Have you heard about the EB-5 project in the FBI office building? Is it risky?

Fbi office building, EB5 financing dream.

The owner of the office building of the US Federal Bureau of Investigation is a famous person. His name is Owen Molaschi. Who is he? Together with his business partner Moe Dalitz, he founded Paradise Development, and his business reached its peak in the era of lawless gangs in Vegas. Moe Dalitz is one of the founders of Detroit's notorious Purple Gang, which gathered a group of high school dropouts and accumulated a lot of wealth through murder, kidnapping and drug trafficking. Now, they are building an office building for the FBI. Lawyer Roy Gruttmann is an important figure in the criminal history in the memorandum of 1990. Only lucky Luciano and Bugsy Siegel can leave the same mark on the history of the underworld. In the 1940s, he even had the experience of being driven away by the Cleveland Public Security Bureau at the city government celebration.

Now, 84-year-old Molaschi has terminal bone marrow cancer and is eager to solve his own business problems. At the same time, he has to take care of his son, who owed $55 million in unsecured debt in the 2008 financial crisis and declared bankruptcy. His son-in-law pleaded guilty in a telecom fraud case on 1994. Now, his son-in-law and daughter are accused of unilateral breach of contract in the real estate project of Mission Beach apartment.

Developer Molasky doesn't even own the plot! It means that it cannot be built from bank financing. 12, 17 In February, the US Immigration Bureau explicitly stipulated that any employment created by leasing would not be regarded as a new employment opportunity created by EB5 investors. The FBI office building is forbidden. This means that if the employees of the FBI are removed and the number of construction posts is subtracted (construction posts with a construction period of less than 2 years are not considered as new posts), how many posts can the whole project have? Can it meet the needs of 800 EB5 investors? This is what any EB5 investor must make clear before investing. The project has started, so by the time EB5 funds enter the project (in the middle of next year), more than half of the project has been completed, and we will wait and see how many employment opportunities can be attributed to EB5.

Because Molaschi doesn't own the plot at present, it can't get financing from the bank. This means that private investors must rely on bridge loan and then use EB5 funds to repay the loan. The 49% equity mortgage owned by our EB5 investors actually only owns the above-ground buildings. In the United States, buildings above the ground have no valuable right to use if they are not connected with land. Then how can we cash the principal? Where does this sense of investment security come from? If the four-year rental income is not locked in the letter of intent to raise funds, then there must be at least a fixed refinancing channel, otherwise it is still a beautiful vision to return the principal in five years. If the annual rental income is less than100000, if the EB5 principal is repaid in five years, it means that the rental income for the four years after completion must be pure profit. We can estimate that, in fact, excluding maintenance and operation costs, the remaining profit after one year is probably less than 6 million. Even if the price-earnings ratio of the local real estate service industry in San Diego is 10 times, the valuation of the entire leasing business is less than 60 million. Note that because we don't own land, unfortunately, we can only regard it as a leasing business. Then, 49% of the shares are less than 30 million. How to refinance to repay the 40 million EB5 loan? Let's put our hands together and wait for the tycoon to lead EB5 investors to create another capital myth at the age of 90.

The construction cost of 1 100 million, which was hotly debated in the United States, went to China and became the publicity cost of10.50 billion. Need to know the source of funds for other projects. Because we don't own land and have no financing ability, if the funds of 60 million (1-40 million EB5) are not settled, how can we ensure that other projects can be completed on time? What should you do in China if Mr. Molaschi refuses to repay EB5' s loan and uses high-handed means to make the court decide in his favor? Are you going to invest in a real estate project without land?

Are you ready to go to the FBI building, too?