The combination of peak level foreclosures, planned quantitative erasing through at least 2013 and governmental policies facilitating US Visa allocations is creating a “perfect storm” for the influx of foreign capital in the flagging US Real Estate Market. As this storm builds and finds its home in local real estate offices, the industry will need to rework the way it markets to a very new set of potential clients.
“EB-5 Visas” have been around since the passage of the Immigration Act of 1990. EB-5s required the investment of at least $500,000 in specific areas where the funds either created or preserved jobs for ten Americans. Essentially, the program established “economic free fire zones” in targeted, economically depressed US locations. The program encountered early problems with complexity of application, but as changes were made over time, the interest and participation levels have risen substantially, with 3,800 applications filed by year’s end 2011.
The program is scheduled to renew in September of 2012. Legislative consideration is being given to carrying forward unused EB-5 slots into a revamped “EB-6” system that will be more streamlined and “user-friendly.”
Most exciting for the beleaguered industry is the prospect of opening the entire country to a pool of fresh and hitherto unavailable foreign capital.
Pending legislation in the US Congress contemplates extending the scope of these efforts dramatically. New proposals currently being considered would afford US Visas to ANYONE who invested $500,000 in ANY type of US property, essentially opening up the entire United States market to off-shore investors. No longer would specificity of location and application (formerly, by nature, restricted to “commercial property investment”) apply. Residential homes, vacation properties or any type of real property will now become fair game for the off-shore markets.
Realtors in the United States need to be aware of this vast new pool of capital available for their listings. Traditional real estate marketing faces a paradigm shift of major direction, as the successful agent and broker of the near future will need to be highly cognizant of methods to interface with these investors and be prepared to provide the detailed information that is needed to facilitate purchase of the US Real Estate by foreign buyers seeking immigration tickets to the United States. Primary amongst these challenges will be access to the target market, connection to legal, banking and language facilitation and ties to American companies specializing in off shore financial integration skills.
Emmerich Magazine is the flagship publication of the latest generation US Real Estate companies specializing in off shore financial integration skills