Episode 191: The Psychology of Investing only $500,000!
What’s the actual value of the asset that is there and what’s the plan for the exit? And what’s going to happen in a worst case scenario. So investors really need to consider, because that’s definitely going to impact their ability to get their capital back. – Manuel Ortiz
Manuel Ortiz, Vice President of Global Business Development at First Pathway Partners, is a seasoned professional in the EB-5 industry with over a decade of experience. Throughout his career, Manuel has worked with investors from more than 40 countries, offering a diverse and extensive understanding of the EB-5 landscape. With a track record of assisting over 1,000 individuals, Manuel’s expertise in investment psychology and the changing dynamics of the EB-5 program is unparalleled. His insights into the mindset of investors and the challenges they face in navigating the evolving investment climate provide valuable guidance for potential BE-5 investors. As a trusted voice in the industry, Manuel’s expertise and knowledge make him an excellent guest for anyone looking to gain a deeper understanding of investment psychology within the EB-5 program.
With ever-looming fears that USCIS may hike minimum EB-5 investment amounts, EB-5 Investment Voice discusses in todays podcast the investor mindset in in parting with funds beyond $500,000.
Together with our EB-5 experts, Mona Shah and Rebecca Singh, special guest Manual Ortiz, Vice-President of Global Business Development at First Pathway Partners, shed light on the history of the $500,000 investment and the ramifications of $800,000 investment. Mr. Ortiz has over a decade of experience in the EB-5 industry, working with investors from more than 40 countries and expertise in investment psychology and the changing dynamics of the EB-5 program.
The minimum investment requirement for an EB-5 petition has long been $500,000. Thanks to the implementation of the Reform and Integrity Act (RIA), this investment amount rose to $800,000. What impact has the EB-5 industry felt with this change in investment amount and will there be another increase in investment amount in the near future?
Join us in this latest exciting episode as our experts and special guest discuss the psychology of the investment amount of “$500,000” and how the increase in investment amount has affected investors and the EB-5 industry!
Some highlights from the episode:
Mona: “It was $500,000 for so many years, since the 90s.”
Rebecca: “Yes, so many years without [changing] even though consumer price index has been going up, but EB-5 stayed the same until 2019.”
Rebecca: “EB-5 was never intended to be $500,000. It was supposed to be a million dollars but then all of the early regional centers wanted to compete with the big competitor at that time, which was Canada. And Canada [. . .] was at $450,000. So the big regional centers had to look around to find projects in TEAs.”
Manuel: “Banks aren’t lending as much as they were previously. So that puts pressure on EB-5 rates.”
Mona: “We’re not going to see this money go down as much as everybody wants to the good old days of $500,000, because the EB-5 Reform and Integrity Act has said that it’s going to periodically increase.”
Manuel: “The investment amount going from $500,000 to $800,000 means that you are raising from a little bit of a smaller population of people. And so the timing of the funding for each particular project is critical in this.”
Manuel: “The challenge for Eb-5 investors today is really cutting through the clutter, because there is so much information out there that some of it’s just misinformation.”
Rebecca: “Funds have increased [and so investors] are more cautious of where they’re spending it. Investors are savvy now. I think a lot of them are hesitant or making sure that they’re conducting their due diligence.”
Manuel: “I think you’re going to see [. . .] where demand is going to change. And I think Latin America is a really big area. Afrida is another big market. And so I think there are places where you’re going to see investor demand.”
Mona: “There is no psychology for the new markets. It’s the old markets who remember the $500,000, whereas the new markets don’t know any better or for them, it’s just accepted fact. And lets face it, it’s still a lot cheaper than Canada, the UK, and a number of other countries.”