What Is Business Common-sense Due Diligence? What About Investing In A Regional Center?

What Is Business Common-sense Due Diligence? What Does That Mean And What Needs To Be Done?

For Attorney Mark Ivener, business common-sense due diligence is not enough. He says that some clients feel that they have business common-sense after they review a prospectus, which could be of 100 to 200 pages. They have their own questions and they have investment experience; they consider that enough because they don’t want to spend another $5,000; they want to pick their own project.

Since most of these cases are approved anyway or there is a very high percentage and people see the statistics, they feel, “Well, I’ve already paid enough, I don’t want to pay anymore”. So, again, for some people, it’s enough if they have substantial investment, real estate and financial experience.

Ivener had a client recently who did that and asked the best questions, read everything, was very precise on the questions that he had and asked questions Ivener wouldn’t even have known to ask because client was in banking, so he had that past experience. So he did his complete due diligence as he would have done had he paid $5,000 to do it, but that is an isolated example.

What Are Some Questions That Investors Should Consider When Considering Investing In A Regional Center?

Questions that are important relating to the regional center, this is separate from the actual investment. So, you want to get bank reference from the EB-5 general partner; you want to do a Dun and Bradstreet report on the partners; you want to see if there are any past losses against the regional center of the partner; any past criminal conviction; how long the EB-5 company have been in business; if they are new into EB-5 because there are over 700 regional centers?

There are a handful that have been doing business since mid-late 90s, so those have long-term records. For people who want the list of those, Ivener gives them the list of those, but it may be that somebody doesn’t want that type of project that they have and so they find a regional center that maybe was approved a year ago, that doesn’t have I-526 approvals, doesn’t have the long immigration track record; it doesn’t mean they can’t be good but you have to find out what they did before and you have to be more careful on those than you do on those who’ve been in business for a long time.

One of the more important specific questions is what precautions do they take to monitor job creation, and what steps are taken if they see down the line because this is the long term, this is once the project is up and running. So if you’re doing a hotel, it may take a year or more to raise the money, another couple of years to build it and then it’s open. It could be an apartment building; it could be an office building. You want to find out how they monitor job creation and what they do if they see the requisite job creation has not or may not occur or will not occur on time and what their plan B is.

So, these are all that people should look for. Attorney Mark Ivener has his due diligence questionnaire that he gives all clients, or anybody can download it from his website. The questions are just mentioned there along with all of the other ones that most clients are concerned about, and then a lot of people have their own questions.

Ivener tells them this is just a starting point; you can have your own questions and add those to this list and then you’ll feel more comfortable about making the investment and following through.

If you want information regarding Business Common-sense Due Diligence Or Investment In The Regional Center, call the law office of Mark Ivener for a free initial consultation at (310) 477-3000 and get the information and legal answers you’re seeking.