Frequently Asked Questions About The Investment
Working In Cooperation with
American Life Ventures LLC - Regional Center
Approved by USCIS 6-25-2008
Where is my capital invested?
Your capital purchases a share in a Limited Partnership (LP) in which you become a Limited Partner (shareholder). A new LP is set up for this project alone. The purchase price will be set by McCormick International, which acts as the General Partner, managing the design, construction, and providing property management of the completed project.
Why is McCormick International a better EB-5 than others?
A comprehensive prospectus is prepared for each Limited Partnership, detailing the investment costs, valuation and contractual arrangements. The LP raises sufficient capital from US citizens and immigrant investors, who invest on identical terms, to acquire and complete the project.
McCormick International cannot come back to you for additional funding. By investing into a Limited Partnership, your liabilities are limited to your capital.
McCormick International has been in the real estate business as a local company in the Tacoma/Seattle market for 25 years. For this EB-5 investment opportunity, our project is pre-approved under the American Life Regional Center named American Life Ventures LLC. American Life has successfully processed over 1000 green cards with 100% approvals on dozens of projects since 1996. They have processed more Regional Centers and more EB5 projects than any other company anywhere.
Do I receive income from the investment?
Although American Life is not the developer of this project, McCormick International is the developer, American Life is working in cooperation with McCormick International to submit this project to USCIS under the American Life Regional Center name.
Secondly, our EB-5 offers investors cash flow income because investors are the owners of an income producing property.
Third, investors are actual owners of the real estate property in our EB-5 projects. Most other EB-5 investments do not let investors own the real estate. Many EB-5 projects make loans to developers and hope those developers pay back that money. With our projects you as the investors are owners of the real estate, making it safer.
What is a Limited Partnership?
Stage 1. Cash. When you invest, your capital will go into an interest bearing deposit account or into US Treasury Bills. The interest, proportional to your investment, is paid monthly in arrears without any management charges or deductions. As your capital is used to build or refurbish the building, the income will reduce as the funds are used.
Stage 2. Rent. As tenants move into the building, all rents received are paid monthly in arrears, proportional to your investment, less a management charge as you would expect from any property management company.
A limited partnership combines corporate limited liability with partnership taxation. The limited partnership, formed by filing a charter with the state government, consists of a general partner and one or more limited partners. The charter details the rights and powers of the limited and general partners, percentages of ownership, and distribution of profits. The general partner manages the business. As in a corporation, the limited partners are passive investors liable only for the value of their investment. As in a general partnership, limited partnership income is taxed at the partner level, not at the entity level.
Is my investment guaranteed?
McCormick International could use a limited partnership or limited liability company with equal effect. McCormick International uses a limited partnership because the USCIS (US Citizenship and Immigration Service) regulations specifically refer to limited partners, exempting them from the requirement to actively participate in the business. The regulations make no mention of limited liability companies.
No. The EB-5 legislation requires an "at risk" investment. This does not mean your investment must be risky, but must be without guarantees or redemption rights.
What are my risks?
The USCIS mandates that all EB-5 investments carry financial risks, but we devote our best efforts to minimizing the amount of risk by making sure you are investing in a debt-free real property versus a "typical" business operation, which generally carries more financial risk. It is recommended that investors thoroughly review the offering materials before investing.
There is no such thing as a totally risk free investment. Stocks and shares and even Government Securities rise and fall in value.
When may I exit the investment?
McCormick International invests in real estate without a low percent of bank finance. It is this low percent of borrowing which lowers the risk. While property values fall as well as rise, dropping in value during recessions, history has demonstrated that values rise again and soon reach new peaks.
In order to comply with USCIS regulations, your investment must remain in place until Removal of Conditions (I-829), approximately three and a half years after investment. Recently, the USCIS has decreed that, EB-5 related investments must be held for no less than five years. Most Regional Centers lock-up your capital for five or even six years, no matter what.
What is the best way to get my funds into the US?
Importantly, McCormick International allows you to exit your investment at any time, as there is no minimum period imposed by the company. Circumstances can change unexpectedly and, if they do and you wish to cancel your immigration plans, even after a week or so, you may sell your shares.
If the first step of the visa process (I-526) has not been completed we will sell to another immigrant investor and, if it has, to a US investor.
Irrespective of charges, the exchange rate at high street banks makes them an expensive option. We recommend using a specialist foreign currency exchange company. Moneycorp, HiFX and Currencies Direct are popular choices, but there are others.
Do I have to pay property tax on this investment?
Property tax is required to be paid on any real estate in the US, but you don't have to worry about paying it, we do that for you. Our property management business handles the work each month of collecting rents, paying property taxes, utility bills, insurance, maintenance, and all the other costs associated with an apartment building. We do all the marketing and renting of all the units each month, so you do not have to do anything.
When do I get paid my normal rate of return each year?
Each year you will receive a check for your income as defined in the Private Placement Memorandum (PPM).
Do I have to pay income tax in the US for the money I earn on this investment?
Yes, you will pay US income tax on money earned each year. That rate will be based on the income amount you make on your combined US income each year.
Some investment companies accepting EB-5 investors place funds in a trust or escrow account pending Visa approval. Why doesn't McCormick International do the same?
Our primary business is real estate development. Much of our capital comes from investors who do not seek an immigration benefit. Non-EB-5 investors invest on financial considerations only, without preconditions. Therefore, our policy requires that our EB-5 investors commit their investment just as regular investors.
Do I get my investment back if I do not get my green card?
Escrow or trust agreements present immigration difficulties. Although USCIS regulations permit escrow arrangements, we find that USCIS looks more favorably on petitions based on a completed investment rather than a pending one. Finally, escrow makes it difficult to match capital availability to project requirements. Waiting for visa approval can substantially delay a project, which in turn delays job creation. Ultimately, your permanent visa approval depends on job creations. McCormick International keeps credit lines, and sufficient cash reserves to repay investors in event of visa denial.
Yes. After exhausting legal remedies, if for any reason beyond your control, you do not receive your conditional U.S. green card (I-526 approval), our contract with you requires that we refund your investment funds.
What are my financial risks?
There are specific risk factors for each limited partnership, which are included in the offering materials for the limited partnership. 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.
How does the partnership distribute income?
Each partnership distributes profits to its investors monthly. The distributions are based on the prior month's gross rental income net of expenses. Investors receive a profit and loss statement with each month's distribution.
How is the investment structured?
At the end of the year, the partnership issues a summary report along with Internal Revenue Service form K-1. Form K-1 details your yearly income and expenses. Your accountant will require form K-1 to prepare your U.S. annual tax return.
Each limited partnership owns one building. Your investment purchases an interest in the limited partnership, and you become a limited partner. Your percentage share of the limited partnership depends on the percentage your investment bares to the value of the project. The prospectus (in the offering materials) for each project describes the valuation methodology.
How is my limited partner interest protected?
The limited partnership is managed by McCormick Partners LLC the general partner of the limited partnership. The general partner develops/renovates the property, leases the property, and manages the property. The limited partners receive their share of the income from the properties as defined in the Private Placement Memorandum (PPM).
The Certificate of Limited Partnership must be recorded with the state of Washington as a public record. The certificate refers to a Schedule A of the limited partnership agreement, which lists the names and percentage interests of the limited partners. The deed, or right of ownership for the investment property, is held in the name of the limited partnership. The deed is also of public record. This means the property cannot be sold, mortgaged, or altered without complying with the terms of the limited partnership agreement.
What is the minimum investment amount?
The minimum investment amount for our real estate investment projects is $500,000, plus fees. The fee includes a $45,000 administration fee to cover agent costs and regional center costs. A separate $15,000 fee is to cover the attorney fee to process your temporary and permanent green cards through to approval. And the USCIS has application processing fees. McCormick International can provide you the exact fee schedule upon request.
Do I need to be an "accredited" investor?
The term, accredited investor is a term defined by the U.S. Securities and Exchange Commission (SEC) that describes investors permitted to invest in certain types of higher risk investments, limited partnerships, hedge funds and angel investor networks. An individual is considered to be an accredited investor if he or she has a net worth of at least 1 million U.S. dollars (excluding one's primary residence) or has made at least 200,000 U.S. dollars each year for the last two years ($300,000 with spouse if married) and has the expectation to make the same amount in the current year.
How do I invest?
You must be an accredited investor in order to review and invest in McCormick International investment offerings. The $500,000 that will be used for the investment can be counted towards the requirement of $1,000,000 in total assets.
The Limited Partnership papers will be available for our project in September 2014. As soon as investors are comfortable with this investment those papers can be signed.
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, or send us an email.
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