The Managing Director, Houston EB5, Mr. Acho Azuike, in this interview with Nume Ekeghe, at the company’s office in Houston Texas, spoke on opportunities for immigration through investments in the company’s scheme
Can you tell me about Houston EB5 and the services it renders?
Houston EB5 was created back in 2010 as a way to bring foreign investment into our real estate project as a way to fund them using EB5 program. The fact that we are a developer and in a regional center, which means our interest are truly aligned with our investors and when we are investing our capital alongside our investors. So, we put our money, they put theirs and we make sure the project actually comes alive. We are developing a real estate project that we will do with or without EB5 funding. We are looking for a great location and great assets, we are thinking about the highest and best use for the land we are acquiring and we try to truly build landmark projects and landscape-changing projects all over Texas. And so we are happy to have EB5 funding as a way to help that.
Can you speak on your previous projects?
The first project we started was a project we called the ASTORIA. It was a condominium project we did in the Galleria area of Huston and we got into it actually out of ignorance, not knowing that we are going to do that much. So the way EB5 works now is that if a project is located in a targeted employment area (TEA), it qualifies for $500,000 investment, but if it is not the kind of the area, it is a $1 million investment. And so we got the site first and start off the project we want to build and we say let’s try EB5 on this project and we went to raise the money in China, one source for EB5, and we didn’t get a single dollar in China, because everybody is doing half a million dollar EB5.
We were the only project in the country that was doing a million dollars. So, we regrouped and went to Nigeria, Mexico and other markets and at a time EB5 was really virgin, nobody knew about EB5 and so they did not know the difference between a million-dollar EB5 and half, and we are able to raise funds in Mexico, Nigeria and other Latin American countries using EB5 program in a one-million-dollar investment. So, that was a project that was a 72-unit condominium, we completed it and investor in that project have seen the beginning, they have gotten their green cards, they have gotten their permanent, they have gotten their money back and their profit on that project.
Can you tell us about your other projects?
So that was our first project and being that we are doing a million-dollar project we said okay, let’s try some half a million dollar projects at least that would be a lot easier. So we have started working on Marlowe, which is a condominium project in Downtown Huston. It is another project and it’s another success story because we have completed it. Investors have gotten their I-526 approvals and we are waiting for the finishing of the project so investors can get their final capital back. Those are the two kinds of project we are working on. We just finish raising for a hotel project in Saint Antonio called the Thompson Hotel. We raised $45 million successfully for that project primarily from Latin America, Nigeria, Asia, and other markets. That is our biggest raised till today and it was $45 million.
How much of that came from Nigeria?
From Nigeria we raised about $14 million for that project.
Can you elaborate on your new project and how you intend to go about it?
For our new project, we acquired a site here in Houston off the Allen Parkway called ‘The Allen.’ It is a six-acre track and we are doing a mixed use project. We are at phase one which is what we are currently raising fund for and it is a hotel condo, another Thompson Hotel with condominiums in it. So, with our success in St Antonio and the hotel project we enjoy working with our brand and are looking at bringing same brand here in Huston with the Thompson Hotel. This would be the first two Thompson in Texas and we are excited about that and we took our condo expertise and we doing a condominium on the top of the hotels. So we have 171 rooms, 100 condo units in the retail restaurant and office. And for phase one, we are looking to raise about $56 million in EB5 for the project.
So do you plan to come to Nigeria to raise these fund?
Nigeria is a huge market for us and we are looking to expand to Nigeria and also further into Africa. The Chinese market has started to decline because of long wait period for Chinese investors, so there are lot of activities happening in Africa and being that we have been in Nigeria since inception of our company, we have a good track record there and we have a lot of happy investors who have gone through the project lifecycle. So, we are looking to do lot more in Nigeria and constantly have been marketing in Nigeria since our inception and we are looking more of there.
What is the minimum investment for EB5?
Minimum investment requirement of EB5 is half a million dollars and with half a million investments, they get preferred return on investment and also share in the profits of the project.
The US Government recently announced there would be changes in the EB5 investment requirements; can you please elaborate on that?
For the change, the government has been tinkering with a change for the programme in the last few years, but they finally came out with the final ruling and the date for that. So investment would have to go from $500,000 to $900,000 for the TEA project, and for the non-TEA project they go from $1 million to $1.8 million. So, that is a huge jump for people and is also going to be harder for projects to qualify for TEA, so in reality the investment could be increasing from $500,000 to $1.8 million. So, right now we are seeing a huge rush from investors who are trying to get their investment in before the deadline of November 21 of this year.
The EB5 Immigrant Investor Program is a way to attain immigration to the United States, could you walk me through the process and the collaboration with both DC partners and Houston EB5?
Typically once we have an interested client, we started off with a conference call to understand their story, what they are investing for, if they have children that they are trying to put in school, also where the money is coming from because we have seen a lot of cases from Nigeria, primarily people are entrepreneurs and are generating income from their company or if they are selling land, property they own in Nigeria or they are getting loan from their bank in Nigeria.
We understand their story and we set them up with conference call with immigration attorneys to talk about the sources of fund, because that is the main thing that the governments are going to look for approval purposes; where is the money coming from, making sure is not an illegal sources or kind of fraudulent activity. So we do a conference call with the immigration attorneys, we understand their sources of funds and then engage with immigrations attorneys to send them a check list of all the documentation that they will need to prove their source of fund. So investors can take up to two weeks, because once the children turn 21, then they are eligible for all the benefits, so they can file before the child turn 21. So, we have had a few investors whose children are getting ready to turn 21, they need to hurry up and get their papers together before that.
I have seen investors take two weeks to get their heart together to file and I have seen investors take a year to put all together and file. So, as fast as they get their checklist together and work with the attorneys to go back and forth, is as fast as it would take to do the documents. Once the immigration attorney gives us the green light and say we have review the documentation, we think is going to be an approvable case, and we understand the sources of funds then advise the investors to proceed to send their investment funds to us. So, the dollar amount goes to an escrow, where we do not touch the $500,000 account, because it is escrow account that is held by third party. So, we are taking that from the escrow account directly to the project. So, there is no risk of any kind of fraudulent activity.
You said you have been doing this for a while, can you tell us your success rate?
We are on our seventh project now and I would say we have 99 per cent success rate, we been very lucky to that fortunate to have up to 99 per cent success rate with our projects, even the cases that was not approved due to investor gaps funds returned those were primarily because of source of funds issues. But, most importantly, all our project we have controls of all of them. So, it is in our interest to make sure that the project is successful for us to get our money back, in addition to investors getting their money back.
Asides from the immigration benefits, can you elaborate on the returns investors stand to gain from investing in these projects?
It varies from project to project and around four per cent preferred returns on investment is what investors are getting, plus a share of profits on the property of project. So, depending on the project that is going. One of our projects, after the investors all got their money back and they all doubled their admin fee and some investors got cheque of $100,000 on profits that they made. But that is going to vary from project to project depending on what they invested in.