EB-5 for Real Estate Investors

EB-5 for Real Estate Investors


Since the housing crash of 2008, it has become more difficult for investors to obtain traditional real estate loans from lenders for a variety of reasons. However, there have been a number of alternative financial sources that have been utilized as a result. One of the more popular versions is the EB-5 Visa program that allows foreign investors to put capital into the US and in return receive a green card so they can come and live in this country.

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What is an EB-5?

EB-5 is a program that allows citizens of a foreign country to invest from $500,000 to $1 million in a US business venture and create at least ten full time jobs culled from US workers in order to obtain a green card. The program was put into place in order to encourage investment in the US and to provide another path towards earning a green card for those who want to live in the US.

Until 2007, the EB-5 program only numbered in the hundreds in terms of foreign investors. By 2013, it has expanded to go beyond 7,000 which make it a growing market to find investment capital. When you consider that about 3,000 applicants to the EB-5 program have invested about $1.5 billion in the US, it is easy to see that their contributions represent a real opportunity for real estate investors.

The Advantages of the EB-5 Program

There are a number of advantages for real estate developers that the EB-5 program applies. Arguably one of the best reasons is to take advantage of the low interest rates that come with no personal guarantees. There are interest rates as low as 2% and will rarely get above 6% when it comes to investments from this program. Furthermore, the standard term of the EB-5 investment is about five years and includes two single year options for extensions.

However, it must be noted, because of timing issues that real estate developers need to be patient or simply not need the capital investment for at least a year. In addition, the source of the EB-5 money may be somewhat unpredictable since it is usually a single investor. So, you will need to do the work in order to get the funds. Considering all the advantages that this program provides, it can work wonders for the right type of project.

How to Get EB-5 Investors Involved in Your Project

It all starts by making the right connections. The developer will need to create a connection with a foreign investor looking to invest in a real estate project, which is arguably the most popular type in this particular area. If you take the time to learn about this type of investing and are willing to work with someone from outside the US who has a vested interest in seeing your project succeed.

Be sure to get your information from a reliable source so that you can make the right connections in getting this type of funding for your real estate project. For real estate investors, the EB-5 program represents a real opportunity to get your project off the ground if you have a little patience in working within the system.

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