Should You Invest In A Regional Center?


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Are Regional Centers A Bad Choice If They Have These Disadvantages?

Regional Centers are not a bad choice, despite the disadvantages.

Even though investors say they don’t want to invest in a regional center because as limited partners, they have no say in the project. The return is very low. The most popular deals are loan deals. The positive side to the loan is that you have a date for payback versus on the equity side, those may not pay off for seven to nine years. There is no exact date because it’s up to the developer to choose or the project, when they will pay the money back.

When someone interested speaks with an attorney, they will talk about all of the options. If they say they don’t want to do the regional center because of the reasons discussed meaning they had nothing to say about the project and the returns are very low, then the attorney will go over whether or not they’re willing to manage and direct their own business or whether they want to trust someone else to do it for them. In this case they would be involved in policy, would supervise and have a manager.

Once they see the level of involvement there, most people choose the regional center, which are the most popular and probably the best choice. A number of people call their attorney after they’ve been in business for a number of years and say, “The business isn’t making it yet. What do I do?”

They are usually in bad shape because initially you get a 2-year green card which takes about 2 years to get. Once you get that card, then you’re already four 4 down the road. At the end of the 2 years, you have to show you’re still in business and have created 10 jobs. However, if your business is faltering at that time and you only have three employees and you’re in the verge of shutting down, then you will have lost everything because you cannot even get a permanent green card and you’re back to square one.

If You Don’t Want To Invest The $500,000 In A Regional Center, How Much Do You Need To Invest On Your Own? What Are Targeted Employment Areas?

There are two areas where the choice of investment is either $500,000 or $1,000,000. If your developer’s project is in the Targeted Employment Area (TEA), meaning one-and-a-half, or at least one-and-a-half times the national average of high unemployment, then the minimum investment of $500,000 is allowed. If the area is rural and in a TEA you can also invest $500,000.

The $500,000 investment amount was supposed to increase to $800,000 last October. Although there was a bill in Congress to change it, they couldn’t get together on a lot of the other points so it remains the same for now. The current law was expanded another year to September 30th, 2016. However, it is sure that the minimum will go up from $500,000 to $800,000 eventually. Therefore, another advantage to this option is that people who invest before that date will have a lot less to invest to still qualify under a TEA.

As for everywhere else, the investment minimum is $1,000,000, which will most likely increase to $2,000,000.

Additionally, the rules apply to both regional centers and direct investments. It doesn’t matter whether you’re doing the investment yourself or you’re doing your investment through the regional center, the same minimums apply. Although there isn’t an exact percentage, but 99% of regional center investments are all in the TEAs. There may be one or two million dollar investments, that are a premiere project in New Port Beach or other areas around the country but they’re very rare. People want to invest the least amount they can and still get a green card.

If you are not sure whether to Invest In A Regional Center Or Not, call the Immigration Attorneys at Mark A. Ivener, A Law Corporation for a FREE Initial Consultation at (310) 477-3000 and get the information and legal answers you’re seeking.

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