Equity vs. Debt: Find Out What Sets American Life Apart
Start Your American Life with Real Ownership
Unlike other EB-5 programs which offer a loan-model, when you invest with American Life, you get actual equity ownership and participate in the success of the project. This lowers your risk, simplifies the structure of the investment, and generally will result in a better return on your investment. You are accepting there is risk in your investment, you should share in the reward!
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What You Need to Know About the Equity Model vs. the Debt Model
The Equity Model
The project is owned directly by the EB-5 investors
The Competitors' Debt Model
The project is owned by a third-party developer
Risk and Security
The investor is investing in a partnership in which they are the actual owner, which means lower risk.
Repayment is based on a third-party developer replacing and repaying the loan at a future time, which can mean higher risk.
Protection of Capital
Titled ownership is on record with the U.S. government and the partnership’s U.S. tax return. The investor is the owner of the project, including land and hotel franchise.
The project is not on record under your name, but the name of a third-party developer. You may have a recorded lien, but the capital structure can be complex and you may not be in “first position.”
Participation
Profits from the project are shared with the investor.
Profits from a project go to the promoter.
Financial Returns
Investor receives 50% of project’s distributable income attributed to their interest or a fixed return after the hotel is open for six months.
Generally a 1% return on capital.
Transparency
Simple, straight-forward ownership structure with ownership divided between a limited number of partners based on the investment. Investors receive quarterly performance reports to stay informed.
Complex project capital structures with different rights and protections.
Debt Ratio
40-60% equity in projects, resulting in much lower risk.
Generally less than 10% developer equity, which is high risk.
Liquidity
Return of capital upon sale or project, refinance, or through the independent resale market for Limited Partnership interests.
Capital is returned only if and when the loan is repaid.
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The Equity Model
The project is owned directly by the EB-5 investors
-
Risk and Security
The investor is investing in a partnership in which they are the actual owner, which means lower risk.
-
Protection of Capital
Titled ownership is on record with the U.S. government and the partnership’s U.S. tax return. The investor is the owner of the project, including land and hotel franchise.
-
Participation
Profits from the project are shared with the investor.
-
Financial Returns
Investor receives 50% of project’s distributable income attributed to their interest or a fixed return after the hotel is open for six months.
-
Transparency
Simple, straight-forward ownership structure with ownership divided between a limited number of partners based on the investment. Investors receive quarterly performance reports to stay informed.
-
Debt Ratio
40-60% equity in projects, resulting in much lower risk.
-
Liquidity
Return of capital upon sale or project, refinance, or through the independent resale market for Limited Partnership interests.
-
The Competitors' Debt Model
The project is owned by a third-party developer
-
Risk and Security
Repayment is based on a third-party developer replacing and repaying the loan at a future time, which can mean higher risk.
-
Protection of Capital
The project is not on record under your name, but the name of a third-party developer. You may have a recorded lien, but the capital structure can be complex and you may not be in “first position.”
-
Participation
Profits from a project go to the promoter.
-
Financial Returns
Generally a 1% return on capital.
-
Transparency
Complex project capital structures with different rights and protections.
-
Debt Ratio
Generally less than 10% developer equity, which is high risk.
-
Liquidity
Capital is returned only if and when the loan is repaid.
Choosing the Investment Model for You
Unlike most other regional centers, American Life offers two options when it comes to your investment.
Option A
American Life’s Preferred Equity option provides investors with a similar structure to an EB-5 “loan model”, with a fixed return, but with the added safety and security of being an equity owner in the project. Investors have a targeted date for return of their investment (usually 5 to 7 years from the opening of the hotel).
Option B
American Life develops exceptional hotels. Investors that choose option B participate in the profits of the hotel and the potential increase in the overall value of the hotel property when it is sold at a future date. As an equity owner, the EB-5 investor receives a more significant but variable portion of the distributed income and capital gain associated with their limited partnership interest. Historically investors that choose this option have received significantly higher rates of return than any competing EB-5 programs. You’re taking the risk, why not enjoy the potential rewards?
Have More Questions About Your Potential Investment?
Take a look at our FAQ to find the answer. And if you don’t see it here, feel free to get in touch.
What is the EB-5 investor rate of return?
As an American Life equity-based investor, you participate in the profits of the project. Our investment offering documents include forecasted returns and profits from the operations of the project. The return on investment is generally much higher than investors’ experience in our competitors’ loan models.
What is American Life’s success rate for receiving the EB-5 visa?
Since 1996, the I-526 approval rate for American Life has been almost 100%. Any denials or delays we have experienced are generally based on issues with investors proving the source of their invested funds.
How do I invest?
A prospective investor can first register by filling out the contact form, and an accreditation form to receive offering materials (investment offering prospectus).
In terms of investing, once you sign the official English version of the subscription agreement (in the prospectus) and we countersign the same document, you are admitted as a limited partner. The next step for the foreign investor is to follow our wiring instructions and send the investment funds. Typically within 1 to 2 days of your wire transfer, our office will send you a confirmation of receipt of the funds. If you are an EB-5 investor, a copy of the remittance confirmation will also be provided to your immigration attorney, so he or she can submit your I-526 petition.
At any stage of your decision-making process, please feel free to contact us via phone, send us an email or set an appointment online to speak to one of our managers.
Is my EB-5 investment guaranteed?
No. The law requires an EB-5 investment to be “at risk.” American Life works to minimize that risk with its equity-based model of investment.
What are the risks for my EB-5 investment?
As in any investment, there is a risk of total loss. By U.S. regulations, all funds must be put at risk. Risk factors differ among projects, but general risks include economic conditions, owning of real estate investments, law changes, and other risks related to a private investment offering. For a full list of risks related to particular investment, please refer to the offering material.
Still have questions?
You can visit our FAQ page for more answers to your EB-5 visa questions, or schedule a call to speak with an expert from our team.
Schedule a CallPartner with the Trusted Name in EB-5 Immigration
American Life is the longest established EB-5 program in the United States, helping thousands of investors and their families achieve their American Dream. Are you ready to get started?
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8,000+ EB-5 Visas Granted
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3,000+ Investors
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45+ Projects Completed
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100% Required EB-5 Job Creation
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$1.5 B Total Market Value
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$225 M Capital Returned
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3,400+ I-829 Approvals
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$285 M Profit Distributions
Our $1.5 Billion Investor-Owned Real Estate Portfolio
Our portfolio of critically-acclaimed EB-5 equity projects includes partnerships with global brands like Marriott, Hilton and Hyatt hotels. It’s proof of our ability to develop successful, job-creating EB-5 projects that enhance the communities we work in, while also helping our investors achieve their American dream.
