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DIRECT EB5 EXPLAINED
EB5 programs are marketed under two formats. Regional Center Program and Direct Programs.
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Regional Center Participation is an investment vehicle wherein individuals pool their funds to purchase a property. This is accomplished by each party owning a share of the property.
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Direct programs are wherein the EB5 investor purchases or starts a new business and manages all of the day to day activities of the business. The 5 Borough EB5 program is a Direct Investment Entity.
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In speculative development wherein the property is yet to be built, the project is known as a Blind Pool. This means the EB5 investor tenders all the funds and then the manager builds the project.
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The 5 Borough EB5 program will focus on a ten lane manufacturing facility. Each investor (hereinafter referred to as the "EB5 LANDLORD") will have a master lease franchise for one (1) of the ten (10) lanes. Each land will manufacture modular one and two bedroom units. The time to manufacture in the first phase of start up will be 6 weeks for each unit. Each lane will be capable of building 10 to 12 units at a time. Total units per lane will be 80 to 96 units annually.
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In a modular development each individual unit (apartment) has its own Title Deed. Similar to a title for a new car. That Title Deed shows who the partners are in that individual apartment unit. Once the unit is affixed to the real estate a deed is issued and delivered to the EB5 Landlord.
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The EB5 landlord will have a ready market for his/her finished modules as the manager of the plant will be continuously marketing 100 unit buildings via private placement real estate offerings.
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The 5 Borough Project is created to build apartments to fill the needs of more than 100,000 asylum seekers and conventional low income residents.
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The EB5 Landlord once the manufacturing facility is equipped and employees are trained by the affiliate of the managing member will operate his/her lane within the facility and start to manufacture Studio, One (1) bedroom and Two (2) bedroom housing units. These units will be shipped by rail and/or trucked to the construction site and assembled to create a 100 unit apartment community.
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It is projected at the EB5 Landlords discretion (not required) that following the five (5) year lease term of the program all 100 units will be sold. Each unit will be sold to the individual lessee’s after five (5) years at a minimum sale price of Three Hundred Fifty Thousand Dollars, ($350,000.00) per unit for a total minimum price for the 100 unit structure of Thirty Five Million Dollars, ($35,000,000.00). Total real estate, construction, installation and transportation costs are projected at $135,000.00 per module, ($13,500,000.00). Gross ROI of $21,500,000.00, ($215,000.00 per module.
Land cost via purchase or lease, Construction, Shipping and assembly is estimated at Eighty Thousand Dollars per module unit and fifty five thousand dollars for real estate, installation and misc costs, for a total of $135,000,00 per module.
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