Opportunity opens for Houston EB-5 investors as policy changes in US
… firm partners 3INVEST on new project
Opportunity has opened again for investment and legal permanent residency in the United States through the EB5 visa programme as the new president, Joe Biden, through an executive order recently, lifted travel ban on citizens from more than a dozen countries, including Nigeria.
Investors approach to the EB-5 investment had been affected badly by government policies which went beyond travel ban to implement changes to the EB-5 Investor Programme as part of a comprehensive EB-5 modernization law passed by Congress.
The most notable change was the increase in the minimum investment amounts from $500,000 to $900,000 for Targeted Employment Area (TEA) investments and $1 million to $1.8 million for non-Targeted Employment Area (TEA) investments.
With the new development, however, though the increase in minimum investment amount remains, hope has been raised, investors can return to the Houston EB5, which, in the past 10 years, has provided opportunities for over 350 immigrants to gain legal permanent residency in the US.
This it does by creating qualified and competitive real estate investments in Texas. Its visa programme is administered by the United States Citizenship and Immigration Services (USCIS).
The development, according to experts, provides timely opportunity particularly for Nigerian investors as the investment climate in their country remains hazy with galloping inflation and crippling recession.
“By eliminating the travel ban on Nigeria and a dozen more countries, Nigerians are no longer in limbo wondering what will happen once their EB-5 petitions are approved. Since the ban was in effect, some Nigerians had been sitting on the sidelines because of the uncertainty, but now can feel confident about the future of EB5,” Acho Azuike, managing director of the Houston EB5, noted in a statement.
Ruth Obih, CEO, 3INVEST, a real estate investment firm, agrees, noting also that “with the increase in the minimum EB-5 investment amount, political uncertainties in our countries, travel bans, and a global pandemic, people have been concerned about investing. But, for those who understand this new offering, this is a great opportunity and the time is now.”
The newest investment offering from EB-5 is the Moderno Porcelain Works designed to successfully benefit from the change in the minimum investment amount. It is a new addition to the over $1 billion in real estate which the company has developed and completed the entire lifecycle of the programme from capital investment, issuance of green cards to return of capital and profits.
“This is great news for African investors when it comes to EB-5 investment,” Obih said, adding, “with the travel ban lifted, this new investment opportunity allows for immediate investment, flexible investment terms, a limited number of investors, and is backed by a corporate guarantee.”
In the past, major real estate developments were brought about through EB-5 investment opportunities and, according to Azuike, while these types of projects have been hugely successful, they were offering a different type of investment opportunity for those investors not interested in large real estate development projects.
“Our new offering, through Moderno Porcelain Works, is an operational business versus a large-scale real estate project. We will have 3-4 investors for each operational center. Therefore, we are offering a more personalized investment opportunity and smaller capital raise to begin each project. Another attractive aspect of the new opportunity is that returns are paid yearly instead of being accrued,” he assured.
Moderno Porcelain Works is a growing fabrication and installation company specializing in large format porcelain. The company has established operational centers in industrial areas just outside the metropolitan areas that are designated TEAs. These operational centers serve as sales galleries, offices, training centers, as well as a material warehouses and state-of-the-art fabrication facilities.
These types of developments do not need to be in a prime location to be an attractive real estate investment opportunity because the end-user, the customer, can live anywhere in the metropolitan area and be serviced from this location and support a successful business operation over the long term.
“It’s a no brainer to invest in Moderno,” explained Obih, adding, “with a 5-year loan term, better returns paid yearly, capital repayment backed by a strong corporate guarantee and Maximum of 4 Investors makes it one of the safest EB5 projects available”
This type of operational business model is the future of EB5 investing. The operational business allows for fewer investors to reach the capital investment amount resulting in a quicker project start time as against large real estate development.
Additionally, an operational business with strong underlying fundamentals, like Moderno Porcelain Works, can also offer an investment payment plan to address the increase in investment requirements under the new law.
Moderno Porcelain Works currently has four operational centers in Texas, Florida, and Minneapolis. EB-5 Houston completed the raise for three additional locations with plans to expand to a total of 60 cities by 2025.