Expert due diligence helps you evaluate the likelihood of success

Here’s how our due diligence evaluates the likelihood of success. Success is defined as getting your Green Card and the timely return of capital.

• 1. Likelihood of petition approval

  Likelihood of petition approval This refers to the Form I-526 application.

  • Is the business plan credible, with reasonable financial projections and compliant with “Matter of Ho” (a precedent-setting EB-5 court case) guidelines?
  • Will the EB-5 capital raised be placed “at-risk” and remain “at-risk” until the end of each investor’s conditional residency period?
  • Is all bridge financing in the project temporary in nature?
  • Is all the EB-5 capital being used for qualified expenditures related to job creation?
  • Are job creation inputs modelled correctly, reasonable, and do they align with investor’s timeline?
  • Is job creation sufficient to meet the needs of all investors?
  • Is third-party corroboration of the budget consistent with industry standards? Is the timeline reasonable?
  • Does the investor’s role in the New Commercial Enterprise (NCE) meet EB-5 visa requirements?
  • Confirm there are no guarantees of return of capital (unless I-526 petition is denied).
  • Confirm regional center designation including the project’s industry and geographic area.
• 2. Likelihood of removal of conditions

  Likelihood of removal of conditions. This refers to the Form I-829 application.

  • Is the required funding in place or highly likely to be in place for completion of the Project?
  • How will the project be funded if EB-5 financing is not fully procured?
  • Has the Project received all non-EB-5 funding commitments?
  • Does the Project developer control the Project site through ownership or a lease agreement?
  • Has the Project budget been finalized and a guaranteed maximum-price contract executed with the general contractor, so that the Project budget is not likely to increase as the Project moves forward?
  • Does the review of the Project’s budget and the to-date expenditures confirm that the EB-5 Project is progressing as expected?
  • Do construction status reports reveal that delays have occurred, and if so why?
  • Has the Project received all necessary approvals to commence construction?
  • Does the EB-5 loan agreement require a completion guarantee, and what remedies are available in the event of the Project developer failing to complete the Project?
  • Does the Project developer have industry experience to execute the business plan?
  • Are the required jobs being created through construction or operations, or a combination of the two?
  • Are the projected jobs sufficient to meet job creation requirements of all EB-5 investors with a reasonable job cushion?
• 3. Assess likelihood of return of capital

  • Is there an I-526 refund-guarantee in the event of a denial?
  • Have financial statements of guarantor been reviewed to ensure funds are available in case of a refund?
  • How frequently are payments made to investors related to return on investment (ROI)?
  • What is the corporate structure and the relationships between entities involved in the transaction?
  • In case of default, what steps would be required to enforce investors’ rights in order to get access to the Project’s assets?
  • Is the EB-5 loan secured or unsecured? If it is secured, will the EB-5 loan have a lien on the project’s assets, and has it been recorded?
  • Has the senior loan been finalized and concluded? Has consent been received by the senior lender? We review the inter-creditor agreement to determine what remedies are available to the EB-5 lender in the case of default.
  • Are the assumptions used in the cash flow schedule reasonable?
  • Are the contingency reserves reasonable?
  • Is there an interest reserve to pay interest expenses to all lenders?
  • Are the assumptions used to project revenue and expenses reasonable?
  • Is the projected valuation of the project sufficient to refinance the senior loan and the EB-5 loan upon maturity?
  • Is the value of project sufficient if the net operating income is reduced by 10-30% (sensitivity analysis)?
• 4. Evaluate controls & investment protections

  The following is all part of the due diligence report an investor can download:

  • Is there an escrow? What are the terms pertaining to release from escrow to the New Commercial Enterprise?
  • Has a third-party fund administrator been engaged, and is the fund administrator a signor on the NCE’s bank account?
  • Has a third-party monitor been engaged to confirm project completion and to authorize the release of funds by the EB-5 investment company?
  • What is the form and frequency of reporting provided to investor?
  • Are annual audits available?
  • Are there any conflicts of interest and how are these interests mitigated?
  • Has the NCE, Job Creating Entity (JCE), and Regional Center been duly organized and in good standing?
  • Has the most recent Form I-924A been filed by the regional center?
  • Does the project have any I-526 approvals? Any I-829 approvals? How many jobs have been created to-date?
  • We conduct background checks on management and any people who will have access to investor funds.
  • We confirm facts about the ownership of the project, entitlements granted, and liens filed.
  • We conduct a site visit and meet with management of project and the NCE.
  • We require completion of bad actor questionnaires by management.
• 5. Documents we review

  • Offering memorandum
  • Subscription agreement
  • Escrow agreement
  • Fund administration agreement (if applicable)
  • Certificate of formation for New Commercial Enterprise and NCE Manager
  • Certificate of good standing for NCE and NCE Manager
  • Operating agreement of NCE Manager
  • Business plan
  • Economic impact analysis
  • EB-5 loan/equity agreement
  • Security agreement (if applicable)
  • Inter-creditor agreement (if applicable)
  • Marketing materials used by agents/brokers
  • Contact information for securities counsel, immigration counsel, economist
  • Certificate of formation for Job Creating Entity (JCE)
  • Certificate of good standing for JCE
  • Operating agreement of JCE
  • Market feasibility report
  • Appraisal
  • Senior financing agreement
  • Bridge financing agreement
  • Other financing agreement
  • Developer equity commitment
  • Land purchase/lease agreement
  • Franchise/Management agreement (if applicable)
  • Financial projections
  • Projects cash flow/construction draw schedule
  • Balance Sheet of JCE (if project commenced)
  • TEA designation letter
  • Regional Center approval letter
  • Certificate of formation for Regional Center entity
  • Certificate of good standing for Regional Center entity
  • Latest copy of I-924A
  • Draft form D (if applicable)
  • Completed bad actor questionnaire by NCE management
  • A list of any *material litigation or judgements within the past 10 years in which the NCE and Regional Center (including affiliated entities) was involved, directly or indirectly.

  Material litigation is defined as any matter outside the ordinary course of business operations with at least $100,000 in dispute.