How do we select a project?
As a regional center we get project applications almost daily. We are very careful in choosing a project since we want to make sure the project is a sound investment opportunity with the least possible amount of risk to the investor. There are four parts of our project analysis;
We look into the development team, their experience, financials and success rate. We Analyze the initial project financials and assumptions provided by the developer. We do market research to understand the supply and demand ratios for the project in their specific area. We require the project to be under construction, land purchased, full plans completed, and financing arranged. If the above is satisfactory we inform the developer that we are ready to move to the next step.
In this step, our team of professionals and board of advisors analyze the following documents: market study report from a well-known market research company (JLL, Douglas and Elliman etc.), economic feasibility study by a well-known third-party company (JLL, Douglas and Elliman stc.), appraisal, financial proformas, evidence of titles, copies of contracts (and closing statements) and deeds, copy of survey, and (if a development assemblage) detailed Tax Map outlining fee owned properties, air rights and inclusionary air rights. At this point we also have the economic impact study that calculates the amount of jobs to be created which determines the amount of EB5 funds to be raised.
Our professionals will also review verification letters from the construction company affirming hard costs, soft costs, FFE, and A&E along with a Gantt chart timeline; schematics, unit layouts, floor plans, construction plans, renderings and drawings (schematics and conceptual plans needed at the onset of the raise and final renderings required prior to funding.
Bios of the architect of record; zoning opinion from a respected zoning attorney and massing studies from architect; environmental studies phase I and II appraisal of property from an authorized independent appraisal firm and plans for loan repayment supported by proper documentation.
Details and terms of the current debt on the property and whether the developer is planning pay it off with either a mezzanine loan and or the senior loan; full line item breakdown of land cost, closing costs and tenant buyouts; entity structure and organizational chart; detailed proforma and construction budget; 5 year excel proforma required and a corresponding quarterly draw schedule detailed construction timeline and Gantt chart from the construction company depicting a minimum of 24 months for the construction period.
If all the above is provided and our analysis concludes the project is a great investment opportunity, we start preparing the business plan and offering documents for the project and are ready to submit it to USCIS for approval.