Due Diligence Report:
All Points North
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Investment Overview
All Points North (APN) is a premier behavioral health provider that combines cutting-edge mental health and addiction care with world-class treatment facilities. This EB-5 investment opportunity supports the development of Phase 2 of APN's flagship facility in Vail, Colorado, a project that will further enhance its capacity to meet the growing demand for high-quality behavioral healthcare. Phase 2 expands the existing lodge and treatment facilities, enabling it to operate at full capacity. With an anticipated opening in April 2027, this development is projected to reach an ongoing concern valuation of over $154 million, positioning APN as a leader in the next generation of behavioral health care.
The EB-5 Investment (NCE)
The NCE (new commercial enterprise) for the project is APN Colorado Investors, LLC. The NCE is responsible for the EB-5 loan raise.
Capital Stack
The total cost for the All Points North Lodge Phase II project is estimated at $124.5 million, with the EB-5 loan comprising a substantial portion of this funding at $72 million from 90 EB-5 Investors. The remaining non-EB-5 funds includes $12.5 million in equity provided by Auberge Holding Co., LLC and a $40 million construction loan. This diversified funding strategy highlights a strong financial foundation for the project, reducing reliance on any single funding source and promoting financial stability throughout the construction phase.
Exit Strategy
EB-5 investors will have multiple pathways to exit their investment. The preferred equity for EB-5 investors is structured to be repaid through cash flow from operations, refinancing efforts, or a potential sale of the company. In the event of a sale, EB-5 investors hold the first position for equity repayment. Likely buyers would include private equity firms, insurance companies or a large hospital system looking to get into behavioral health. Should the company not be sold by June 2029, the manager will initiate a put option, requiring the company to redeem the EB-5 investors’ preferred equity. This put option can be deferred for one year, allowing flexibility for the company. At the time of redemption, investors may choose to exit or retain their stake, remaining invested in the company.
Use of Funds
The funds for the All Points North project will cover a wide range of essential expenses, ensuring the facility's successful development and operation. These costs include land acquisition, construction, architectural and interior design, marketing initiatives to attract clients and raise brand awareness, taxes, financing fees, legal expenses, insurance, and more. Each of these components is crucial in building and positioning the facility as a leading high-end treatment center.
The most substantial portion of the budget, however, is allocated to construction, which amounts to $80,112,403 or 64.3% of the total project cost. This allocation reflects the facility's high-quality, durable construction standards, which will meet the requirements for luxury healthcare environments. The construction budget covers site preparation, building materials, labor, utilities, and necessary infrastructure, all designed to support the advanced treatment capabilities and upscale amenities of All Points North. Additional funds will be used for specialized areas, such as advanced medical equipment, therapeutic amenities, and technology infrastructure to support cutting-edge treatment modalities. Finally, allocations for legal fees, regulatory compliance, and insurance are critical for risk management, ensuring that the project adheres to all legal and operational standards, thereby protecting investors' interests.
Investment Structure
EB-5 investors are invested in APN Colorado Investors, LLC, the New Commercial Enterprise (NCE) which in turn is a preferred equity investor in Auberge II LLC, the Job Creating Enterprise (JCE). The complete simplified organizational structure is displayed below with the red arrow representing the flow of funds from EB-5 Investors:
Security and Collateral
The preferred equity investment provides EB-5 investors with a priority return and repayment position. Their investment is secured by the underlying assets and cash flow of the expanded All Points North Lodge facility, and, if the company is sold, EB-5 investors will be the first equity holders to be repaid before private equity investors and management. Cushman and Wakefield did an appraisal of Phase 2 in January 2024 and valued the property on completion at $134m and $154m upon stabilization, providing ample asset coverage after the construction loan is paid off. Furthermore, there is a $25 million guarantee from Auberge Holdings (APN’s managing entity) to cover the preferred payments to EB-5 investors.
The EB-5 Investment Process
The following flow chart provides a basic explanation of the EB-5 investment process, from the creation of the NCE to verification of jobs.
Financial Projections
The project boasts a robust revenue model, generating a minimum of $90,000 in fees per patient. Over the past three years, APN has demonstrated impressive growth, with total revenue rising from $26 million in 2021 to an anticipated $72 million in 2024. While APN has been operating at a net loss during this expansion phase—common for growth-oriented companies as they opened six satellite facilities—net income is projected to approach break-even in 2024. Looking ahead, the company expects to achieve a net profit of approximately $18 million in 2025.
The Project (JCE)
The Location
The project is situated in Vail, Colorado, a renowned destination celebrated for its world-class skiing, breathtaking mountain scenery, and year-round outdoor activities. Located in the heart of the Rocky Mountains, Vail is a premier resort town that attracts visitors from around the world, offering amenities ranging from luxury hotels and fine dining to an array of seasonal events and festivals. This location provides an ideal environment for a health and wellness facility, offering clients access to both therapeutic treatments and the restorative, tranquil surroundings of nature.
Specifically, the project is located on a 3.43-acre site at 2205 Cordillera Way, Edwards, CO 81632, a picturesque and accessible area within the Vail Valley. This expansive location allows for the development of a comprehensive treatment and lodging facility, with views of the surrounding mountains and forests. With convenient access to major highways and Eagle County Regional Airport, the site provides clients and their families with a secluded, peaceful setting while remaining close to the amenities and services of Vail and Edwards.
Project Details
The project entails a significant expansion of the All Points North (APN) Lodge, an existing 77-bed residential treatment facility in Vail, Colorado. This expansion will involve constructing a new three-story, 100,000-square-foot residential treatment facility, adding 84 beds and state-of-the-art medical, clinical, and operational spaces. The expanded facility will enhance APN’s current services and support the introduction of innovative, evidence-based treatment methods to serve a wider range of patient needs. The new facility will feature six private rooms, fifteen semi-private rooms with a total of 30 beds, and twenty-four double rooms housing 48 beds, providing flexibility and comfort for patients.
In addition to the new accommodations, patients in the expanded facility will have access to APN’s established amenities, including coffee and juice bars, a fitness center, multiple swimming pools, and a wellness spa with a steam room, sauna, massage services, facials, and hydrotherapy. These amenities contribute to APN’s holistic wellness environment, fostering healing and relaxation in a serene mountain setting.
The project also focuses on offering specialized programs tailored to provide an individualized treatment experience for each patient. APN’s Behavioral Health, Coaching, Athletics, and Executive Health programs support a comprehensive approach to recovery. These programs include peak performance coaching, intensive sports training, and specialized boot camps designed to enhance both psychological and behavioral health. APN also integrates concierge medicine for primary and preventive care.
The expanded APN facility will provide a wide range of care options, including residential treatment, mental health services, intensive outpatient programs (IOP), primary care medical services, and sober living arrangements. Furthermore, APN offers long-term support through aftercare programs that include telemedicine and telecoaching, ensuring continuity of care and support for patients beyond their stay.
Timeline
Construction will commence in March 2025, with a planned completion date in March 2027. This timeline reflects a two-year construction period, incorporating the development of the new 100,000-square-foot facility, site enhancements, and integration with existing operational systems to ensure a seamless transition upon completion. Following final inspections and regulatory approvals, the facility is scheduled to become operational in April 2027. This phased construction approach has been planned to minimize disruption to the existing lodge’s operations and to allow for a smooth onboarding of new medical, clinical, and support staff in preparation for the facility’s opening.
Targeted Employment Area
Under the EB-5 immigrant investor program, a foreign national can become eligible to obtain United States permanent resident status by investing either $1,050,000 or $800,000 in a new commercial enterprise in the United States. To participate in the immigrant investor program through investing the lower US $800,000 amount, the alien must invest their capital funds into a geographic area that qualifies as a Targeted Employment Area. The most common types of TEAs are high unemployment areas and rural areas.
The location of the project qualifies as a rural TEA, meaning that EB-5 investors qualify for the reduced minimum investment amount of $800,000 and priority processing of Form I-526. To qualify as a rural area, an area must have no more than 20,000 residents; not border a municipality with a population of 20,000 or more; and not be located within a metropolitan statistical area. Each year, 20% of EB-5 visas are set aside for rural TEA investors, which could lead to faster approval. Due to its rural status, investors in the project also qualify for priority processing and may experience processing times significantly faster than investors in non-rural projects.
Job Creation
EB-5 investors are required to create at least 10 full-time jobs for US workers as part of the requirements of the EB-5 program. The project aims to subscribe a maximum of 90 EB-5 investors. In order to provide the required job count to every EB-5 investor, the project needs to create 900 jobs for US workers. According to an economic impact analysis for the project by Vermilion Consulting LLC, created in August 2024, the project will generate significant positive economic benefits for the local, regional, and US economy. The project is estimated to create 1,347 permanent new jobs. This number was calculated by using the RIMS II econometric methodology. Each investor can be assigned approximately 15 jobs, surpassing the minimum requirement of 10 per investor and decreasing immigration risk for EB-5 investors. All required jobs are expected to be created by the end of the conditional residency period for all EB-5 Investors. Job verification will be completed by “reasonable methodologies,” such as the RIMS II econometric methodology used in this report.
Market Opportunity
The U.S. behavioral healthcare industry encompasses a range of sectors that address various healthcare needs, including acute care hospitals, rehabilitation centers, psychiatric hospitals, nursing homes, assisted living facilities, and home healthcare services.
Psychiatric hospitals provide structured, intensive treatment programs for individuals dealing with substance dependency and mental health disorders across all age groups. These facilities integrate care from physicians and healthcare professionals, offering a range of services such as diagnostic testing, adjunct therapies (including occupational and recreational therapy), group and individual therapy, and educational programs. Additionally, there are specialized psychiatric hospitals catering to individuals with intellectual disabilities.
Severe mental illnesses can dramatically impact a person’s life, making everyday tasks challenging. Conditions such as depression, anxiety, schizophrenia, bipolar disorder, and substance abuse affect millions of Americans - distorting an individual’s worldview and hindering their ability to work, socialize, and manage daily responsibilities. Substance Use Disorders are recognized as psychiatric illnesses. Addiction to drugs or alcohol is treated through inpatient and outpatient programs that include individual and family therapy. Dual diagnosis, where addiction coincides with other mental health conditions, necessitates integrated treatment.
According to the 2023 United States National Survey on Drug Use and Health (NSDUH), over 48 million Americans battled a substance use disorder in the last year. Genetics account for 40-60% of a person’s risk of addiction, as well as environmental factors such as a chaotic home environment, abuse, peer influences, and community attitudes toward drugs. In 2023, 54.2 million Americans needed treatment for a substance abuse disorder - only 23% received the treatment needed.
Addiction is considered a highly treatable condition and recovery is attainable for those who seek help. All Points North will specialize in the treatment of substance abuse, accepting both private pay and private insurance patients. The Project will operate under NAICS industry cluster 623: Nursing and Residential Care Facilities. The U.S. behavioral healthcare market presents a significant opportunity to address the unmet needs of millions affected by mental health and substance use disorders. With limited access to care, demand for comprehensive and specialized treatment facilities continues to grow. All Points North is well-positioned to meet this demand, offering accessible, high-quality treatment for addiction and mental health under the expanding Nursing and Residential Care Facilities industry.
Competitive Market Analysis
The primary market area (PMA) for APN extends approximately 150 miles around the facility, but its reputation and luxury offerings are expected to attract clients nationally and internationally. This conclusion is supported by a review of demographic trends, demand for services, and the facility’s appeal to upscale clientele. With the planned expansion, APN is preparing to meet a growing demand for luxury behavioral health services. The added beds align with APN’s vision to attract patients on a broad scale, with enough demand in the marketplace to sustain the additional capacity.
Competitors APN faces competition from other luxury rehabilitation facilities across the country. Notable competitors include Cliffside Malibu, Hazelden Betty Ford Foundation, Passages Malibu, Sierra Tucson, and others, offering similar high-end services with rates ranging from $41,000 to over $100,000 per month. APN distinguishes itself by offering comprehensive, integrated treatment tailored to a diverse clientele. APN is also one of the few luxury facilities located in Colorado - further from the hustle and bustle of everyday life that many patients are currently experiencing. APN offers a snowy escape where patients can focus solely on their health and recovery.
In 2024, APN’s target demographic consists of individuals earning over $100,000 annually, with PPO insurance, primarily college-educated, English-speaking, and aged 18 and above. Specialty populations include military veterans, professionals, athletes, and members of the LGBTQ+ community, aligning with APN’s inclusive, upscale approach to behavioral healthcare.
For more details, click here to watch an interview with APN’s CEO, Noah Nordheimer.
Legal Overview
The project has met all the legal requirements of an EB-5 offering, ensuring compliance with the relevant statutes and regulations. Notably, the project’s I-956F, Application for Approval of an Investment in a Commercial Enterprise, was submitted to USCIS on July 16th 2024 and approved on September 3rd, 2024. Approval of this application confirmed that the project satisfies the stringent criteria set forth by the USCIS to qualify as an EB-5 offering. Furthermore, the project aligns with the requirements of the Reform and Integrity Act (RIA) of 2022, which mandates enhanced transparency and integrity measures for EB-5 projects. In addition to regulatory compliance, the project is on track to meet the job creation requirements stipulated by the EB-5 program, demonstrating a robust plan to generate the necessary employment opportunities for U.S. workers. This adherence to legal and job creation standards underscores the project's viability and commitment to fulfilling the objectives of the EB-5 program.
Management
The Regional Center: Smith Rockies Regional Center
Smith Management Services, LLC, operating as EB5 Coast to Coast, is a leading EB-5 regional center operator with a network extending across 49 states. Established in 2012 by Steve Smith, the company has rapidly grown to sponsor 42 active projects, representing hundreds of investors nationwide, with a fundraising goal of over $1 billion in EB-5 capital. To date, EB5 Coast to Coast has successfully raised more than $250 million across its portfolio of regional centers, underscoring its solid track record and industry presence. Among its achievements, 15 projects have reached successful completion, with four of these projects returning 100% of investor capital. Over 185 EB-5 Investors have received their I-526E approval and over 70 Investors have received their permanent green card thus far.
EB5 Coast to Coast has numerous successful projects including:
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Stazione25: A luxury apartment complex in Seattle, WA.
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The Savoy at Lake City: A 55+ senior community in Seattle, WA.
EB5 Coast to Coast continues to focus on securing and managing high-quality, high-impact EB-5 projects, ensuring investor confidence and maximizing economic growth across various U.S. regions.
The Developer: All Points North
Noah Nordheimer founded All Points North in 2019, building on his 13 years of experience in the behavioral health field. Before launching All Points North, he established the Concerted Care Group in 2014, which became a successful venture in the industry. With strategic vision and leadership, he secured $9 million in EB-5 funding to help finance the Concerted Care Group, which was later sold to Windrose Health Partners in 2020. Following the sale, all EB-5 investors who had completed their sustainment period received full repayment by June 2021. Demonstrating a strong commitment to the success of All Points North, Nordheimer has invested $15 million of his own capital into the company. His proven track record and personal investment underline his dedication to creating impactful behavioral health solutions through All Points North.
Construction: GE Johnson
With over 56 years of experience in the construction industry, GE Johnson has successfully delivered a diverse range of projects spanning healthcare, education, commercial, and industrial sectors. Their expertise includes the completion of numerous complex and high-profile projects, showcasing their commitment to quality and excellence in every endeavor. In the healthcare industry, GE Johnson has built over 12 million square feet and spent over $3 billion in construction for healthcare facilities.
GE Johnson’s successful track record in Colorado includes projects such as:
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Vail Health Hospital: East Wing Expansion
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Craig Hospital: Neurorehabilitation and Research Center
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The US Olympic and Paralympic Museum in Colorado Springs
Legal Counsel: Baker Donelson
As one of the largest law firms in the U.S., Baker Donelson offers more than 650 attorneys seamlessly connected across 23 offices in the United States. Baker Donelson represents companies in connection with securities law compliance, reporting, mergers and acquisitions, public and private offerings (both debt and equity) and a wide variety of related matters governed by federal and state securities laws. Baker Donelson's Immigration Group is dedicated to partnering with clients to develop strategies that help meet immigration needs while at the same time ensuring the efficient and cost-effective movement of key personnel worldwide.
Economic Analyst: Vermillion Consulting
Founded in 2011, Vermilion Consulting assists a diverse range of organizations in both the public and private sectors in maximizing the benefits of the federally mandated Immigrant Investor Program (EB-5). The firm offers expert guidance on project feasibility, compliance with financial structures, job creation methodologies, and targeted employment area analyses. Recognized as one of the leading providers of EB-5 economic analyses and business plans, Vermilion excels at connecting the right people and organizations, devising innovative solutions to complex challenges, and fostering collaborative teamwork to effectively address problems.
Strengths
Strong Developer Track Record
A key strength of this project lies in its developer's robust track record in the behavioral healthcare industry, providing a strong foundation for this expansion. The project entails the growth of an already operating and profitable medical treatment facility, All Points North, which has successfully established itself in a highly competitive market. The developer, Noah Nordheimer, brings over a decade of experience in the behavioral health field, having previously founded and sold the Concerted Care Group to Windrose Health Partners, a testament to his expertise and ability to generate value in this industry. Notably, the existing All Points North facility has demonstrated strong operational performance and profitability, underscoring the developer’s capacity to effectively manage high-end healthcare operations. The expansion project will build on this established success, leveraging an experienced team, well-established protocols, and a track record of delivering quality treatment services. Furthermore, the developer has a proven history of working with EB-5 funding, with previous projects achieving full repayment to investors, signaling financial discipline and reliability.
This project benefits from the stability and reputation of an existing brand and facility, reducing typical risks associated with new developments. With All Points North’s current profitability, the expansion is positioned for a strong market entry, targeting unmet demand for luxury addiction and behavioral health services. This strong developer track record provides investors with confidence that the project will be completed on time and within budget, with a high likelihood of success in meeting operational and financial targets.
Strong Regional Center Track Record
EB5 Coast to Coast has a proven and robust track record of success and has demonstrated its ability to navigate the complex regulatory landscape effectively. This history of accomplishment is reflected in high approval rates and a commitment to transparency and compliance with USCIS requirements. Such a solid foundation not only mitigates risks for potential investors but also positions the regional center as a trusted leader in the EB-5 investment landscape, ultimately increasing the likelihood of successful outcomes for all parties involved.
Rural Area
The project’s location in a designated rural area offers a significant advantage, as it qualifies EB-5 investors for a lower minimum investment amount of $800,000 instead of the standard $1,050,000. This reduced threshold can make the project more attractive to a broader range of potential EB-5 investors, enhancing the project’s competitiveness in the EB-5 marketplace by making it a financially viable choice amid other investment opportunities. Rural EB-5 projects are also given priority processing by USCIS, meaning investors have a faster pathway to approval.
High Demand and Recession Resistant Project in a Prime Location
The project is uniquely positioned to thrive due to high demand for behavioral health and addiction treatment services, an area that has proven recession-resistant over time. The need for comprehensive and high-quality mental health and addiction services continues to grow, driven by increasing awareness of mental health issues, a rise in substance abuse cases, and an emphasis on holistic health and wellness. This demand is particularly strong for high-end treatment facilities, like All Points North, which cater to individuals seeking personalized, discreet, and luxurious care options. As mental health and addiction challenges are largely unaffected by economic cycles, the services provided by the facility are considered essential, ensuring steady demand even during economic downturns.
Situated in a prime location, All Points North has the advantage of accessibility and appeal for high-net-worth individuals and professionals from major metropolitan areas. Located near direct flights to Eagle County Regional Airport and Denver International Airport, the facility is well-suited to attract patients nationally and internationally, positioning it as a destination for those seeking top-tier behavioral health treatment. The scenic location in the Colorado Rockies further enhances its appeal, providing a tranquil environment that is ideal for recovery and wellness, making it a preferred choice for patients who prioritize both treatment quality and setting.
Equity Funding
The project’s reliance on substantial equity funding provides a strong foundation for financial stability and long-term success. With a significant portion of capital coming from equity rather than debt, the project reduces financial risks associated with interest payments and loan maturities, enhancing cash flow flexibility and allowing resources to be directed toward operations, growth, and quality improvements. This funding structure strengthens the project's financial health and positions it to weather economic fluctuations, safeguarding the interests of EB-5 investors. Additionally, the equity funding demonstrates the commitment and confidence of the project’s developers, who have invested their own capital, signaling a vested interest in its success and aligning their goals closely with those of EB-5 investors.
Risks
The purchase of units in an EB-5 investment involves a high degree of risk and is suitable only for persons of substantial means who can bear the risk of loss of their entire investment and who have no need for liquidity in their investment. All prospective investors should carefully consider the following risks and consult their own legal, tax, and financial advisors prior to the purchase of units.
No Investment Diversification
Unlike a diversified portfolio that spreads investments across various assets to mitigate risk, an EB-5 investment is typically concentrated in a single project or business. This lack of diversification means that the success of the investment, and thus the fulfillment of visa requirements, is entirely dependent on the performance of that single venture. If the project fails or underperforms, investors not only face financial loss but also the potential risk of not meeting the criteria necessary to obtain permanent residency.
Success is Dependent upon the Successful Implementation of the Business Plan
The success of the company will largely depend upon the Borrower’s success in implementing the Business Plan for the benefit of the Borrower. Because many of the factors necessary for success are beyond the control of the Borrower, there can be no assurance that the Borrower will be able to successfully implement the Project Business Plan or carry out the Project Business Plan as circumstances require. Through its equity investment in the Project, however, the Borrower is incentivized to effectively carry out the Project Business Plan. The project is subject to insurance risks and distributions are not guaranteed.
The Investment is Illiquid
There is no established market for the United. There are a limited number of investors and strict restrictions on the transferability of Units. No complete assurance can be given that the Loan will be repaid or when it will be repaid.
Regulatory Risks
Potential changes in the EB-5 program regulations can directly impact investor opportunities and project feasibility. Legislative amendments or shifts in policy by the United States Citizenship and Immigration Services (USCIS) could alter investment requirements, processing times, or the criteria for job creation and project eligibility. Any regulatory changes that slow down the visa approval process may delay investors' ability to obtain green cards. The EB-5 program is currently authorized until September 2027. Changes to American political leadership may also alter the current and/or future state of the program.
Market Risk
Success of the project will, in part, depend on the local, national and global economies. An uncertain economic outlook may adversely affect consumer spending on residential housing, as consumers spend less in anticipation of a potential further economic downturn. Considering the current economic climate, several market risks need to be carefully evaluated, such as interest rate volatility, which can impact affordability, and inflationary pressures that may drive up construction costs. Additionally, changes in employment rates, regulatory policies, and global economic or political factors could further influence project demand and profitability.
Limited Transferability of Units
The units are not readily transferable and no transfer of Units may be made by Investors. Once you subscribe to the project, you may not transfer your units to another individual. The Units are being sold in reliance on exemptions from the registration requirements of the Securities Act provided by Regulation S and/or Section 4(a)(2) of the Securities Act or Regulation D, and may not be transferred or resold except as permitted under such laws.
Operational Risks
Delays in the construction timeline can lead to increased costs and missed deadlines, potentially jeopardizing project viability. The performance of contractors is also pivotal; inadequate workmanship, resource mismanagement, or financial instability among contractors can severely disrupt progress. Moreover, unforeseen environmental issues, such as adverse weather conditions, can cause significant setbacks and necessitate costly remediation efforts.
Possible Cost Overruns
Cost overruns may be encountered as a result of numerous factors. The increase in the domestic inflation rate, and the resulting increase in the federal interest rate, will increase construction and operating costs. Furthermore, other unforeseen issues may be encountered that otherwise require an increase in the development budget that have not otherwise been reserved for in the contingency fund. The timeline for completion of this project is uncertain, any delays could result in a cost overrun.
Exit Strategy Risks
The exit strategy primarily depends on the sale or refinancing of the expanded facility by June 2029, at which point investors can opt for their capital redemption. If a sale or refinancing does not occur by this date, APN has a contractual obligation to redeem the investors’ preferred equity, though it can defer this obligation for one additional year. This strategy presents risks as it relies on market conditions and APN’s financial position at the time of the planned exit. If APN cannot secure a buyer or refinancing, or if it lacks sufficient cash flow, it may be challenging to fulfill the redemption commitments, potentially impacting the timely return of investor capital.
Conflict of Interest
There is a potential risk of conflict of interest related to the project management. While the manager is committed to overseeing the project's operations, they are not obligated to devote all their time exclusively to this endeavor. This flexibility may lead to competing business interests that could impact their focus and decision-making regarding the project. Furthermore, there may be a conflict of interest and overlap between managing parties, as multiple stakeholders could have vested interests in the project's outcomes.
Lawful Source & Path of Funds
EB-5 Investors are required to provide documentary evidence showing the legal source of their funds and its pathway to the EB-5 investment. An investor may be unable to provide sufficient evidence for their funds and may not receive I-526 approval for this reason.
Limited Rights to Participate in Management
EB-5 investors will not make decisions with regard to the management and operations of the project. EB-5 Investors will have no role in the management or operations of the project.
No Assurance of Visa
There is no guarantee that an EB-5 investor will receive I-526E petition approval. The EB-5 Program has many requirements that must be met to the satisfaction of USCIS. The failure to meet even one of these requirements to the satisfaction of USCIS may result in the denial or revocation of an I-526E Petition. USCIS regulations governing lawful permanent residence for investors do not state specifically all the criteria that USCIS must apply to determine eligibility for the removal of conditions to lawful permanent resident status. Even after I-526E Petition approval, there can be no assurance that the Investor, his or her spouse or any of their minor, unmarried children will be granted lawful permanent residence. The grant of such immigration status is dependent, among other things, upon the personal and financial history of each applicant. Any one of the several government agencies may determine in its discretion, sometimes without the possibility of appeal, that an applicant for lawful permanent residence is excludable from the United States.
Investor Suitability
As a potential EB-5 Investor, understanding the risks and benefits of the EB-5 program is essential to determine if it is a suitable investment for you and your family. The EB-5 program is most suitable for investors who are seeking permanent residency in the United States. An investment in an EB-5 project is long-term, illiquid, high-risk, and has a low rate of return. The primary benefit of an EB-5 investment is permanent residency in the United States. The following pages will detail these points:
Foreign Nationals Seeking Permanent Residency in the United States
The primary benefit of the EB-5 program is permanent residency in the United States. This project and investment is most suitable for foreign nationals seeking a path to permanent residency and citizenship for themselves, their spouse, and any family members under the age of 21. Investors who wish to permanently relocate to the United States with the freedom to live, work, and study without restrictions are well suited to this investment.
Long-Term Commitment and Illiquidity
This investment is particularly suitable for investors who do not require immediate liquidity. The nature of EB-5 investments necessitates a long-term commitment, often spanning several years from the initial application to the final approval of permanent residency. Investors should be prepared for their capital to remain tied up in the project throughout the conditional residency period and beyond. This investment is non-transferable and highly illiquid, meaning you cannot sell the investment or transfer it to another investor.
This characteristic aligns well with the investment goals of individuals who can afford to allocate a portion of their portfolio to a non-liquid asset, focusing on the long-term benefits of U.S. residency rather than short-term financial returns. The potential for eventual returns on investment, coupled with the immigration benefits, makes this an ideal opportunity for those with the financial flexibility to sustain a longer investment horizon. If you are concerned about whether or not an EB-5 investment is appropriate for your specific financial situation, please speak to one of our registered broker-dealers to help evaluate your suitability for the EB-5 program.
Reduced Investment Threshold
Investing in a rural EB-5 project offers the benefit of a reduced investment threshold compared to urban projects. The minimum required investment for rural projects is $800,000, compared to $1,050,000 for non-rural projects. This lower threshold reduces the financial burden on the investor, while still providing the same potential benefits in terms of residency and return on investment.
Risk Tolerance
The EB-5 program requires that the invested capital be at risk to qualify, meaning there is no certainty of financial returns or even the return of the principal investment. This investment is suitable for investors who possess a high tolerance for risk, as there are no guarantees associated with EB-5 investments. Additionally, the success of the immigration process hinges on the project's ability to meet job creation requirements and other regulatory criteria. Investors must be comfortable with these uncertainties and should be prepared for the potential of financial loss. Those who can accept and manage these risks, while focusing on the long-term goal of obtaining U.S. permanent residency, will find this investment opportunity aligns well with their risk profile and strategic objectives.
Low Rate of Return
This project offers investors a rate of return at 0.65%. This is a fairly low rate of return in comparison to other investment types. However, it is important to consider that the primary benefit of the EB-5 program is not the return on investment, but the opportunity to gain US permanent residency. The value of this opportunity extends far beyond financial gains, as it opens doors to a host of benefits, including access to educational, professional, and lifestyle opportunities in the United States. This investment opportunity is particularly suitable for investors who prioritize the attainment of U.S. permanent residency over seeking a high rate of return on their investment.
Source of Funds
Ensuring that your EB-5 investment is well-documented and originates from a legal source of funds is imperative for compliance with program requirements and immigration laws. Detailed documentation demonstrating the lawful accumulation and pathway of funds provides transparency and strengthens the investor's application, mitigating the risk of delays or denials. Investors unable to demonstrate the legality of their investment funds are not suitable candidates for the EB-5 program. Investors must work with an experienced EB-5 Immigration Attorney to ensure that their source and path of funds is well-documented and legal.
Investor Information
Investor Management Participation
As a limited partner in this EB-5 project, investors will not have any management responsibilities. The experienced management team will handle all operational and administrative tasks, ensuring the smooth execution and oversight of the investment. This structure allows investors to focus on the benefits of their EB-5 journey, such as obtaining U.S. permanent residency, without the burden of day-to-day involvement in the project's management. This arrangement ensures that investors can have confidence in knowing that their investment is being professionally managed by a dedicated team.
Investor Communications
Investors will have access to inspect and receive information concerning the Fund including the information required to be delivered as per the Fund agreement, the information provided by the Manager for compliance with applicable USCIS rules and regulations, and
In Event of I-526 Denial
In the event of an I-526 denial for this project, the Joint Capital Entity (JCE) is required to return up to $9.6 million to the New Capital Entity (NCE) to refund denied investors. According to Section 8(l) of the Preferred Equity Purchase Agreement and Section 5.09 of the JCE’s LLC Agreement, the NCE must make commercially reasonable efforts to replace the denied investor's capital within 90 days. If replacement efforts are unsuccessful, the JCE must refund the NCE to facilitate the return of the investor's capital, provided the denial did not stem from fraud, misrepresentation, bad faith, or other immigration denials, with the total redemption limit capped at $9.6 million.
Voting Rights
Investing members in the project do not possess any voting rights regarding the management or decision-making processes of the Joint Capital Entity (JCE). This structure is designed to streamline operations and enable the management team to make prompt and effective decisions without the need for consensus or approval from investors. While this arrangement allows for efficient governance and swift response to market conditions, it also means that investing members relinquish direct control over the project's strategic direction. As a result, they must place their trust in the expertise and judgment of the management team to act in the best interests of the project and its stakeholders. This model is common in investment structures, particularly within EB-5 projects, where the focus is on leveraging professional management to achieve successful outcomes for all parties involved. However, potential investors should be aware of this limitation in their influence and carefully consider the qualifications and track record of the management team when making investment decisions.
Withdrawal
Members may withdraw from the company only by transferring their entire Membership Interest. Importantly, EB-5 Investors are not allowed to withdraw their EB-5 Investment prior to the end of their At-Risk Period. Should an EB-5 Investor withdraw any portion of their investment in violation of the agreement, the Manager is required to report the withdrawal to USCIS, which could result in the potential revocation of the immigration benefits associated with the EB-5 Investor's investment.
Tax Implications
Investors should consult with a personal tax advisor regarding the potential state and local tax consequences of an investment in the Company. There are restrictions on transferring, assigning, or disposing of the Units. Generally, a U.S. Investor will recognize capital gain or loss when they sell, redeem, exchange, or otherwise dispose of their interest in the Company, except for amounts related to interest (which will be recognized as ordinary interest income) if the U.S. Investor has not previously included the accrued interest income. The ability to deduct capital losses may be limited, and these limitations will vary depending on each taxpayer's situation. Therefore, each Investing Member should consult their own tax advisors regarding these limitations.
Subscription Procedures
Investors can make a deposit to the NCE’s general operating account to secure their unit. This deposit will count towards the Administrative Fee once the subscription process is complete. After making the deposit, investors need to pay the remaining Capital Contribution and Administrative Fee into the NCE’s Escrow Account and operating account within an agreed timeframe. If they miss this deadline, they will get their deposit back in full. Most investors will follow this standard process, but some may work out different arrangements with the NCE, like subscribing without a Subscription Deposit or paying in installments. The escrow agent will release the investor’s capital contribution from the Escrow Account once the NCE provide written instructions, as long as certain conditions are met, such as submitting required forms to USCIS and making timely payments. For detailed steps on how to subscribe, Investors should refer to the Subscription Agreement.
Disclaimer
September 2024
EB-5 Choice has undertaken an independent due diligence evaluation of the All Points North project, designed for foreign investors who intend to participate in the EB-5 Immigrant Investor Program.
The objective of this report is to accomplish the following:
1. Ensure compliance with the EB-5 Reform and Integrity Act of 2022.
2. Conduct an impartial and autonomous review of the offering documents.
3. Provide a concise summary of the significant provisions.
4. Employ appropriate procedures to verify the accuracy and reasonableness of the information provided by the offering party.
It should be noted that the review's scope may be limited to the documents supplied by the offering party if third-party information is unavailable. This report is not intended as a recommendation to invest or abstain from investing in the specific offering. Rather, its purpose is to consolidate the investment proposal, facilitate comprehension of the offering, and aid the reader in identifying its strengths and weaknesses through the procedures we have executed.
Any decision to invest should be made subsequent to a thorough review of all documents and consultations with appropriate professionals to determine suitability and risk tolerance. Furthermore, please be aware that the due diligence report reflects our viewpoint and does not incorporate potential developments or changes occurring after the report's listed date.
The “EB-5 immigrant visa” preference category is intended to encourage the flow of capital into the United States economy and to promote employment of workers in the United States. To accomplish these goals and so that foreign investors may obtain immigration benefits for having made an investment, the EB-5 Program mandates that:
(i) foreign investors must make a minimum capital contribution of $1,050,000; In certain rural areas or areas of high unemployment (“Targeted Employment Area” or “TEA”), the investment may be as low as $800,000.
(ii) that such minimum capital be deployed exclusively in job creating activities; and (iii) 10 full-time jobs be created on account of each investor.
Legal Notice
Please refrain from sharing this document with any unauthorized individuals or posting it online. Unauthorized dissemination of this information could lead to legal consequences. Your cooperation in maintaining the confidentiality of this document is greatly appreciated.
Please be advised that this due diligence report is provided solely for informational purposes and should not be construed as an offer to sell or a solicitation to purchase any securities mentioned herein. Any offers can only be made in compliance with relevant laws and regulations, and qualified investors must receive official offering and subscription documentation.
The report contains summaries of specific terms found in relevant documents and agreements. If any of the terms, conditions, or provisions in the actual documents and agreements conflict with or contradict the descriptions or terms provided in this report, the terms of the actual documents and agreements shall take precedence. In the event that a translated version of this report is created for convenience or any other purpose, the provisions of the original English version shall take precedence. If there are any discrepancies between a translated version and the English version, the original English version shall take precedence.
In the event of any discrepancies between the information presented in this report and the Company's Memorandum, the provisions of the Memorandum shall govern. None of the information or analyses presented herein are intended to serve as the sole basis for making any investment decision, and no specific recommendations are being made. Certain information included in this report may have been obtained or derived from sources prepared by third parties, and while we believe such information to be reliable for the purposes of this report, we assume no responsibility for its accuracy.
EB-5 Choice expressly disclaims all liability for any direct or consequential loss or damage of any kind arising directly or indirectly from: 1) reliance on any information found in this report, 2) any errors, omissions, or inaccuracies in such information, or 3) any actions taken as a result thereof.
Before making any major investment decisions, know your rights as an investor.
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