2021 E2 Visa Investors: Increased U.S. Real Estate Demands
FOREWORD
E2 Visa Real Estate Report 2021, pdf
Because VERDIN international clients often inquire about navigating the E2 visa process through a real estate investment model – this report is intended to provide general guidance through the E2 visa process via-a-vis a real estate related company.
We hope you find this report helpful as you consider investing in the U.S. and embark on your E2 visa journey. However, keep in mind that VERDIN is not providing individual recommendations on specific real estate investments. Investors should retain independent counsel to evaluate the merits of each real estate investment.
In preparing this report, VERDIN reflected on the collective experience of countless cases dealing with E2 visas involving real estate companies. Our team has processed E2 cases in U.S. Embassies in Europe, the Middle East, Asia, South America, North America, and Central America.
VERDIN is prepared and excited to work with foreign real estate investors seeking E2 visas.
“WE’RE SEEING INCREASED DEMAND FOR U.S. REAL ESTATE BY FOREIGN INVESTORS SEEKING E2 VISAS.” - Isaul Verdin, Esq., Founder & Managing Attorney VERDIN Law
THE MAIN OBJECTIVE
Foreign investors continue to seek opportunities in the U.S. markets. As investors develop market opportunities, many foreign investors desire to live in the U.S.
One method of achieving U.S. residency is the E2 visa.
E2 Visas are a nonimmigrant visa for foreign investors of certain treaty countries who have invested – or are actively in the process of investing – a substantial amount of capital in a bona fide enterprise in the U.S. in any industry.
One common and mature industry that attracts the attention of many foreign investors is the real estate industry. Therefore, real estate is the focus of this report.
Importantly, USCIS E2 Visa regulations require foreign investors to actively direct and develop their enterprise. As a result, a carefully structured business model showing the foreign investor as an active director and developer of the company must be developed. Foreign investors can then make a viable case for an E2 visa through a real estate company.
RELEVANT TRENDS FOR 2021
E2 Visa investors should consider the following trends given their relevance to this strategy.
Solid Economic Fundamentals
Although the COVID-19 pandemic battered the U.S. economy in 2020, one key indicator that reflects a recovery in 2021 is the decreasing unemployment rate.
According to the U.S Federal Reserve, the U.S. unemployment rate may fall to 4.5 percent or lower in 2021. In addition, leading economists forecast a positive Growth Domestic Product (GDP) rate of at least 6.5 percent.
“You’re going to see the growth rates in the middle of the year probably close to 9%. That’s how strong the reopening of the U.S. economy will be vis-a-vis the release of pent-up demand by the household sector,” said Joseph Brusuelas, chief economist at RSM.
10% GDP growth? The U.S. economy is on fire, and is about to get stoked even more
Housing Prices
The National Association of Realtors predicts that housing prices will rise by 8 percent in 2021, and 5.5 percent in 2022. See Housing Market Reaches Record-High Home Price and Gains in March 2021
U.S. Interest Rates Forecast 2021
The ability to borrow money from U.S. banks at low interest rates continues to attract real estate investors. Rates in April 2021 are hovering around 3 percent, and are expected to stay low through 2021.
Top Post-Pandemic Real Estate Markets
According to the National Association of Realtors, the top local real estate markets post pandemic are:
- Dallas – Fort Worth, TX
- Austin, TX
- Atlanta, GA
- Phoenix, AZ
- Boise, ID
- Provo, UT
- Charleston, SC
U.S. Workforce Working from Home
Given the conditions of the pandemic, many U.S. companies accommodated their employees to work remotely from home. This new reality has allowed many Americans to relocate to less expensive housing markets within the U.S.
Consequently, the U.S. has seen strong increases in demand in the Southern U.S. states where home prices are generally lower.
Although the number of employees that work from home may decrease in 2021 and 2022 because of improving public health conditions, the long-term trend will likely stay for a few years.
It is likely that internal U.S. relocations will shift to Texas and mountain states; such as Utah, Idaho, and Colorado. This trend will create opportunities for investors.
Reopening of the U.S. Economy
As U.S. consumers begin to feel more comfortable post-pandemic, there is pent up demand for domestic travel. Americans will travel domestically with more frequency and search for rental opportunities in vacation homes and condominiums.
Japan, South Korea, and Canada Lead in the Numbers.
The U.S. government starts its fiscal year in October 1 and ends the following September 30. For fiscal year 2020, Japan, Canada, and South Korea captured the most E2 visas.
However, in 2021 Japan, South Korea, and Mexico are leading with the most E2 visas.
Of key note: Japanese and South Korean businesses have learned to navigate around the H1B and L1 visas by shifting their strategies to the E2 Visa. This is because there are no cap and time filing limitations to the E2 visa. There is a reason that Japan and South Korea dominate these markets.
REAL ESTATE INVESTMENT STRATEGIES
Buy and Rent
Managing rental property as a business strategy is an active and risky endeavor. But, where there is risk, there is opportunity and a potential for favorable investment returns. Nevertheless, many foreign investors gravitate toward real estate given its relatively stable investment attributes as compared to other investment classes. Furthermore, foreign investors appreciate the simple and direct business model of buying and renting properties. In recent years, market trends have rewarded real estate investors.
Through a well-prepared presentation, the U.S. government will consider an E-2 visa packet based on a company dedicated to buying and renting properties. Before pursuing this strategy foreign investors must conduct their due diligence and compare local market trends because all real estate is local. Contact VERDIN Law for more information and assistance.
VERDIN generally advises the acquisition of two or more properties through a holding company.
If the investor plans to acquire a significant number of properties, the prudent approach is to create two companies: a holding company and a management company.
The holding company owns the properties. And the management company leases the properties to tenants. This structure should create an extra layer of liability protection for the investor.
Initially, while the investor is preparing the strategy and taking preliminary steps, he or she may travel to the U.S. on a B1/B2 visa to research the market and acquire properties.
For B1/B2 Visas: VERDIN recommends the use of a third-party property management company while the investor has a B1/B2 visa. This is needed to make certain not violate the terms of the B1/B2 visa.
Once the E2 is secured, the investor can dismiss the third-party property manager. The properties can then be managed through the E2 enterprise.
House Flipping Strategy
The term “flipping” refers to the acquisition of real estate property, adding value – and then quick sale of the property. This strategy requires timing and coordination with many independent contractors. And this strategy tends to favor experienced investors. However the U.S. government will consider an E2 visa packet based on a company dedicated to flipping properties.
Of Key Note: Independent contractors can replace the need to hire company employees. There is a strong argument that using independent contractors will stimulate the U.S. economy. This establishes that the E-2 enterprise is not marginal.
See 4 Tips to Know About E2 Visa Marginality Requirements.
Hybrid Strategy
A prudent strategy is to combine both the buy and lease strategy and flipping strategy. This dual approach will diversify the investment strategies to best exploit market conditions.
The U.S. government will consider a well-planned E2 visa packet based on a Hybrid Strategy. Contact VERDIN Law for more information and assistance.
Land Development Strategy
The foreign investor may also decide that developing land is a suitable investment strategy. This strategy requires proactive steps to demonstrate that the foreign investor has used capital to develop the land – beyond the cost to acquire the raw land.
For example, the investor may show that he or she has used funds to pay for civil engineering fees, surveys, permits, and improvement costs.
While using any of the strategies it is important to also reserve the ability to conduct consultancy services. This allows the foreign investor the ability to pivot to ancillary business services.
VERDIN is experienced in multiple E2 visa strategies involving real estate projects throughout the United States. Contact VERDIN Law for more information and assistance.
E2 VISA BENEFITS
The E2 visa has some key advantages. Foreign investors should consider some of the following benefits of the E2 visa.
E2 Visa Benefits
- Allows the investor to indefinitely renew his or her E2 visa.
- Spouses may obtain employment authorization.
- Children under 21 can also obtain E2 visa as dependents and attend public or private schools.
- Rapid processing at the US Embassies or Consulates.
- Allows access to real estate markets to actively operate and expand real estate related companies.
- Permits E2 visa investors to sponsor other foreign national executives with the same nationality as the investor owner.
- Although the E2 visa is a nonimmigrant visa – there are some pathways to residency, if carefully planned.
VERDIN Dallas Immigration Law
VERDIN is a full service immigration law firm providing comprehensive immigration solutions to international employers, investors, startups, individuals and families. Every VERDIN client receives a customized plan designed to deliver the very best results.
Isaul Verdin is a Texas Board Certified Immigration Lawyer with over 20 years experience in immigration law.
Since its inception, VERDIN has gained a reputation for prevailing in even the most complicated immigration matters. Today, VERDIN capitalizes on its experience, industry relationships, and cutting edge technology to guide clients safely and efficiently through the intricate U.S. immigration system.
VERDIN works with clients in Dallas, the U.S. and Mexico – as well as Central and South America.
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