Investors need a way to compare projects that does not rely on the smoothest pitch.
Most investors do not choose between a good project and an obvious fraud. They choose between two or three projects that all look reasonable, marketed by people who are all persuasive. A scorecard helps because it forces the same questions onto every option, so the decision rests on the merits of each project rather than how well it was pitched.
We present a straightforward project scorecard based on time-tested due diligence and underwriting principles. This scorecard is not intended to replace a complete and thorough due diligence process. Every project requires close examination and scrutiny with the help of multiple professionals. Instead, view it as a reliable starting point when evaluating the vast array of EB-5 investments offered in the marketplace.
Seven things to score, project-by-project
Every reputable EB-5 project pursues two goals on behalf of its investors: protecting investor capital and producing qualified jobs investors can rely upon for green card processing. These two objectives are simple in theory but can be challenging to achieve, especially when uncertainty and risk are involved. While not all risk is controllable, investors can take proactive steps to uncover potential pitfalls or conflicts of interest before they invest.
That’s where the scorecard comes into play. The tool identifies seven different dimensions of project strength that repeat themselves time and time again across market cycles, investment trends and asset classes. Let’s take a closer look at the scorecard:
| Dimension | What a strong project shows |
| Location and TEA | Rural or high-unemployment area with a verified designation by an EB-5 economist |
| Industry | Durable, “all-weather” demand, rather than demand that is cyclical or hyper-local |
| Developer (JCE) | A track record building similar projects, with references that check out |
| Immigration risk | Quantified job counts well above the minimum, modeled to USCIS methodology |
| Financial risk | Real collateral, a believable proforma, and multiple credible exit options |
| Capital stack | Meaningful developer equity ahead of EB-5, where EB-5 is not the only “money in” |
| Independence | A regional center with a solid track record, no JCE affiliation, with all fees fully disclosed |
How to use it
Score each project on the seven dimensions using a scale from 1 to 10. The more points, the better. The key is to judge each project objectively by honestly and thoughtfully scoring each dimension as accurately as possible.
Make the developer’s own documents supply the answers; do not come up with answers of your own! Where a box stays empty because the information was not offered, treat the gap as a finding rather than a footnote. Go back to the sponsoring regional center or developer to try and fill in the gaps. If the developer is unable to provide satisfactory commentary on one or more dimensions, that is a clear signal to move on. A project that scores well on six dimensions and goes quiet on the seventh has spoken for itself.
Remember, the Reform and Integrity Act of 2022 require regional centers to undergo background checks, utilize third-party fund administration or financial audits and operate with integrity. Otherwise, they face the threat of termination. These higher standards of conduct should encourage regional center sponsors to only work with reputable developers on sound projects. A good sponsor should be able to discuss all the scorecard’s dimensions openly.
If two projects are close to each other or tie, ask a trusted advisor or an experienced investor that to score each project as well. Diversity of opinion is a true ally, especially when projects are complex or involve unfamiliar businesses.
The scorecard alone cannot not pick the project. But it can help identify the most important aspects and dimensions that determine outcomes instead of things that make for attractive brochures.
This article is provided for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security. All EB-5 investments must be at risk and may result in the loss of capital. Investors should consult their own legal, immigration, and financial advisors.