20 Critical Questions to Ask Before EB-5 Investment

Before committing $1,050,000 to an EB-5 investment, you must vet the regional center and project. These 20 questions will help you evaluate whether the investment meets minimum safety standards.

Questions about the regional center (1 to 7)#

1. what is your USCIS designation status?#

• How long have you been designated?
• What is your service area?
• When was your last redesignation?
• Has your designation ever been revoked or suspended?

A legitimate center will provide this information readily. Verify independently on the USCIS website.

2. what is your compliance history?#

• Have you ever faced SEC, state, or USCIS enforcement actions?
• Are there any outstanding regulatory investigations?
• Have you settled any violations or complaints?
• What is your track record with compliance reviews?

Request a compliance certificate. Any enforcement history should be thoroughly explained.

3. how many EB-5 projects have you completed?#

• How many projects have you completed since designation?
• How many are still operating?
• How many projects have failed?
• What happened to investor capital in failed projects?

Track record matters most. Ask to speak with previous investors about their experience.

4. what is your track record on I-829 approvals?#

• How many I-829 petitions have you filed?
• What is your approval rate?
• How long does I-829 processing typically take?
• Have any investors' green cards been revoked?

A strong regional center has a high I-829 approval rate with minimal denials.

5. who are your key management personnel?#

• Who is the CEO or executive director?
• What are their relevant qualifications and experience?
• How long have they been involved with EB-5?
• Have they worked at other regional centers?

Experienced, qualified management suggests professional operation.

6. what are your administrative fees?#

• What is your annual administrative fee?
• Are there backend fees or performance based fees?
• What specific services do these fees cover?
• Are fees disclosed in writing?

Transparent fee disclosure is important. Typical administrative fees range from 0.5% to 2% annually.

7. can you provide investor references?#

• Can you provide contact information for 5 to 10 previous investors?
• Can we speak with them about their experience?
• Are they willing to discuss outcomes?
• Did they successfully obtain green cards?

Speaking with previous investors in person is invaluable due diligence. Legitimate centers encourage this.

Questions about the project (8 to 14)#

8. what is the detailed project description?#

• What is the project and its purpose?
• Where is it located and why this location?
• Who is the developer and what is their track record?
• Has the developer completed similar projects successfully?

The developer's experience matters significantly. First time developers are higher risk.

9. what is the market analysis for this project?#

• Who conducted the market study?
• What is the demand for this project type/location?
• What competition exists?
• Is the market analysis conducted by an independent firm?

Third party market studies from reputable firms (CoStar, Hendrickson, etc.) are more credible than internal analyses.

10. how is investor capital protected?#

• Will capital be held in escrow?
• Who is the escrow agent?
• What are the conditions for capital release?
• If conditions aren't met, when is capital returned?

Capital protection via third party escrow is necessary. Specifics about release conditions matter.

11. what is the complete use of proceeds?#

• Exactly how will your $1.05M be used?
• What percentage for construction, equipment, working capital?
• What is the contingency reserve?
• What professional fees are included?

Complete transparency about use of proceeds is standard. Vague allocation is a red flag.

12. what are the financial projections and assumptions?#

• What are revenue and expense projections?
• What assumptions underlie these projections?
• How do projections compare to similar projects?
• Are sensitivity analyses included?

Conservative projections based on comparable projects are more credible.

13. what is the project financing structure?#

• How much is bank debt vs. equity?
• What are the bank loan terms?
• Is construction financing fully committed?
• What happens if permanent refinancing can't be obtained?

Strong project financing with committed loans reduces risk.

14. what is the exit strategy?#

• When is capital expected to be returned?
• Will exit be via refinancing, sale, or dividends?
• What conditions trigger exit?
• What happens if exit strategy can't be executed?

A clear exit strategy with realistic timeline is important for knowing when you'll recover capital.

Questions about job creation (15 to 18)#

15. how many jobs will be created?#

• How many direct jobs?
• How many indirect/induced jobs?
• What is the methodology for job calculation?
• How does this compare to industry norms?

Job creation calculation must be conservative and well documented. Excessive indirect job projections are suspicious.

16. what is the timeline for job creation?#

• When will jobs be created?
• During construction phase, operations phase, or both?
• If jobs are temporary (construction), what permanent jobs result?
• How long must jobs be maintained?

For I-829 purposes, jobs must exist and be documented at filing. Most will be construction jobs during project building.

17. how will job creation be documented?#

• Who will track and document job creation?
• What records will be maintained?
• Who verifies job creation?
• How will job documentation be presented for I-829?

Clear job documentation procedures are necessary for I-829 approval.

18. what happens if job creation targets aren't met?#

• What is the contingency plan?
• What recourse do investors have?
• Could petition denial occur?
• How likely is job creation success?

You need to understand the risks and remedies for job creation shortfalls.

Questions about your investment (19 to 20)#

19. what are ALL the risks?#

• What is the full risk disclosure?
• How are risks ranked by probability and impact?
• What could cause capital loss?
• What could cause petition denial?

Fewer than 10 material risks disclosed suggests incomplete disclosure.

20. can I review all investment documents thoroughly?#

• Can I receive the complete PPM in advance?
• Can I retain an attorney to review documents?
• Can I have time to review before funding?
• Will you answer detailed questions about every section?

Never pressure to fund before complete review. Legitimate centers allow thorough due diligence.

Red flag responses#

Red flags when asking questions#

Evasive answers:

• "I'll get back to you on that"
• "That's proprietary information"
• "Other investors don't ask those questions"

Pressure tactics:

• "This allocation is closing soon"
• "I can't reserve your spot much longer"
• "Other investors are committing this week"

Hostile responses:

• "Don't you trust us?"
• "That's an inappropriate question"
• "Successful investors don't ask that"

Vague or inconsistent answers:

• Answers that don't match the PPM
• Different answers to the same question
• Refusal to provide written answers

Due diligence timeline#

Week 1: initial due diligence#

• Verify USCIS designation status
• Request and review PPM
• Request compliance documentation
• Request investor references

Week 2 to 3: detailed review#

• Review financial projections in detail
• Assess developer background and track record
• Speak with 3 to 5 previous investors
• Identify remaining questions

Week 4 to 5: professional review#

• Have EB-5 attorney review all documents
• Have accountant review financial projections
• Have real estate professional assess project
• Compile list of final questions

Week 6: final questions and decision#

• Submit final questions in writing
• Request written responses to all questions
• Review regional center's complete written responses
• Make final decision to invest or pass

Week 7: funding#

• Transfer capital to escrow account
• Execute subscription agreement
• Complete all I-526E documentation
• File petition

Taking 6 to 8 weeks for due diligence is appropriate and protective.

Documentation to request#

During due diligence, request in writing:

• Complete PPM and all exhibits
• Audited financial statements (if available)
• List of all projects completed (with outcomes)
• Compliance history documentation
• Developer's background and prior projects
• Third party appraisals or market studies
• Loan agreements and financing terms
• Escrow agreement (template or final)
• Job creation methodology documentation
• Previous investor contact information

How to ask questions effectively#

Frame questions clearly#

• Write questions in advance
• Number them sequentially
• Request written responses
• Specify deadline for responses

Avoid loaded questions#

• Instead of "How do I know you won't commit fraud?"
• Ask "What compliance measures protect against misuse of investor capital?"

Ask follow up questions#

• Don't accept vague answers
• Keep asking "why" and "how"
• Request documentation supporting claims
• Verify independently when possible

Document everything#

• Keep written record of all questions and answers
• Save copies of all communications
• Document any changes to representations
• Preserve documentation for I-829 filing

When to walk away#

Walk away if:

• Regional center won't answer questions transparently
• Job creation assumptions seem excessive
• Project has minimal professional developer experience
• Escrow arrangements are inadequate
• Financial projections are unrealistic
• Compliance history includes enforcement actions
• Previous investors report negative experiences
• You don't feel confident about the project
• You're pressured to decide quickly

There are thousands of EB-5 projects. If something feels wrong, there are other options.

Final thoughts#

Thorough due diligence takes time and effort, but it's the best protection for your $1.05 million investment. These 20 questions cover the key areas. Ask them, get detailed written answers, have professionals review the documents, and speak with previous investors.

A professional regional center welcomes due diligence and understands that thorough evaluation protects everyone: the regional center, the project, and your immigration case.

Don't compromise on due diligence to save time or follow pressure to commit quickly. Your $1.05 million and your green card depend on choosing the right regional center and project.