Could the EB-5 VISA Investor Shape The Dallas/Ft Worth Rental Business?

by Tim Herriage

Could the EB-5 VISA Investor Shape The Dallas/Ft Worth Rental Business?

by Tim Herriage

by Tim Herriage

Sourced from Texas A&M Real Estate Center and D Magazine — When the EB-5 Visa program works, everyone is happy as developers get low-cost capital from silent investors who really just want to break even and qualify for green cards. The investors get their interest payments and equity while cities benefit from new jobs and tax-generating enterprises and developments.
“Dallas hired an immigration attorney and came up with a workable model for the city of Dallas. says Karl Zavitkovsky, director of economic development for the city of Dallas,“We wanted it to cover the entire city, we wanted to set up criteria that would align with our economic development objectives, and, most important, we wanted something that would be administered by a third party,” Zavitkovsky says.
Given the tight housing market, we ask if businesses focused at creating rental housing opportunities could benefit?
COMMERCIAL TODAY, RENTAL PORTFOLIOS NEXT?
In 2009, the city entered into a ten-year contract with Civitas Capital Group, and the City of Dallas Regional Center (CDRC) was formed as a public-private partnership. A CDRC project was an 18-story office tower in the Arts District. The CDRC provided $65 million. The developer broke ground on a speculative basis. While still under construction, the building leases to KPMG and Jackson Walker were signed. The question arises is can building a SFR rental portfolio and business qualify as commercial real estate?
VOLUMES & FUTURE
Of the 500,000 immigration visas approved by the federal government in fiscal 2015, about 10,000 were through the EB5 program. Of those, more than 9,000 came from Asian countries, including more than 8,000 from China. Of the others, about 90 came from Russia and 80 each from Mexico and Venezuela.
To date, Civitas has raised and deployed $350 million in EB5 investments in Dallas.
Today EB5 Visas are limited to commercial investment but establish interesting model for SFR rental portfolio operators who are building a long-term commercial plan. If you are a foreign investor and are looking for advice on the thriving Dallas/Fort Worth market take a look at Elevate Private Capital (our membership unit based private equity arm) or talk to 3L Finance (our real estate investment finance arm) about our non-recourse financing options for foreign real estate investors.

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