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The EB-5 Visa is a remarkable opportunity for foreign nationals to become a green card holder through investment in the United States economy. However, some in the media have cast a negative light on the industry with stories of fraud and manipulation. Attorney Carlos Colombo, an experienced immigration attorney with years of experience representing investors who has represented investors in a variety of EB-5 investments including Orlando City Soccer, Residence Inn by Marriott as well as a variety of projects through CMB Regional Centers as well as other Regional Centers, shares his thoughts concerning the risks and rewards of the EB-5 process.

In a recent podcast with Justine Assal and Dominic Pickering of Orb International and International Real Estate Radio, Mr. Colombo sits down to discuss the realities of the EB-5 Visa. He discusses the importance of selecting the proper regional facility, red flags to be aware of as well as the benefits and restrictions of the green card(s) that can be obtained through the process. Click play below to learn more about the EB-5 Visa.

Video Transcription

Welcome to another edition of National Real Estate radio, I’m Justine [last name] and I’m Dominic [last name] and today we have an interview from Carlos Colombo, from Colombo and Hurd law firm to discuss EB5, the good, the bad and the ugly. I think it’s a subject that needs to be taken away from all of the other immigration visas because there’s so much to learn and there is so much misunderstanding with it. So with that, welcome Carlos.

Thank you.

Talk to us a little bit if you would please, what is EB5?

So EB5 is an employment-based, [inaudible] category visa, it’s actually for permanent residency in the US, based on investment. So a lot of times like you said, EB5 is misunderstood because people believe that the original intention of EB5 was to create investment in the US and through that investment you would get a green card or a US permanent residency. But the reality is that EB5s are based primarily on the creation of jobs. So that’s why it’s called EB, employment based. So the main requirement of an EB5 is that the investment that the foreign national is going to be providing to the US creates jobs. People misunderstand that and believe that it’s an investment-based visa. So there are different kinds of EB5s, you have EB5s through regional centers, or you have EB5s through your own company and your own investment. What is the reality of EB5? We have to understand the reality of how EB5s work and the history of EB5s because there’s a lot of misinformation out there, unfortunately mostly spread through media stories that love to create drama and focus on the negative things when most attorneys and most regional centers are trying to do the right thing with EB5.

Well that’s good to hear. So what are the risks and the rewards of EB5?

The reward obviously is getting your green card. When people look at EB5 it’s because they want to live permanently in the United States. And because of our current immigration system, there are a very limited number of ways that a person can legally move to the U.S., if you don’t have a strong, close family relationship, if you don’t have a very significant resume and a company willing to sponsor you, it’s difficult to get that green card or residency. So because the immigration system in the U.S. has gotten more and more difficult in the last ten years, EB5s have grown.

You know it seems as though it’s such a catchphrase nowadays, every developer you see is establishing an EB5 everybody that you talk to is getting an EB5. How long has the EB5 actually been around?

It’s been around since the early 90s, but it was not utilized. Why? Because other visas like L1s, labor certifications, other methods of immigrating were easier for people, you could have a small company, open up a branch, and most likely you would get your green card. That’s not happening anymore, also because a lot of developers and companies saw EB5 as a potentially easy way to finance their projects. In reality that’s not really true, and that’s where a lot of the misunderstanding has occurred. Most projects in EB5 need to create enough jobs. So just because you have a real estate project, for example, it doesn’t mean it’s going to create enough jobs to justify using EB5.

So let’s talk about regional centers and what they are.

So first, statistically, more than 85% of EB5s are done through centers. A regional center is a company, a private entity, that is approved by immigration to accept for an investment, a project through EB5 and essentially give out the green cards. So if you look at a regional center they can have different models. They can have an equity model or a loan model. So if you have a loan model regional center it’s essentially like a mini bank, giving a loan to a project. If you have an equity model, it means that that regional center is investing in some kind of project and you are a limited partner, a small investor within that larger regional center.

And is one necessarily better than the other?

It depends, it depends on the goals and expectations that an investor may have. Some investors like to take a little bit more risk or a higher return, so an equity investment may be more attractive but they need to understand that there has to be some kind of exit strategy if they want to get their money back. Unfortunately, historically a lot of equity models have not had very good exit strategies, and so that’s where I think a little bit of the misunderstanding around EB5 has arisen, is that investors were not really looking into the exit strategies for the investment. Loan models, on the other hand, have a fairly clear exit strategy because it’s a specific period, the term of the loan is very specific, six years usually. And in that six years the business has to repay that loan to the regional center and to the investors get their money back that way.

Okay so where all the misinformation is, before we go into that, because I want to talk further about it, explain if you would, this is obviously done with the intention to get a green card at the end of it. How long does it take, from the beginning of the process to where you get a green card, and then let’s discuss success rates and pulling your equity out.

So currently it takes about a year to get a green card through the EB5 process, that green card is going to be conditional for two years. Why? Because immigration has that regulation in place to avoid fraud, to make sure that the investment was truly made, so they’re going to review that in 2 years, and also to make sure that the jobs were created, that the project created the jobs it said it was going to create. If neither of those things happened, if the investment was not made or the jobs were not created, then you can lose. You can [inaudible] which is why, again, you have to look at regional centers that are historically successful, and know what they’re doing. So I would caution people getting into regional centers with no experience, looking at the professionals that are working with that regional center, the immigration attorneys, the securities attorneys, the economists, to make sure that they have a conservative business plan and conservative projections for job creation. Because otherwise you could lose your green card.

So what are the success rates for regional centers?

When you look at regional centers, the reality is there’s a handful that have a long history and have a successful history.


The good ones have 100% approvals for the most part.

Approvals on the green cards?

On the green cards?

And have shown a track record then that they have not only been able to get their green cards but get all their investors out of that conditional period.

That’s correct. There’s more than 400 regional centers that have been approved by immigration, but again, only a handful are truly successful, because like in any industry where there’s money, there’s always going to be sharks out there. So the bad reputations that some critics placed on EB5, it’s [inaudible – audio is breaking up here] but that’s in any industry. So it’s not unique to EB5, so it shouldn’t be a shock that there are some folks that are trying to take advantage of EB5 investors.

It’s always the few that make a very loud voice for the industry, but I think that’s where the issue is isn’t it that if they’re the only ones having a louder voice, where do we get the education so that we get rid of the fear and we can learn how to do it correctly.

And I think that it’s people like us, we’re experts and we know what we’re doing, and we protect the investor. The good regional centers that have a good reputation want to succeed for the investor and they want to protect the investor. They’re not, when you have regional centers that are controlled by [inaudible] they might be dangerous because they’re not looking out for the best interests of the investor.

Is it always dangerous? I mean is it something you always shy away from or is it something that’s just a matter of being careful?

It’s like any investment, if you’re going to purchase a home you want to make sure it’s in a good area, that it has the potential for developing equity in the future, is there growth potential in that neighborhood, you have to do an analysis, if you don’t…not every real estate investment is going to result in a high return. So any investment you have to do your due diligence. I think primarily because people are looking to get their green card, that’s their first goal in any of these, so often times they ignore their due diligence on the business side.

So talk to us for a minute there are two different levels of investment for the EB5, can you explain the difference between the two? And then I want to go back to what we were discussing earlier about an exit strategy so somebody then has a green card and so they’ve started their exit strategy, how much money needs to go in?

So there’s two types of investments that are qualified, 1 million dollars in any area in the United States, or 500,000 in what is called a targeted employment area, which is an area that has been designated by the local government of every state as an area of high unemployment or a rural area. The reality is, most EB5s, 95% or more, are 500,000 dollar EB5s because there’s plenty of areas that qualify as TEA today, that may not have been the case 10 years ago, but today it is. And that’s because the way that targeted employment areas are calculated have allowed for basically joining of different areas into one, so you could have a very very nice area with low unemployment and the trap next door can have a little bit higher unemployment, and if you combine them, then you can get a 500,000 dollar area. So for the listeners, they shouldn’t think that because they’re doing a 500,000 dollar investment, that it’s a bad area, that it’s a rundown area, there’s plenty of EB5 projects in very, very nice neighborhoods.

It doesn’t necessarily mean that just because you’re doing an EB5 visa that you are spending 500,000, and you just need to write that off because this is not a business model, this is just a visa model. So what you’re saying is that there’s a good chance that you’re going to get your money back at the end of it?

It depends, I mean people need to understand that any time you make an investment, there’s risk that you could lose it all. So there are never guarantees in life, especially when you’re making an investment, and this is not supported directly by the U.S. government, guaranteed by the U.S. government, that’s a misconception some people have, so they think that [inaudible] in some way by the U.S. government, this is approved by the U.S. government, but it’s not guaranteed in any way on your return. However, good regional centers have exit strategies, that’s something that the EB5 community has demanded over the past few years. That regional centers have a clear strategy for people to get out of that investment after a certain period of time. The reason why it usually has to be 4, 5, 6 years is because between the time you get your green card, you remove those conditions after two years. That’s easily going to be a three year process, and you need to give the regional center the time to create the jobs. Also, these regional centers are[n’t] businesses, and they need to make money, because otherwise they wouldn’t be doing this, so you have to give all parties what they want, and at that point, you can have an exit strategy. So in the loan model situation, it’s usually a six year term because that’s enough time to get all the jobs created, make sure that everyone that invested gets their permanent green cards, at the end of the six years the project that the regional center loaned the money to, will repay that loan, has to legally repay that loan otherwise they’re in default, and the investors will get their money back. So a perfect example is you go buy a home and you get a mortgage on that home, the loan that is made by the bank is secured by collateral which is that house. This loan model is essentially the same, you have the regional center being the bank in that example, that is making a loan to a particular project, let’s say a hotel project or an infrastructure project like a power plant. That power plant is the house in the mortgage example, and you have the six years to repay that loan at the end of the six years, if you don’t repay it, the bank is going to take your home, in this case the regional center is going to take whatever collateral was pledged at the beginning. Power plant, the assets of the power plant, whatever it may be. So that model tends to be a little bit more easy for [inaudible] investors to understand it.

Would it be something that if you were looking at this just as a business model, what type of interest or what type of return would you be looking to get?

That’s a good question. EB5s tend not to be investments that are made to make money, so that should be a red flag for a lot of people. If you think you can make millions and millions with EB5 then you’re in the wrong business. The goal of EB5 is to make sure you get your green card and to make sure you get your permanent green card after two years. And try to get your money back. So the regional center in the loan model is going to charge 5, 6, 7% interest rate, extensively lower than a commercial loan in a bank. They’re going to keep the majority of that interest, that’s their business. They’re going to pass on to the investors usually less than 1%. So you’re not going to make money, you’re money is basically going to stay here, and a lot of people look at it and go oh it’s in U.S. dollars, I’m getting 1% a year, it’s not great, but it’s something, and I have my green card. [inaudible] in the next six years, so it’s fairly low risk. It’s fairly low-risk for them so people tend to like that model.

Right, when someone gets their green card, I know that there’s…each visa is a little bit different, but this gets more than one person a green card, does it not?

Yes, so the principle applicant gets their green card, spouse, and children under 21.

And so I think that it’s probably common knowledge when you hear about EB5, over the past few years it’s exploded in Asia, specifically in China. So everybody knows that we’ve got lots of Chinese people investing now and EB5 centers, where do you see around the world this is a great model and we see a lot of people coming in and entering it?

So yeah, China has been, historically, the number one country by far that has investors in EB5, South Korea, but then you have other countries that are growing, India, the UK, and then in Latin American, Brazil particularly, Venezuela has also been a growing market. The BRIC countries tend to be higher populations and where there’s been an accumulation of wealth over the past ten or so years.

Tell us again, for the audience, what are the BRIC countries?

The BRIC countries are countries are countries like China, Brazil, India, that are developing.


Russia is another example, yes.

So what should the professionals that are listening be looking out for in order to promote the EB5.

So if you’re, if you have clients that are interested in EB5, be careful of people that promise too much. Obviously, especially on returns. And work with folks that have a history of doing this successfully. Like I said, most successful regional centers have close to 100% or 100% approvals, for an investor if you have a project like that, the only way you’re going to lose your case is if you have a bad lawyer who doesn’t know what they’re doing, Or a regional center that doesn’t know what they’re doing. If you have a combination of a good attorney and a good regional center, and your money is clean, because that’s one of the things that people have to prove is that their money is from a legitimate source, then you should get your green card. And so if you look at EB5 from a U.S. immigration perspective, it’s really the VIP way of immigrating into the U.S. It’s the red carpet method, you are helping the U.S. economy because you’re helping to create jobs, it has a positive economic impact, and you’re welcomed as an investor to the U.S. So if you’re considering other visas like an L1 or an E2, you have to consider what are your ultimate goals. You want to live permanently in the U.S., and you have the funds to do this, you should strongly consider EB5.

So last point, fair to say then that not all immigration attorneys are well-versed in EB5? Is that correct?

That’s correct. A lot of people talk about EB5, a lot of developers, a lot of attorneys, but when you look at the numbers, I think the highest we’ve ever reached is about 8,000 or 8,500 in a year.


So that should tell you that not everybody that is talking about EB5 is doing EB5.

Certainly does, because you hear a lot of people talking about it you would think that there were more people getting into it. Fantastic interview, thank you for taking the time to speak to everybody. If anybody has any questions, obviously one of the first things that we recommend, well the first thing that you should do is find an immigration attorney that you can speak to and get your clients to and make sure that you have very strong partners, if anybody is interested in reaching Mr. Colombo, you can do so. What would be the best way for anybody to reach you if they wanted to?

If they’re abroad, probably the best way would be through our website which is

Alright Mr. Colombo, thank you very much, we appreciate your time.

We’re going to have to leave it there for this edition of International Real Estate Radio, thanks for listening, see you next time.

Rusten Hurd

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