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EB5 Investors Magazine: If you had an option to
choose a couple of different things to look at in a
project – besides what you mentioned above – is there
anything, in general, that you favor or anything you
try to a void? Is, for example, a Los Angeles hotel better
than a residential development deal in New Mexico?
Are there any general guidelines as to location or type
of project, or do you go with the people that you have
a relationship with?
Larry: Generally, I prefer to work with people with
whom I have had a long-term relationship – people I
trust. Secondly, real estate projects. As a matter of fact, the
majority of the projects out there are in real estate, which
can create a lot of jobs. Moreover, Chinese have a preference for real estate because it is a tangible asset, something
they can actually touch with their own hands. On the
other hand, we have tended to stay away from mixed-use
real estate projects given that the USCIS has questioned
the jobs created under the tenant occupancy model.
Secondly, in terms of a location, I’m fine, because don’t
forget, our clients don’t have to come to Los Angeles to live.
They don’t have to go to New York to live. So where the project is doesn’t matter to me, not much, but it has to be lawful.
And also, for example, I want to look at the structure of
the project – what’s the percentage of the different stacks?
Does this developer have successful experience? And how
is this regional center? We have to get to know the people
behind the project very well. This is very important. Of
course legality is very important. Is everything there? In
terms of first or second lien, I’d prefer to have a second
lien in this business. I know some of the agents do a first
lien, and even, there are some projects that use 100 percent
EB-5 money. And they’re finished, which is great, but the
thing is, if the fundraising has no problem getting every
potential client on board and you have no problem raising
money, that’s great – let’s do it with 100 percent EB-5
money! However, in practice, that is not always possible.
EB5 Investors Magazine: What percentage of the capital stack do you think EB-5 should be representing?
Larry: Ideally, it should be less than 40 percent – 30
percent. I don’t want to see EB-5 money take too much
percentage of the capital stack. Nowadays, I really prefer
that our client have a secondary position, rather than the
first lien. Of course, in theory, it’s not as strong as a first lien.
However, we really want to see the bank’s money involved,
so by necessity, clients must accept the secondary position.
I do not gamble, and certainly, I never want to gamble with
my clients’ money. Some have achieved success in projects
with 100 percent EB-5 money, which is admirable, but for
me, I’m afraid I will never do that because it is too risky.
EB5 Investors Magazine: How many EB-5 projects do
you usually promote per year?
Larry: That is something I would rather not mention. We do
not do that many, but while we do some big projects, we also
do some small projects. But the number one criteria is to work
with old friends we have already been working together with for
a long time. At the same time we also try to develop some new
projects. I think that’s the important part. But not very many.
EB5 Investors Magazine: Do you work on investment
immigration programs in other countries, or just
on EB-5?
Larry: I do a lot of countries, as a matter of fact. EB-5 is
only part of our business. Well Trend has been around for
twenty years. We started from Canada and then [went to] a
lot of other countries.
EB5 Investors Magazine: So you have a lot of experience in international immigration. Can you give us
some general trends that you see? Are there certain
countries to which demand is shifting? Do you feel like
investment immigration is growing in general as
a trend of the world?
Larry: All of a sudden I realized one thing, before I answer
this question. This last time in Las Vegas I met an Indian
who approached me after my panel speech. He said, ‘Larry,
could you tell me why China has more than 80 percent of the
EB-5 immigration applicants, while India has less than two
percent?’ I said, ‘You are Indian. You should let me know!’
Anyways, now suddenly I realized why. The reason is, China
has an agent system. The immigration business in China is a
regulated industry. Every agent has to be licensed to do the
job in China. And since China created such an agent system
more than 10 years ago, over 14 years ago, to be exact. Now
we have so many agents in China. We have to survive in an
increasingly competitive market. That’s why everybody works
so desperately to get new business. We educate our people and
we’re an educated market. That’s why there are so many people
waiting to go to different countries. I don’t believe Russians
don’t want to go to other countries, I don’t believe they don’t
want to come to the States, I don’t believe Indian people don’t
want to come to the States – why is there such a little number?
Because they don’t have a similar system as we do in China.
That’s so critical.
EB5 Investors Magazine: So you’re noticing that China
has a higher demand for investment immigration
because, one, they were built for it – there were agents
involved that built the industry. And secondly, you
feel that because of the way that system and the
environment combined as a whole makes a perfect
soup for the Chinese residents to want to migrate?
Larry: Yes, I agree with that assessment. I think the Chinese
government was very smart in creating such a system which
takes into account China’s very large population. After China
developed itself more and more, a growing segment of the
Chinese population was getting richer and richer and a natural
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