communities. That’s one.

Number two, I think, as far as the real estate slowdown is concerned, slowdowns will only occur in scenarios where there’s overbuilding of homes and there’s more supply than demand. My reading of the situation is that this scenario has not played out in the U.S. yet. It’s not 2008.

So even if there is a slowdown, the slowdown is more of a result of how high the interest rates are and how difficult it is for some folks to finance the purchase of these homes if they are taking a mortgage. Let’s say those scenarios play out in a way that Kolter has to slow down the pace of development by a couple of years. I think Kolter has a lot of financial muscle in terms of the financing they have put in place. There is a scenario they have taken into consideration: if there is a situation like the 2008 crisis, then what is the latest they can finish the project by?

Now, according to what I learned from one of the people I spoke to in the sales office, and even if I conservatively discount what the person said, it would still be done by 2032, in the worst case. And that is assuming that, for two or three years, Kolter does not sell anything, which is highly improbable.

Also, interest rates are bound to go down again. This level of interest rates for the next six to eight months is fine to reduce inflation and maybe increase unemployment in the economy a little bit, but in the long term this scenario is a disaster for the U.S. economy and the default situation is that interest rates are going to have to go down again.

Also, investors who are considering this project or will be investing in 2023 or 2024 should keep in mind that 2024 is an election year. No government wants to enter the election year with an economy in a massive recession. As a politician, you want people to feel good about the work that has been done by your administration, and you want to make sure you can show your constituents that the NASDAQ is up and job creation is at an all-time high during your administration.

So, keeping these things in mind, I think the long-term scenario is that, even if the pace of home sales slows down and gets to maybe 75% of what it is right now, the project will get finished by 2031 or 2032. There are just so many moving variables around this.