Even with the recovery of the market, a real estate developer
can save millions of dollars using EB-5 funds as opposed to conventional financing. EB-5 investors have shown a preference for
real estate projects, mainly because of the collateral value and
the ease of the return on investment; in contrast, manufacturing
projects, which do not have the same asset value, may not have
the ability to repay the investor in five years.
Another key reason to consider EB-5 financing for a real
estate project is that real estate remains a tangible investment.
Compared to other tangible investments, such as manufacturing,
or intangible investments, such as stocks and bonds, investors
can physically inspect real estate property; obtain background
checks of the developers, sellers, and brokers; obtain an appraisal
of the property; etc. Using leverage or debt in real estate can
be structured more safely than using debt to buy stocks by
trading. Real estate investments traditionally have been a good
inflation hedge to protect against a loss in the purchasing power
of the dollar. From the investors’ point of view, real estate EB-5
projects have tangible collaterals—the land and the property.
Flexible regulations and affordable financing have combined
with investor interest to make re