EB5 Investors Magazine Volume 7, Issue 1 | Page 53

EB5INVESTORS.COM 51 There are many important cultural dos and don’ts when making contact and following up with Middle Eastern investors. No matter how you approach the client, though, eventually you’ll have to slay the two giant elephants in the room to close the deal. The first is when they say, “Why should I invest $500,000 in American real estate projects when I have far more flexibility and better returns investing at home? How can a green card be worth that much?” The second is, “Why in the world would I take money out of my tax-free Middle Eastern investments and place them under America’s tax regime?” “ 55 % of the HNWIs surveyed across the Middle East said the increasing geopolitical tensions in the region have affected their investment decisions. They may word t hese concer ns more tact f u l ly, but you won’t convince them of the value of your service unless you can answer these two questions clearly and with specific examples. On the plus side, that’s not nearly as difficult as it sounds. You can focus to turn these challenges that scare off other wealth managers into opportunities to broaden your clientele base. the options that U.S. residency grants them, as well as the stability of the U.S. real estate market? According to the 2018 GCC Wealth Insight Report by the Emirates Investment Bank, 55 percent of the HNWIs surveyed across the Middle East said the increasing geopolitical tensions in the region have affected their investment decisions. 1 That number rises to 75 percent among respondents in the UAE wealth management market. CHALLENGE ONE: LOW ROI ON INITIAL INVESTMENT Investing in the U.S. is more than just a safe way to diversify their portfolio; that green card serves as a coveted insurance policy against all sorts of financial t h reat s. Prote ct i ng capit a l from u npred ict able geopolitical risks is a challenge for all international investors, but one that’s easier to guard against when you have permanent access to America’s financial markets, visa-free travel for you and your family, and a stronger legal standing in U.S. courts. Avoid the urge to gloss over the details or hype up the rare successful outliers. Instead, impress them with your knowledge of both the risks and big picture rewards. The cold, hard reality is that the average EB-5 visa applicant investing in regional centers will see little or no return, let alone one that exceeds inflation. Your typical client’s initial investment isn’t going to go into a high-dividend REIT, property speculation in a hot market like San Francisco Bay Area, or major commercial projects in Manhattan. With the way the program is structured, their investment options are limited on purpose to the least desirable markets. Between the generally lower profits and increased risk from developing in rural or high-unemployment areas, requirements to create 10 full-time jobs and other fees, the majority of investors will be lucky to see a 1 percent yearly rate of return during those first six years. So we must address this issue early in the meeting. With this major obstacle out of the way, you can focus the prospect’s attention on the long term and less easily quantifiable advantages of a green card. If you’ve done your homework on your prospect’s unique needs and family situation, you’ll have a good understanding of which points they are most interested in, but here’s the quick-reference summary. RISK MANAGEMENT Your prospective clients might be drenched in the mantra that diversification is the key pillar holding up all risk management strategies. But do they really appreciate For e x a mple, i n t he e vent of sudden sa nct ion s by t he U.S. gover n ment or t he i mplementat ion of capita l cont rols i n t heir count r y of orig i n, a U.S. resident would still have access to American banks and the international SWIFT system. They wou ld have ma ny more opt ion s compa re d to a