Generating Attractive Risk Adjusted Returns from a Diversified Real Estate Portfolio
Frequently Asked Questions
Who is eligible to invest in a CARc sponsored JOB Fund?
Generally, individuals who have a net worth of at least US$1,000,000, or who expect annual income this year and had income over the past two years of US$200,000 or more, and who are foreign person who are non-resident in the U.S., may apply to an, if approved make an investment in a CARc sponsored investment Fund.
Why should I choose a CARc sponsored JOB Fund for my EB-5 investment?
CARc believes that it’s sponsored investment Funds offer a unique combination of strengths unavailable from other regional centers, including:
q CARc’s regional center area and the Fund’s targeted project investments are situated in one of the top real estate investment markets in the world- the Washington, D.C. Metro region;
q The Fund is professionally managed by individuals with a long and successful history of structuring, financing and profitably managing and exiting real estate investments for wealthy individuals, institutional investors and pension funds;
q The Fund targets prime development projects and co-invests with nationally and internationally recognized developers and sophisticated institutional investors and professionally managed pension and investment funds. This institutional quality real estate investment strategy is typically unavailable to individual investors;
q Because the Fund will co-invest with large developers and institutional investors, it can invest in larger projects, producing a larger job creation count than we could otherwise achieve. This substantially reduces the USCIS job creation compliance risk;
q The Fund will seek to diversify its project investments, thus reducing the risk associated with more concentrated single asset funds;
q The Targeted Employment Areas (TEA’s) within CARc’s regional center are located in vibrant sub-markets where quality investment opportunities are available and attractive to both institutional co-investors and the Fund;
q CARc provides it’s Investors with a unique level of value added services, including support for their EB-5 petition process, opportunities to invest in future funds, referrals to leading U.S. immigration attorneys, as well as private banking introductions to facilitate their transition to U.S. residency and the coordination of tax, estate and wealth management planning they will require.
How do I invest in a CARc sponsored JOB Fund?
There are three basic steps in the CARc / JOB Fund investment process;
q Contact CARc by email to info@eb5dc.com, or contact one of our authorized Agents and request a copy of the Confidential CARc JOB Fund Program Information and the Application & Personal Questionnaire packets.
q Review the materials and submit the completed Application and confidential Personal Questionnaire and pay the applicable fee to CARc; and
q Once notified of approval by CARc, receive and review the JOB Fund offering documents, sign the Fund Subscription Documents and you’re your capital investment and the applicable Expense Fee to HSBC, the Fund’s Escrow Agent.
What is the time line to invest and receive the visa?
The specific steps require the following approximate times:
CARc's review of the completed Suitability Evaluation Form: 1-3 business days.
- Investor and his immigration counsel review the Private Placement Memorandum: 3-10 business days.
- Investor subscribes to CARc JOB Fund – I, LLC and deposits his capital contribution and if applicable any expense fee to the HSBC escrow account: 1-30 days.
- Investor and his immigration counsel complete the CARc Application & Diligence Questionnaire and the I-526 visa petition: 5-10 business days.
- Immigration counsel submits the visa petition to USCIS: 1-2 business days.
- USCIS adjudicates the visa petition: 90-180 days (see:www.uscis.gov for current processing times for all Regional Center petitioners).
- USCIS approves I-526 notifies Investor’s immigration counsel, HSBC escrowed funds released to the Fund: 1-3 business days (if rejected by USCIS, the notice is given to HSBC and the Investor’s escrow account is released to the Investor).
- Investor and his immigration counsel file for a change of status of his current visa or schedule an interview with the US Consulate in his home country: 30-180 days.
- Investor receives annual distributions of investment income from operations of the Fund: Annually.
- Prior to 24 months from the date of USCIS’ approval of the I-526, Investor and his immigration counsel submit an I-829 petition to change the status of the visa from conditional to permanent: 1-3 business days.
- USCIS adjudicates the I-829 and issues the permanent green card: 180-360 days.
- Five (5) years after the Investor’s original investment in the Fund (see 3. above), Investor eligible to receive redemption of his capital account in the Fund: 90 days.
How much do I have to invest to meet the EB-5 Program requirements?
The EB-5 Program regulations require that you invest a minimum of US$1,000,000 and be engaged in the management of a “new commercial enterprise” that produces at least 10 new jobs. You may, however, invest as little as US$500,000 if you invest in a new commercial enterprise located within a targeted employment area, or TEA. TEA’s are defined as any area that has experienced a rate of unemployment greater than 150% of the national average.
Do I have to personally manage the new enterprise to qualify for my visa?
No, provided you make your investment through a CARc JOB Fund. The Manager retained by the Fund will negotiate the terms of each new project investment and manage all aspects of the Fund’s investments for you and the other Fund investors.
Can CARc guarantee the return of my capital investment?
No. USCIS EB-5 regulations prohibit the guarantee of the return of your capital investment by any regional center or related investment fund. Any such guarantee by CARc, the Fund or any other regional center would invalidate your EB-5 visa petition.
Do I need a U.S. immigration lawyer to process my EB-5 petition?
Yes. You will need a qualified immigration attorney familiar with the USCIS EB-5 visa petition process to represent you. While CARc will provide you with supporting documentation for your EB-5 petition related to the regional center and your investment in the Fund, it cannot provide legal advice. The EB-5 visa petition process is the responsibility of you and your immigration attorney. You are responsible for all legal fees and costs associated with preparing and processing your EB-5 visa petition.
Can I hire my own attorney or only one recommended by CARc?
Yes. You may hire any qualified U.S. immigration attorney that you wish. If you do not yet have an attorney, CARc recommends that you retain one before you invest so that you have an independent expert legal advisor to help you decide whether you are a good candidate for the EB-5 Visa Program. Upon your request, CARc will refer you to a qualified independent immigration attorney familiar with the U.S. immigration laws, including the EB-5 Program rules and regulations.
What do I receive from CARc to help me with my EB-5 Petition?
Once you have signed your Subscription Agreement and wired your funds to HSBC (the Escrow Agent), CARc will provide you with the following materials that will be required to complete your Form I-526:
q A copy of CARc's USCIS letter of approval and designation as a regional center;
q A copy of the approved regional center narrative proposal and business plan submitted to USCIS by CARc;
q A copy of approved IMPLAN Reports which taken together reflect that the Fund’s planned investments within CARc’s regional center will generate, either directly or indirectly, not fewer than ten jobs per EB-5 Investor in the Fund;
q If applicable, documented evidence that the location of the job creating investment is fully located within a TEA;
q A legally executed copy of the Fund’s Operating Agreement evidencing that you have invested in and been admitted as a member to the Fund; and
q Evidence that the Fund's Private Placement Memorandum complies with applicable SEC requirements governing such matters.
Do I get my money back if my I-526 petition is rejected by the USCIS?
Yes. If for any reason your I-526 visa petition is rejected by the USCIS, upon receipt of a copy of your USCIS rejection notice HSBC, as Escrow Agent, will return to you 100% of the amount of your investment and the Expense Fee that you originally wired into the Escrow Fund when you signed your Subscription Agreement.
Do I have to stay in the U.S. to once I receive my EB-5 visa?
No. As a permanent U.S. resident, you will be able to travel freely within and outside of the United States, the same as any citizen. The USCIS EB-5 regional center program has the added advantage that you may be a passive investor – you are not required to work in or actively mange your investment.
What information will I be required to provide to CARc in the Application?
The Application and Questionnaire are designed to provide CARc and HSBC, as the Fund’s Escrow Agent, with personal background and financial information that will allow us to verify:
q That you are of good character and meet the requirements of US banking regulations and the Patriot Act;
q That you have a sufficient source of legal assets and income to qualify as an “accredited investor” under US securities laws; and
q That you appear to meet the eligibility requirements of the USCIS EB-5 visa program.
I’m concerned about my confidentiality. Does CARc protect my information?
Yes. CARc has established a strict policies and procedures to protect the privacy of its Applicants and the Fund’s investors. After receiving your Application and Questionnaire, CARc keeps your confidential data secure in electronically encrypted computer files identified only by number, not by name. To further protect your information from unauthorized use, these files cannot be copied or printed without a second layer of encryption.
What does CARc do after my Application & Questionnaire are submitted?
CARc’s authorized independent investigative agents will conduct a confidential investigation to verify the accuracy of the information you share with us. After CARc receives the investigative report and determines you that you have sufficient financial resources and appear to be meet the eligibility requirements of the EB-5 visa program, it will notify you or your authorized representative of your approval and forward to you the JOB Fund offering documents.
CARc requires this review for the benefit of the investor's visa petition, as well as for the integrity of the Fund's investors, its institutional co-investors and its Escrow bank. CARc has been advised by USCIS and the State Department that such independent, 3rd party investigative reports are beneficial to the government's evaluation to confirm the visa petitioner's source of funds and integrity of his representations. However, CARc understands that these governmental agencies view this material as supplemental and will not be the sole basis upon which the government will adjudicate any one visa petition.
What happens if my Application is rejected by CARc?
If for any reason your Application is not approved, CARc will notify you that it has been rejected, destroy all physical copies of your Application and Questionnaire, and return your Escrow funds immediately to you.
What investment offering documents will I receive?
Once your Application has been approved, CARc will send you a Subscription Packet containing the following documents for you and your advisors to review:
q The Private Placement Memorandum describing the Fund and the currently targeted project investments;
q The Subscription Agreement and Power of Attorney for the Fund;
q The Fund’s Operating Agreement;
q A copy of the Escrow Agreement between the Fund and HSBC Bank;
q Appropriate US Tax ID Application and Withholding Forms; and
q Subscription and Wire Instructions.
What if I receive the JOB Fund offering documents and I decide not to invest?
You are under no obligation to invest in a JOB Fund. If you decide not to invest, we will ask you to return the JOB Fund offering documents to us.
Where does my money go when I do invest in a JOB Fund?
When you sign the Subscription Agreement you will wire the amount of your investment in the Fund, plus the Expense Fee, directly to HSBC Bank, as Escrow Agent for the Fund. HSBC will hold 100% of your money, together with the moneys received from other EB-5 Investors in the Fund, in escrow until your initial EB-5 visa petition (USCIS Form I-526) is approved. Until then, it will be invested for the benefit of the Fund in the HSBC Investor U.S. Government Money Market Fund, a short-term mutual fund managed by an affiliate of HSBC Bank. After your I-526 is approved, your money will be released to the Fund. Your investment amount will be credited to your Capital Account and deposited in the Capital Account of the Fund, and the Expense Fee will be transferred to the Fund’s Operating Account.
How large will the Fund be in terms of total dollars invested?
Under U.S. securities laws, the Fund must have fewer than 499 different investors. The Manager estimates that the Fund will be initially capitalized at between US$250 million and US$500 million, depending primarily upon how many Applications are received, how much each approved Applicant decides to invest, and the timing of their investments.
What kind of investments will the Fund make?
The Fund will invest in a diversified portfolio of real estate development projects. Property types may include residential (rental apartments and condominiums or cooperatives); commercial & industrial (hotel/hospitality, retail, industrial, offices, civic buildings, theaters and stadiums); or mixed use projects containing more than one of the above property types. Fund investments may be made in the form of equity, participating loans, secured mortgage loans, or in combinations.
Where will the Fund’s investments be located?
All the Fund’s real estate project investments will be located within CARc’s USCIS approved “regional center” area, one of the top real estate markets in the world, including the city of Washington, D.C., the city of Alexandria, Virginia, and the four surrounding counties (Fairfax and Arlington Counties in Virginia, and Prince Georges and Montgomery Counties in Maryland).
How will I be able to monitor and track my investment in the Fund?
The Fund’s independent Administrator will provide you with regular financial reports on the Fund, as well as income tax information relating to your investment that you and your advisors will need to complete your individual U.S. tax returns. The Fund will provide you with internet based access to a secure web portal where you may access these important Fund documents via personal computer from anywhere in the world.
When can I redeem my investment in the Fund?
The EB-5 Program regulations and recent USCIS rulings require that your investment be “at risk” for at least five years. However, the Fund may make distributions of profits and income during this time period. After 5 years, you may request that the Fund redeem part or all of your Membership Units at the then current valuation.
What exit strategies will the Fund use to provide investor liquidity?
The Fund will invest in real estate development projects that its Manager expects can be profitably liquidated, sold or refinanced within a 3-5 year horizon. The exact strategy used to exit each project investment will be determined based on alternatives then available that, in the opinion of the Manager, will produce the highest risk adjusted returns to the Fund and its investors.
There are numerous exit strategies available to the Fund to provide investment liquidity, including;
q Outright sale of the property to another public or private investor;
q Non-recourse leveraged refinancing of the property and distribution to investors of the excess proceeds as “return of capital;”
q Sale of the Fund’s interest to a third party investor, including another GCMA managed fund, or co-investor or co-developer;
q Tax-free exchange or swap;
q Exchange with an “UPREIT” for listed shares in a real estate investment trust or similar public property investment vehicle;
q Listing the Fund as a REIT on a public or private exchange and exchanging Membership Units in the Fund for its newly issued exchange listed shares.
What are some examples of projects that the Fund is considering?
A few examples of projects currently under consideration by the Fund’s Manager include the Old Convention Center redevelopment in downtown Washington, D.C.; the Poplar Point Project in the Anacostia riverfront area of Southeast Washington, D.C.; the Watergate Hotel redevelopment project on the Potomac riverfront in the Georgetown area in Washington, D.C.; and several projects planned for the Southwest waterfront redevelopment area of Washington, D.C.
Doe the Manager have a track record of investing successfully?
Yes. The Managers have a historical track record of managing many large institutional projects with pension funds, international banks, and life insurance companies as investors. The rates of investment return achieved historically have ranged from 9% to over 70% on equity positions, and from 6% to approximately 19% on various types of debt investments. Overall, between 1994 and 2006 John Tung, the Fund’s principal real estate investment advisor, has directed the investment of approximately $490 million for clients in 22 projects totaling $1.28 billion. These investments achieved an estimated weighted average rate of return to investors of over 13%.
What rate of return will I receive on my investment?
While the Manager believes it can achieve results for the Fund consistent to those achieved in prior investments managed by its principals, it is important to understand that historical results do not predict future returns. A summary of the Manager’s historical project rates of return and other information about its principals, their backgrounds and the investment strategy to be employed by the Fund may be obtained upon request.
Does investing in a TEA mean taking more investment risk?
Understanding the unique characteristics of the particular sub-market is paramount to assessing the risk of making any real estate investment, particularly one within an area that, by definition, has experienced higher than average rates of unemployment. However, the designated targeted employment areas (TEA’s) within the CARc regional center encompass much of Washington, D.C., including its downtown and the Capitol Hill neighborhoods, as well as the areas fronting the Potomac and Anacostia Rivers and many other economically vibrant locations where a number of prime investment opportunities exist.
Where can I get more details about CARc and the EB-5 Program?
You can visit the CARc web site at www.eb5dc.com, which has information about CARc, its designation by the USCIS as a “regional center” under the EB-5 Program, and its management. It also has links to other web sites with details about the EB-5 Program, the Fund’s advisor, its Escrow Agent & Depository bank, HSBC Bank USA, N.A., and its independent Fund Administrator and Fund Accountants.
Can my spouse and children also get their own U.S. Green Cards?
Yes. If you qualify under the USCIS rules and regulations and invest in a JOB Fund, then your spouse and your children, who under the age of 21 at the time of your EB-5 submission, are also eligible to receive their own EB-5 U.S. residency visas.