At the recent Hospitality Law Conference in Houston, immigration lawyer Sam Newbold explained why EB-5 has grown in popularity for hotel developers. EB-5 capital is "quiet money" because investors are primarily motivated by immigration benefits, the return of their principal, and low returns. The capital is quiet for about five to seven years, allowing a property time to become stable. Further, EB-5 is flexible and works with different financial frameworks. As debt, the cost of EB-5 capital ranges from 4% to 7%; as equity, the cost is around 5% to 8%. However, EB-5 capital is also "slow money," as raising capital often takes six to 18 months.
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