EB-5: recommendations for RCs and projects?

[dm2b 0]

I've decided to move to the US via EB-5 visa. Next stage is deciding on a project to invest on; My priorities are, in order:

1) Getting the main capital back after about 5 years (losing $500k would not break me, but would put a really serious cramp on my retirement prospects);

2) Getting the permanent green card at the end of the two years;

3) Getting a decent ROI on the capital (not 15% p.a. like a joker posted is some forums, but 2-3% to at least cover inflation would be nice).

I've seen that CanAm publishes a sterling track record, and I've read good things about Vermont/Bill Stenger/Jay Peak (but seen no published track record from them).

Can someone comment on the two RCs above, and/or refer me to good RCs and projects?

Thanks in advance.

Edited September 28, 2013 by dm2b

[Gosia & Tito 199]

I've decided to move to the US via EB-5 visa. Next stage is deciding on a project to invest on; My priorities are, in order:

1) Getting the main capital back after about 5 years (losing $500k would not break me, but would put a really serious cramp on my retirement prospects);

2) Getting the permanent green card at the end of the two years;

3) Getting a decent ROI on the capital (not 15% p.a. like a joker posted is some forums, but 2-3% to at least cover inflation would be nice).

I've seen that CanAm publishes a sterling track record, and I've read good things about Vermont/Bill Stenger/Jay Peak (but seen no published track record from them).

Can someone comment on the two RCs above, and/or refer me to good RCs and projects?

Thanks in advance.

Few things you should take into account:

This is primarily a DIY-do it yourself site, and I'd say the vast majority is discussing a fiance/fiancee or marriage immigration case. There are certainly a number of people that has other family related discussions, but in general, not sure that you would get the good advice you are looking for. Sorry about that.

As in most investments, and EB-5 is an Investor visa, you have to be ready and prepared for the possibility of loosing the entire capital invested; if you are not, you should not play this game. Your post seems to indicate that you might not, nothing wrong with that, but it is the first indication that perhaps this program is not for you.

Assuming that you are prepared for full loss, remember that the US Government is who define the rules of this game, and rules can change with no notice. A change of the rules is not inherently wrong, but it could impact negatively your prospects. One particularly important is that the program is not permanent (as far as I know), that is, it is extended every so many years. A worst case scenario is that while you in the program, it does not get extended. Not saying it will happen (as it has been extended many times), but if it does happen, but outcome is that all applicants in the program might not be allowed to continue process. Of course, it is also possible that those applicants would be allowed to complete the terms of the program and eventually get a GC.

One other particularly important question you have to ask yourself is: Why would a project or business need a loan from an EB-5 program? If the business plan is sound and the return/risk ratio was adequate, they should be able to get a loan from a bank or other financial outfit. The kind of projects that have a real high risk (with a big potential payout) are mostly directed and funded by VC-venture capitalists, who understand the high risks and know they would lose a lot, but that a few payout will still keep them ahead.

You need to check stats related to the EB-5 program. SOme I've seen seem to indicate that there is only about a 50% overall success (that is, of the total number of applicants in the past 10-20 years, only 50% eventually got permanent resident cards and/or citizenship). That doesn't seem to me as a good success record.

Read the article below. It's a couple of years old, but can get you something to think about, and CaNam is mentioned

http://www.reuters.com/article/2010/12/22/us-usa-immigration-business-idUSTRE6BL2KJ20101222

Of course, there are also success stories, but it seems it's only half of the time.

Good luck in your plans.

Edited September 28, 2013 by Gosia & Tito

[aaron2020 11,651]

I've decided to move to the US via EB-5 visa. Next stage is deciding on a project to invest on; My priorities are, in order:

1) Getting the main capital back after about 5 years (losing $500k would not break me, but would put a really serious cramp on my retirement prospects);

2) Getting the permanent green card at the end of the two years;

3) Getting a decent ROI on the capital (not 15% p.a. like a joker posted is some forums, but 2-3% to at least cover inflation would be nice).

I've seen that CanAm publishes a sterling track record, and I've read good things about Vermont/Bill Stenger/Jay Peak (but seen no published track record from them).

Can someone comment on the two RCs above, and/or refer me to good RCs and projects?

Thanks in advance.

Asking a bunch of unqualified strangers on a public forum for investment advice is pretty brave.

Since money is not an issue, maybe you should pay a few thousands to a EB-5 financial advisor who is qualified to evaluate your investment choices. This is the prudent move - spend a few thousand dollars to protect $500,000.

There are plenty of RC scams. There was one in Chicago. There was another one in Texas.

You should not take investment advice from us.

[dm2b 0]

Hi Gosia & Tito,

First of all, thanks for taking the time to reply to our post, and sorry for the long delay in coming back to the forum to reply back to you. More below:

Few things you should take into account:

This is primarily a DIY-do it yourself site, and I'd say the vast majority is discussing a fiance/fiancee or marriage immigration case. There are certainly a number of people that has other family related discussions, but in general, not sure that you would get the good advice you are looking for. Sorry about that.

No prob, and thanks for the heads-up.

As in most investments, and EB-5 is an Investor visa, you have to be ready and prepared for the possibility of loosing the entire capital invested; if you are not, you should not play this game. Your post seems to indicate that you might not, nothing wrong with that, but it is the first indication that perhaps this program is not for you.

This is something I've given long thought to. I think I'm ready and prepared for (in the sense that I can *survive*) the loss of the entire $500K investment plus fees, but of course it will do me no good, and it's something I will do my utmost to try to prevent. IMHO, anyone (no matter how much money he/she has) that doesn't care about losing half-a-million USD should be institutionalized before showing other deranged behaviors... :-)

Assuming that you are prepared for full loss, remember that the US Government is who define the rules of this game, and rules can change with no notice. A change of the rules is not inherently wrong, but it could impact negatively your prospects. One particularly important is that the program is not permanent (as far as I know), that is, it is extended every so many years. A worst case scenario is that while you in the program, it does not get extended. Not saying it will happen (as it has been extended many times), but if it does happen, but outcome is that all applicants in the program might not be allowed to continue process. Of course, it is also possible that those applicants would be allowed to complete the terms of the program and eventually get a GC.

I'm aware of that, but thanks for pointing it out. IMO, as it has never happened, this is a minor risk; the big risk is choosing a bad RC and/or project and losing both the I-829 and the principal invested... this seems to occur with some frequency.

One other particularly important question you have to ask yourself is: Why would a project or business need a loan from an EB-5 program? If the business plan is sound and the return/risk ratio was adequate, they should be able to get a loan from a bank or other financial outfit. The kind of projects that have a real high risk (with a big potential payout) are mostly directed and funded by VC-venture capitalists, who understand the high risks and know they would lose a lot, but that a few payout will still keep them ahead.

One would think that there would be a market for low-interest (much lower than a bank would provide) loans; certainly, if I was an american entrepreneur with a project capable of generating enough jobs and having to decide between paying 10% yearly for a bank loan or 5% for one coming from an EB5 RC, I would prefer the latest; the 5% would be more than enough to pay for the RC and its partner's work during the project, and a small part of it could be provided as interest to the EB5 investor, which would probably be happy with it due to his main interest being the VISA. From what I've been able to verify, this is exactly what the CanAm/PIDC RC does, see for example http://www.prweb.com/releases/2013/5/prweb10714371.htm;

You need to check stats related to the EB-5 program. SOme I've seen seem to indicate that there is only about a 50% overall success (that is, of the total number of applicants in the past 10-20 years, only 50% eventually got permanent resident cards and/or citizenship). That doesn't seem to me as a good success record.

I've searched for them but can't find anything useful, at least from an "official" source: USCIS stats just publish the number of petitions they have received/approved/denied every month, which makes for very lousy statistics as received petitions take many months to be approved or denied, and so when the approved/denied petitions make it to the stats, you can't correlate them with the received ones anymore...

Read the article below. It's a couple of years old, but can get you something to think about, and CaNam is mentioned

http://www.reuters.com/article/2010/12/22/us-usa-immigration-business-idUSTRE6BL2KJ20101222

I've seen that report; I think it makes exactly the mistake I pointed above: it sums up all applications for a number of years and tries to come up with a success rate. As the program is growing (ie, more petitions being received now than earlier), it woud skew the statistics even more...

Of course, there are also success stories, but it seems it's only half of the time.

It certainly would be a coin toss if I randomly selected a RC/project; my idea by posting here is to try and select a very good one, and so get better chances...

Good luck in your plans.

Thanks! :-)

[dm2b 0]

Asking a bunch of unqualified strangers on a public forum for investment advice is pretty brave.

Advice given is not necessarily advice followed... :-) certainly not blindly.

Since money is not an issue, maybe you should pay a few thousands to a EB-5 financial advisor who is qualified to evaluate your investment choices. This is the prudent move - spend a few thousand dollars to protect $500,000.

I plan on doing that as part of my due dilligence. I've even found some who provide that service by googling; of course, if you or any other forum member can point me to any you have had good experience, I would be grateful.

<to be continued to work around a "merge_too_many_quotes" error>

<continued from previous post>

There are plenty of RC scams. There was one in Chicago. There was another one in Texas.

I'm aware of those, and many others, not only outright scams but blighted projects that from the very beginning had very little chance of success. That's exactly what I'm trying to avoid.

You should not take investment advice from us.

You realize this is a logical paradox, right? As the above in itself is investment advice, then it should not be taken too, which would lead to the contrary conclusion... :-)

Seriously now, I understand what you mean, and I thank you for the warning. But again, my idea here is to collect people's experiences in order to form my own judgement, won't follow anything blindly.

I now realize, thanks to Gosia & Tito, that I'm probably at the wrong place as very few people here have gone that route... but it never hurts to try.

[Gosia & Tito 199]

Hi Gosia & Tito,

First of all, thanks for taking the time to reply to our post, and sorry for the long delay in coming back to the forum to reply back to you. More below:

No prob, and thanks for the heads-up.

This is something I've given long thought to. I think I'm ready and prepared for (in the sense that I can *survive*) the loss of the entire $500K investment plus fees, but of course it will do me no good, and it's something I will do my utmost to try to prevent. IMHO, anyone (no matter how much money he/she has) that doesn't care about losing half-a-million USD should be institutionalized before showing other deranged behaviors... :-)

I'm aware of that, but thanks for pointing it out. IMO, as it has never happened, this is a minor risk; the big risk is choosing a bad RC and/or project and losing both the I-829 and the principal invested... this seems to occur with some frequency.

One would think that there would be a market for low-interest (much lower than a bank would provide) loans; certainly, if I was an american entrepreneur with a project capable of generating enough jobs and having to decide between paying 10% yearly for a bank loan or 5% for one coming from an EB5 RC, I would prefer the latest; the 5% would be more than enough to pay for the RC and its partner's work during the project, and a small part of it could be provided as interest to the EB5 investor, which would probably be happy with it due to his main interest being the VISA. From what I've been able to verify, this is exactly what the CanAm/PIDC RC does, see for example http://www.prweb.com/releases/2013/5/prweb10714371.htm;

I've searched for them but can't find anything useful, at least from an "official" source: USCIS stats just publish the number of petitions they have received/approved/denied every month, which makes for very lousy statistics as received petitions take many months to be approved or denied, and so when the approved/denied petitions make it to the stats, you can't correlate them with the received ones anymore...

I've seen that report; I think it makes exactly the mistake I pointed above: it sums up all applications for a number of years and tries to come up with a success rate. As the program is growing (ie, more petitions being received now than earlier), it woud skew the statistics even more...

It certainly would be a coin toss if I randomly selected a RC/project; my idea by posting here is to try and select a very good one, and so get better chances...

Thanks! :-)

Not a probl;em. It seems you are sharp and well informed; that is very good.

I concur that the stats USCIS provides are lousy, generally they don't do such a good job but also we have to recognize that they are underfunded and the volume of matters they have to handle is more than what they can.

Together with this bad stats is the problem that the only stats that are more or less worth their weight is what an organization like CanAm has, and I'm always very suspicious of self-serving stats, espceically when one cannot verify independently.

I did a little more digging, and it seems that there are very specific types of projects that are steered towards the EB5 program, the kind of projects that would not be as popular in the normal financial community because perhaps of higher risk, lower returns or combinations of several factors that make them not so easy to fund in regular channels. I don't know that this is the case, but in regards to your quote of the prefering to pay 5% in an EB-5 related funding as oppose to 10% to the bank, I have to think that there is some kind of incentive or reason that balances that 5% difference, and I think it is that with the bank, if you fail, the debt is not just disimissed: unless some legal actions like bankruptcy are taken, the debt still would have to be rep-paid. On the EB-5 on the other side, what happens if the project fails to produce the epxected results? For once, your temporary visa would not proceed, which is the most important side for you, but the part that I'd be concerned about is that form the point of view of the project, the money that was lent has no "hard conditions". I mean, does the project just walk away with a failed plan, but with no financial repercussions, hence the risk of you losing the capital invested? It does seem like CanAm offers no guarantee, and they do collect their fees upfront, avoiding the problem that when there is a failed project, there is no money for them to collect. In a 'normal' finance, a bank would ask for collateral, so if the plan fails, there is something (house, other assets) that would help them recover the loan. In the EB-5, there seems to be none.

Not trying to discourage, just lsiting some of the caveats I see.

One thing I'd certainly do if I were in your shoes was to ask for specific references (at least 5-10) within Brazil (assuming is your country of origin) to check them yourself and see what they say about CanAm.

Wish there was a better way for you and your family. I'm sure you have specific reasons for settling in the US, but Would another country, such as Canada be a possibility?

Wish you well.

[dm2b 0]

Hi Gosia & Tito,

Thanks for the great reply, and sorry for the long time in getting back to you (the forum notification regarding your post ended up misclassified as spam and I only saw it today).

More below:

Not a probl;em. It seems you are sharp and well informed; that is very good.

Thanks for the compliment!

I concur that the stats USCIS provides are lousy, generally they don't do such a good job but also we have to recognize that they are underfunded and the volume of matters they have to handle is more than what they can.

Together with this bad stats is the problem that the only stats that are more or less worth their weight is what an organization like CanAm has, and I'm always very suspicious of self-serving stats, espceically when one cannot verify independently.

You make two very good points. Regarding the last one, there's the old proverb that one should never ask the barber how well he does a shave...

I did a little more digging, and it seems that there are very specific types of projects that are steered towards the EB5 program, the kind of projects that would not be as popular in the normal financial community because perhaps of higher risk, lower returns or combinations of several factors that make them not so easy to fund in regular channels. I don't know that this is the case, but in regards to your quote of the prefering to pay 5% in an EB-5 related funding as oppose to 10% to the bank, I have to think that there is some kind of incentive or reason that balances that 5% difference, and I think it is that with the bank, if you fail, the debt is not just disimissed: unless some legal actions like bankruptcy are taken, the debt still would have to be rep-paid. On the EB-5 on the other side, what happens if the project fails to produce the epxected results?

It depends on how and when it fails. If it fails to produce the 10 needed jobs within the 2-year deadline for removing the temporary conditions from the VISA, it means I get no VISA independently of whether I get the $500K back or not. If it fails after that point, I get the VISA but would lose the initial $500K, in all or in part.

For once, your temporary visa would not proceed, which is the most important side for you, but the part that I'd be concerned about is that form the point of view of the project, the money that was lent has no "hard conditions". I mean, does the project just walk away with a failed plan, but with no financial repercussions, hence the risk of you losing the capital invested? It does seem like CanAm offers no guarantee, and they do collect their fees upfront, avoiding the problem that when there is a failed project, there is no money for them to collect. In a 'normal' finance, a bank would ask for collateral, so if the plan fails, there is something (house, other assets) that would help them recover the loan. In the EB-5, there seems to be none. Not trying to discourage, just lsiting some of the caveats I see.

You are 100% correct. In fact, the law specifically *forbids* an EB5 project of offering any warranties: the money *must* be "at risk" or there's no VISA.

One thing I'd certainly do if I were in your shoes was to ask for specific references (at least 5-10) within Brazil (assuming is your country of origin) to check them yourself and see what they say about CanAm.

This is great advice, and believe it or not, it's something I had not thought of. Will do as you say.

Wish there was a better way for you and your family.

Yep, me too. The more I learn about the EB5 VISA, the less comfortable I become :-/ But for us it indeed seems the only game in town.

In fact, until a few months ago I was considering moving under the L1-A VISA: I'm an entrepreneur in Brazil, so theoretically it would be a matter of opening a successful branch of my company in the US. I've investigated the matter and found that what they consider "successful" is *WAY* out of my league: in a recent case, they denied renewing the temporary one-year VISA (it wasn't even the green card) for the manager of a company whose new US branch had generated more than USD 1M in sales in only 10 months... USCIS had to be brought to court to revert that. And other similar cases abound, unfortunately...

I'm sure you have specific reasons for settling in the US, but Would another country, such as Canada be a possibility?

Well, many reasons, but to keep it short:

1) We really *love* the USA; we like Canada too, but we like the US so much better (the weather, the variety, etc).

2) We understand that the cost of living in Canada is much greater than in the US;

3) It's not easy to immigrate to Canada either: they used to have a program where one could invest CAN 800K in government bonds (so practically zero risk), receive the same amount after 5 years and get a permanent VISA, but the program has been suspended... :-/

4) We see a lot of Canadians trying to immigrate to the US, so there must be other reasons too ;-)

Wish you well.

Ditto to you, my friend. And again, many thanks for the great advice.

Cheers,

--

DM2B.

[Boiler 45,907]

Sounds like you are too risk adverse for the EB5, not for everyone, you do not have to use a scheme BTW.

[dm2b 0]

you do not have to use a scheme BTW.

Uh? "A scheme"? What do you mean?

[Boiler 45,907]

CanAm for example.

[Gosia & Tito 199]

Uh? "A scheme"? What do you mean?

Scheme is British for plan or offer in this case. The US English is more like a scam.

[Gosia & Tito 199]

Hi Gosia & Tito,

Thanks for the great reply, and sorry for the long time in getting back to you (the forum notification regarding your post ended up misclassified as spam and I only saw it today).

More below:

Thanks for the compliment!

You make two very good points. Regarding the last one, there's the old proverb that one should never ask the barber how well he does a shave...

It depends on how and when it fails. If it fails to produce the 10 needed jobs within the 2-year deadline for removing the temporary conditions from the VISA, it means I get no VISA independently of whether I get the $500K back or not. If it fails after that point, I get the VISA but would lose the initial $500K, in all or in part.

You are 100% correct. In fact, the law specifically *forbids* an EB5 project of offering any warranties: the money *must* be "at risk" or there's no VISA.

This is great advice, and believe it or not, it's something I had not thought of. Will do as you say.

Yep, me too. The more I learn about the EB5 VISA, the less comfortable I become :-/ But for us it indeed seems the only game in town.

In fact, until a few months ago I was considering moving under the L1-A VISA: I'm an entrepreneur in Brazil, so theoretically it would be a matter of opening a successful branch of my company in the US. I've investigated the matter and found that what they consider "successful" is *WAY* out of my league: in a recent case, they denied renewing the temporary one-year VISA (it wasn't even the green card) for the manager of a company whose new US branch had generated more than USD 1M in sales in only 10 months... USCIS had to be brought to court to revert that. And other similar cases abound, unfortunately...

Well, many reasons, but to keep it short:

1) We really *love* the USA; we like Canada too, but we like the US so much better (the weather, the variety, etc).

2) We understand that the cost of living in Canada is much greater than in the US;

3) It's not easy to immigrate to Canada either: they used to have a program where one could invest CAN 800K in government bonds (so practically zero risk), receive the same amount after 5 years and get a permanent VISA, but the program has been suspended... :-/

4) We see a lot of Canadians trying to immigrate to the US, so there must be other reasons too ;-)

Ditto to you, my friend. And again, many thanks for the great advice.

Cheers,

--

DM2B.

Not a problem as before.

As I said, you seem to be well informed and are considering pros/cons, as you should. I personally wouldn't risk half a million unless I can afford it without much or no pain.

As I also said, I think you should check with references, and one more thing, CanAm would only give you references of success; but possibly those would connect you with some that were not so succesful. Of the CanAm references, I'd insist of at least 50% in the past 1-2 years; and if possible with a total worth similar to yours; if you can feel ok with giving them that kind of info, but maybe ask them for 2-3 ranges in which you are in one, without revealing which one. Why? Because if i had 20mill, risking 500 thousand is not as big as if I had only 1 mill.

I did know about the $ being at risk for the visa, but there are levels of risk. I really wish USCIS would be more transparent in publishing complete results of all projects, with return results, etc. And being cynical, I have to think that if they do not, perhaps the results are not as good as to encourage others to invest in the program.

In any case, good luck with your decision, and wish you well.

[Jaroslav111 0]

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[K1horizon 0]

Hello DM2B,

I too am looking intoinvesting with a regional center, and I'm faced with the same doubts as you. I have seen Canam's track record on their site, but like you, I don't know if it's accurate or not. One financial advisor who seems to have a fairly good reputation with EB5s did write on another forum that after talking to clients, lawyers, etc, he found that only 6 RCs had given permanent green cards, and of those 6, only 3 had returned the money partially. Note, he said partially. And he did name the RCs. This goes against Canam's self professed track record of returning the capital 100%. Not sure who to believe.

I don't know his agenda for saying this in a forum being that he's involved in assessing projects for all of the RCs, but I sensed he knew a lot about the process, its history, and the economics involved. I did exchange emails with him and he confirmed what he had written, but because I wasn't his client, he didn't advance much more.

I am looking for other people who are thinking about investing in the EB5 via a RC or who have so already, Hopefully we could all learn from each other. And like you, I'd rather not lose 5k either.

[dm2b 0]

Hi K1Horizon,

I too am looking intoinvesting with a regional center, and I'm faced with the same doubts as you. I have seen Canam's track record on their site, but like you, I don't know if it's accurate or not. One financial advisor who seems to have a fairly good reputation with EB5s did write on another forum that after talking to clients, lawyers, etc, he found that only 6 RCs had given permanent green cards, and of those 6, only 3 had returned the money partially. Note, he said partially. And he did name the RCs. This goes against Canam's self professed track record of returning the capital 100%. Not sure who to believe.

I can say that I've dug deep into CanAm's track record, and what I found, among other factors, was enough to convince me not to invest with them.

I don't know his agenda for saying this in a forum being that he's involved in assessing projects for all of the RCs, but I sensed he knew a lot about the process, its history, and the economics involved. I did exchange emails with him and he confirmed what he had written, but because I wasn't his client, he didn't advance much more.

I've also seen such a post, don't know whether we are talking about the same post, nor the same person.

I am looking for other people who are thinking about investing in the EB5 via a RC or who have so already, Hopefully we could all learn from each other. And like you, I'd rather not lose 5k either.

I'm sending you a PM so we can talk about all this more privately and later publish (or not publish) here what we are both confortable with, for the benefit of all.