Kurt: Some of the benefits of working with an EB5 business plan writer include their access to data subscriptions and their knowledge of USCIS memorandums and Requests for Evidence (RFEs) that have come out (quietly) over time. ‘Matter of Ho’ was a nice starting point for the industry, but it's evolved since then and one really does need to keep an eye on new precedent decisions.
Phil: It's really important to stay abreast of all USCIS comments and memoranda. It really helps to make sure that your business plan gets through the adjudication process with as little resistance as possible.
Marge: Data subscriptions are very helpful. For example, say for a 50,000 square foot hotel, we’re trying to determine whether or not the cost provided by the developer is within the realm of reason. If there are big variances between the figures provided and the data sets we’re referencing, we try and figure out where these are coming from, such as which cost segments are higher than this particular market calls for?
It gives you an opening for a discussion with your developer to say the numbers are just a little too far off.
Other subscriptions are Reis Reports, which does a multiple of real estate types in different markets, i.e. office or industrial. As far as restaurants, the National Restaurant Association puts out a publication every year that goes into both trends and actual sales per square foot or sales per seat in different types of restaurants.
Kurt: Martin, do you see any difference in working with an EB5 specialist business plan writer versus working with somebody who is a bit new to the industry?
Martin: Absolutely. I regularly have clients who say, "Oh, gee, I've been writing business plans for years." I try to be nice and supportive and kind of say, "Well, that's great. Let's have you do a draft and that could maybe help the EB5 business plan writers."
EB5 business plan writers know what metrics to include. This is what they do for a living, and in the long run, it's going to save a lot of time and money.
I tell my clients that it's going to save them a lot of time and that it could possibly prevent an RFE. Getting an RFE will likely cost tens of thousands just to get a response from all the professionals, which in turn delays the project and perhaps delays getting the EB5 funding in.
At that point, they usually listen. I think it's critical to use an EB5 experienced business plan writer on all EB5 projects.
Phil: As someone who has worked in the industry for a while, another interesting thing that I have noted is how different attorneys interpret matters of law in different ways, where there is room for interpretation, and how these interpretations apply in different situations.
For example when looking at the 2-year construction requirement to allow for the counting of direct construction jobs, some attorneys would say that the timeline starts when the digging starts, while others say the safer bet is to count only from the beginning of vertical construction.
It's not our place as business plan writers to advise on matters of law but sometimes, when we ask very detailed questions, we'll elicit responses that perhaps the attorneys hadn't thought of yet. It's part of our job in a sense. We can say, "Look, we've heard different attorney interpretations on this issue, but we would advise that you take this up with your attorney before we start writing the plan just to make sure everything is aligned properly.”
Similarly, the attorneys have also advised us of RFEs they have seen in the course of their time in EB5. That helps us. We’ve developed a list of RFE notes that we refer to which apply in different situations.