Comment: Where Are The 900K Wires

Many banks which have handled the bulk of EB5 wire transfers and escrows in pre 2020 EB5 market are reporting that there are no wires at the $900K level. Issuers who are in touch with these banks have concluded from that there is no EB5 market at the $900K level. This is a mistaken conclusion because it is based on incomplete information.


More than half dozen of our clients have reported that:

  • They have had a number of investors sign subscription agreements at $900K level
  • Many investors have engaged immigration attorneys to work on the source of the $900K
  • Some investors have paid all or part of the admin fee
  • One investor has transferred $100K+ of the total investment amount
  • It appears that doing source of funds for $900K takes longer than $500K
  • In the absence of a deadline, investors are taking their time to wrap up the investment process

What explains these two conflicting pieces of information - the bankers' report that there is no $900K market, and reports from our clients confirming that the $900K market does exist? The fact is that the networks in EB5 industry have changed. Everyone tightly connected to the giant real estate projects of the pre-11/21 EB5 world were the primary sources of information on the EB5 industry--whether they were banks, business plan writers, securities attorneys, economists, immigration attorneys or developers themselves. In the new EB5 market the same players who had all the information, suddenly have no information, since they are no longer in a TEA. The EB5 market has shifted to small projects--projects with as few as 5-10 investors. These players because of their small scale cannot see the whole picture, and furthermore they do not use the EB5 professionals that were used by the giant developers of the past. Everyone seems to be still relying on the past trustworthy sources for information, but those same sources do not have information any more because EB5 investments are taking place with a large number of smaller, newer players that are not connected to them. With 50% of the top highly connected nodes gone from the past EB5 network, 100% of the old network is defunct. Everyone is flying blind and will stay blind. It will take months to years for any patterns to emerge from this new highly fragmented new network.


As direct reliable information is no longer possible, the giant developers that are used to a high degree of certainty will find the EB5 market increasingly unsettling, and not worth the uncertainty, since they have capital available through much easier channels than EB5. The new smaller EB5 players often run operating companies that are used to a higher degree of uncertainty in their businesses and uncertainty in their capital raises as well--so for them EB5 remains a good option. EB5 industry seems to be shifting from almost exclusively real estate projects to a greater proportion of manufacturing projects (real estate will continue to dominate, but its market share may well shrink from 95% to 65%). Information is in Networks. Past players who were connected to giant real estate projects, will continue to have incomplete and therefore misleading information about the EB5 market going forward--because the giant projects that were once the central hubs of the EB5 information network are gone. That old network is now replaced by new widely distributed and disconnected networks where information is smaller in quantity and much greater in uncertainty. ILW will continue to bring you such information as we have as we go forward into this brave new world.

ILW estimates the 2020 EB5 market to be more than $1 billion. If you are raising EB5 capital in 2020, we have identified a very small number of specific opportunities in the new EB5 market. Contact us for a conversation on what we can do for you in this brave new EB5 world by emailing us at webmaster@ilw.com, calling us at 212-545-0818 or online.

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