Is Renting a Regional Center the Best Option with Samuel B. Silverman – Episode 41
Is Renting the Best Option?
Samuel Silverman explores what is behind renting a Regional Center
Mona, Mark and Samuel Silverman of EB-5 Affiliate Network talk about renting an EB-5 Regional Center and discuss why it may bring developers and investors the best option.
Samuel Silverman leads EB-5 Affiliate Network (EB5AN), an award winning EB-5 consulting firm that has extensive experience structuring EB-5 projects across the United States, and also operates 15 regional centers covering 21 states and sponsors high-quality EB-5 projects. Sam has considerable real estate development, management, financing and brokerage experience in US and China.
“Policy changes on regional center will drive more business to us and allow us to continue to grow!”- Samuel SIlverman
Who is EB-5 Affiliates?
EB5AN is the preferred vendor for new EB-5 regional center set up and for access to approved EB-5 regional centers. Immediately access EB-5 regional centers in 21 States and Washington D.C.
What do EB-5 Affiliates Network do?
EB5AN handles the operation of the regional center, maintaining compliance with UCIS, documentation required to bring projects to market, also working with agency brokers overseas.
Determining if Renting or Affiliating is the Best Option
- Time
Application for Regional Center can take months, and after the application is submitted, the USCIS approval process can take more than a year. For some developers, this rather lengthy process may be fine; for others, this is unacceptable.
- Cost
While filing for regional center designation itself costs $6,230, the additional costs to prepare the necessary documentation (e.g., comprehensive project business plan, economic report, transactional documents, etc.) can become prohibitive.
- Ability to sponsor project avoiding the time and cost of applying for a new regional center
Renting a regional center, on the other hand, can be a great way for a developer to enjoy the benefits of sponsoring its project through a regional center while avoiding the time and cost involved in establishing a new regional center.
What is the EB5AN Regional Center Rental Model?
- Professional Project Underwriting
Identify, underwrite and structure EB-5 projects that maximize the likelihood of a successful visa application outcome, while providing capital to qualifying development projects that create US jobs.
- Affordable and Transparent Pricing
EB5AN collects upfront fee of $20K per project to join and one-time per investor flat fee
- Transparent Pricing
Transparency to all collected fees.
- All project undergoes due diligence
EB5AN spends significant effort up front to ensure that all projects meet the team’s high underwriting standards
How to select a Regional Center to rent.
- Identifying Potential Regional Centers
Know the regional center’s geographic capacity and its industry scope
- Conducting Careful Due Diligence
Developers should only consider reputable regional centers with strong track records of success, professional management, and reduced liability.
- Understanding Rental Terms
Developers should only consider reputable regional centers with strong track records of success, professional management, and reduced liability.
How is EB5AN able to charge lower than other RC rental?
EB5AN approach is transparency. When they rent their regional center they charge an upfront fee of $20 000 and an investor fee of $5 000, one time per investor, keeping everything consistent and all the prices are published.
What is your opinion regarding the 5 to 6 % charges of other RC to raise capital?
A lot of agents in China and overseas is paid 2-3% annually per investor so a lot of clients will choose to be a general partner in finding investors instead of paying RC with 5 to 6 % all in.
By renting an RC the client has full control on how much he be paying for the agents instead of 5 to 7 % all in. And be in full control He can choose to pay half say 2-3% to his agents.
How do you qualify projects coming to EB5AN?
- Answer Intake forms and Diligence questionnaires to get preliminary information
- and thenreview the entire set of offering documents
- run background checks on investors
- focus on the immigration and financial risks profileof the project
Consequences of RC termination for an investor and consequences for a project renting that regional center
USCIS has terminated EB-5 regional centers numerous times in the past three years.
- Lack of economic activity
The regional center no longer promotes economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment.
- Element of wrong doing or fraud
Fails to demonstrate that its projects will create jobs in verifiable detail based upon a business plan and economic analysis that employs reasonable methodologies for estimating jobs
- National interest
Its activities violate and demonstrate a significant disregard for the immigration laws of the United States.
- Non-Compliance
The regional center fails to submit required information
How do EB5AN Comply with USCIS policies?
EB5AN ensures the following to keep on track and compliant to USCIS Policies to avoid license termination:
- Promote economic growth required through Job Creation
- Filing of Annual Form I-924A requirement to demonstrate continued eligibility
- Quarterly compliance checklist signed and processed by each of EB5AN projects
Effect of RC termination to EB5 investors
Termination can really impact negatively on investor’s immigration status, while the developer sponsoring the investor looks for an RC to sponsor the project, we do diligence review and after finding the project comfortable and viable so whatever causing the noncompliance is resolved and then we were able to extend sponsorship and save the investor from the termination of their immigration status.
Have you ever picked up projects after the 526 has been approved which is from RC that was terminated?
Yes, we have done it both ways. Were Investor are PENDING 526 applications were not yet been approved. And also with investors who have gotten their 526 and filed their A29.
How will the upcoming policy changes, due requirement, and increased cost for RC impact EB5AN?
There are the number of policy changes being discussed for RC going forward.
- Increased transparency and reporting requirements on annual basis.
This is positive for eb5an since they are already going above and beyond what is required in terms of strict reporting requirements
- Increased business process and Increased additional annual fee 10 to 20k per RC
This will be a positive overhaul. Will limit the number of licenses in circulation. All active projects will shoulder the additional fee pro rata since we have an agreement that any increase in USCIS fee will be split per project. Any of those fees will build as a directly passed on to our projects so it will not negatively impact our capability and financial performance.