Brian Su is the President and CEO of the Artisan Business Group, an NES Financial Medallion Partner. Brian has served as a consultant to the EB-5 industry since 2005, and through the Artisan Business Group has facilitated alternative financing for over one billion dollars in various residential and commercial real estate projects in the U.S. and China. In our first interview, Brian discussed the state of the EB-5 market. In this second part, Brian offers valuable insights for prospective EB-5 investors on minimizing risk.

What is the first step that a prospective investor should take?

Investors must do their own research on the different visa programs, project developers and projects. One of the first steps should be to attend industry events and talk with other investors who have completed the program. Today’s investors are getting wiser and looking for second opinions. That’s a positive sign — and those that look for outside opinions are making better choices than those that don’t.

For many investors outside the United States, investing in a foreign country may seem daunting. What professionals should a prospective EB-5 investor look for to help them in the process?

We believe intensive due diligence and hiring an experienced team of professionals — such as tax attorneys, accountants, lawyers, and financial advisors — is the most important step for the investor. The average investor doesn’t have the time or knowledge to do effective due diligence. Many people have no idea how to get started, and while there are plenty of “due diligence” checklists out there which may be useful as a starting point, they are no substitute for professional advice.

If you are going to safeguard your investment, you really have to spend the money to get an investment advisor and other professionals. An investor has to realize that the real cost is not just the investment itself; it’s investing in the professionals that surround the EB-5 investment too. And if you can’t afford it, or aren’t willing to make the investment, you have to ask yourself whether you can afford to take the risk.

What makes one project better than another?

Each project is very different. It is important to consider all aspects of the project when comparing them. The better project is the one that has complete transparency and integrity measures in place.

What should an investor look for in the track records of the regional center and the developer?

Statistical data on each regional center is now published, which gives today’s investor a huge advantage over those a few years ago. It is important to note the industry experience of the developer. For instance, if the developer has twenty years in the hotel industry, then why is he now launching a manufacturing project?

What should an investor look for in the offering documents? How granular should an investor get in researching things like the economic impact study? Or should they just rely on their advisors?

Investors should always conduct their own research and due diligence on a project and the individuals involved in the project. But economic impact reports are hard for investors to understand. Hiring investment advisors and due diligence professionals is highly recommended.

How can investors be sure that the project will create enough jobs to meet the USCIS requirements? What kind of “job cushion” should investors look for?

It’s important that investors use the experienced professionals on their advisor team to help them make sure all the USCIS requirements are being met. Certainly, the higher job cushion, the better. But you should check that the report was created by a reputable economist familiar with the EB-5 program.

How does an investor ensure that their funds are being handled correctly? What best practices should an investor look for?

One of the most important best practices in the EB-5 program is the use of an experienced escrow and fund administrator. It is the administrator’s job to ensure funds are released only when certain conditions are met. This is a critical factor in minimizing risk for the investor.

Read Brian’s Interview on the State of the Market

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