EB-5 Project Due Diligence in Covid-19 era

By Mark Davies, Global Chairman, D&A

While the pandemic was not predictable economic shocks such as the mortgage crisis or just a plain economic downturn are.

Without making any comment at all on any specific EB-5 project, it is true that investors need to make sure that proper protections are in place when investing in any project. Many, not all, EB5 projects simply do not have the protections in them that a normal non-EB5 investor would demand.

There absolutely are real estate EB-5 projects in the market that are doing well, such as pre-leased warehouses or office buildings that are pre-leased to “AAA” clients.

There is far more to EB-5 project review than EB-5 compliance.

It is quite common to see EB-5 projects that have no language protecting clients from future subordination of the EB-5 position. In pre-leased commercial projects immigration lawyers often fail to take “due diligence” step 101 and read that lease on behalf of their client.

There are absolutely steps clients facing challenged projects must take now to protect themselves. Workouts 101.

Also, consider the position of a developer who is also a Regional Center in a workout or bankruptcy. Can they effectively represent the interests of EB5 investors?

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The EB-5 Immigrant Investor Visa Program offers a direct route to a US Green Card. The minimum investment requirement is $900,000 and other conditions, such as job creation, apply. The EB-5 Visa is exempted from President Trump’s current “immigration ban”.

Contact me for more information.

Nothing in this blog constitutes legal advice, please contact Davies & Associates for a consultation with an attorney

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