Investment Opportunities with the EB-5 Visa

EB-5 Program pic
EB-5 Program
Image: uscis.gov

The chief executive officer of Global Capital Advisors in San Francisco, Kevin Fitzgerald spent nearly 10 years with U.S. Advisor (d/b/a U.S. Advisors). During his time with the company, Kevin Fitzgerald served as an EB-5 Visa Regional Center Sponsor.

Established by Congress in 1990 as a way to encourage foreign investment in the U.S. economy, the EB-5 program requires investors to invest in new commercial enterprises via regional centers. Investors must invest at least $1 million into a U.S. commercial enterprise, using cash, capital equipment, secured indebtedness, inventory, or tangible property. If the investor wishes to invest in a targeted employment area, which encompasses rural areas and areas with high unemployment, the minimum investment amount may be lowered to $500,000.

In addition to meeting the minimum investment amount, investors must create at least 10 full-time jobs for U.S. workers within a two-year period. Investors can also meet this requirement by creating indirect jobs, which occur as a result of capital invested in EB-5 regional centers.

What is IRS Section 1031?

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IRS
Image: irs.gov/

Residing in San Francisco, California, Kevin Fitzgerald has managed over $2.5 billion in real estate investment properties. Acting as CEO for several real estate investment firms including Global Capital Advisors and U.S. Advisors in Napa, California, Kevin Fitzgerald has been successful at acquiring and reselling hundreds of single-family homes.

U.S. Advisors dealt mainly in real estate holdings in conjunction with Section 1031 contracts. Established by the IRS, Section 1031 allows real estate investors to sell their property and buy another one while putting off their taxes. Simply, if a property sells and the money is put towards purchasing another one, the capital gains taxes on the original property are deferred until it is sold with no reinvestment.

The reasoning behind the IRS creating Section 1031 is that when a person sells a property and then immediately buys another, it just appears to be a transfer of real estate to another with the same amount of value being held.

Report Explores Urbanization Trends in Commercial Real Estate

With experience in commercial real estate and investment management, Kevin Fitzgerald led U.S. Advisor, LLC (dba US Advisors, LLC), and Overseas Investor Services, LLC, before assuming responsibilities as the CEO of Global Capital Advisors, LLC, located in San Francisco. Kevin Fitzgerald stays current on topics with the real estate investment industry by monitoring reports and updates in his field.

According to a recent report from CBRE Global Investors, macro trends support the continued growth of urbanization and a sustained demand for properties located in urban areas. The report states that investors have become increasingly confident in urban investment due to lower vacancies and strong rent growth in recent years. However, the CBRE Global Investors report states that urban investing can be challenging and that it is extremely important to select the right site for investment or development. The reports explains that preferred locations offer positive projections for strong demand, rent growth, occupancy, liquidity, and marketability.

When looking to invest in an urban property, the report recommends that investors focus on attractive-looking properties with “old bones,” as such buildings draw in potential residents of various ages. The report also notes that an ideal property sits on a well-traveled street and provides access to public transportation and other amenities.

Tips on Buying a Foreclosed Home

As newly appointed CEO of Global Capital Advisors, Kevin Fitzgerald draws on extensive real estate experience garnered in his previous role with U.S. Advisor, LLC (DBA U.S. Advisors, LLC). In addition to acquiring of $2.4 billion in properties, including foreclosure properties, while at U.S. Advisors.

When you buy a foreclosed real estate owned (REO) home, you deal directly with the bank that financed a defunct loan. This most likely enables you to get a good value on the property, though it may require you to navigate legal and logistical processes yourself. You may need to do your own research to determine the home’s market value and thus what a competitive offer would be. This frequently requires you to determine how fast the home is likely to sell, which helps you to decide whether to make a low or a high offer. If the home is projected to sell quickly, then it will be necessary to make a high offer.

EB-5 Visa Opportunities for Real Estate Investors, by Kevin Fitzgerald

The EB-5 visa program provides a streamlined path to United States citizenship for foreign investors. Initially introduced in 1990, the program has swelled in popularity in recent years because of two factors: the weakness in the U.S. housing market and the program’s job-creation requirement.

In order to qualify for an EB-5 visa, an individual must invest at least $1 million, or at least $500,000 in an economically troubled area, and that investment must create a minimum of 10 permanent jobs. In return, the investor receives a green card, which confers permanent resident status and can lead to citizenship.

Since the collapse of the housing market that launched the recession, foreign investors have flocked to EB-5 visa opportunities in distressed U.S. housing markets. These investments benefit all parties: communities enjoy increased employment and an influx of investment, and investors are able to secure property in the United States, along with improved odds of obtaining citizenship.

About the Author
As CEO of U.S. Advisors, Kevin Fitzgerald managed real estate acquisitions worth billions of dollars.

Trends in California Home Prices, By Kevin Fitzgerald

Since 1975, home prices in California have steadily risen, with the exception of the rapid decline following the 2008 burst in the housing bubble. The average annual rate of home value appreciation has been 5.7% from 1975 to 2011. The average home price in California peaked at around $535,000 in the spring of 2006. Home prices have been at a low of about $300,000 since late 2008 and early 2009. But housing prices are starting to slowly rise, particularly in the Los Angeles and San Francisco metropolitan areas.

This situation presents an ideal opportunity for investors to acquire housing at historically low prices. Investors buying houses can lease them for a profit or hold them for appreciation, as the housing market continues follow historical trends and return to higher values. Investors have the opportunity to seek the help of property management and investment firms in acquiring and managing their properties, making maintenance and upkeep simple and profitable.

About the Author:

Kevin Fitzgerald formerly served as the CEO of U.S. Advisors, LLC. He has years of experience in real estate investment.