Real Estate

Q: One of the most effective ways to attract investors is for the business into which they are going to invest to buy and own the real estate in which they will operate the business, rather than merely lease it. This makes the investor feel that the business is more likely to succeed, or, if it fails, the real estate could perhaps be used to establish a second business. Therefore, where part of the investment expenditure is spent on real estate in which the business is to be operated, is it correct that such expenditure is a job creating EB-5 expenditure for which appropriate job creation credits can be obtained. For example, if an investor invests $1million to acquire a building for $900,000 and then spend another $900,000 to renovate and equip as well as fund operating capital for a restaurant, would the entire $1million be considered an appropriate EB5 investment, assuming it otherwise qualifies.

A: This is a simple transfer of real estate with renovations occurring subsequent to the purchase. The renovation and outfitting of the facility will create temporary jobs, and it is possible that a trivial number of jobs could be created by the fees charged for the real estate transfer. Summarily, yes—the $1.8 million could be considered an appropriate EB-5 investment—assuming that the other requirements of the EB-5 regulations are satisfied.

Taken directly from USCIS EB-5 Immigrant Investor Program Quarterly Stakeholder Engagement on May 1, 2012.