Ep.17_Manuel Ortiz on the EB-5 Program, Projections, and Project Due Diligence

During this episode Manuel Ortiz , VP of Global Business Development at FirstPathway Partners, shares his personal experience and outlook on the EB-5 program, while touching on the benefits of concurrent filing for adjustment of status pertaining to foreign national who are already in the United States on a non-resident visa. Manuel also highlights how best to conduct EB-5 project due diligence. If you would like more information or would like to speak with Manuel directly, he can be reached at [e-mail].

Episode Transcript

Unknown (00:00):
On today's episode of investing in the American Dream

(00:03):
podcast, we have featured guestManuel Ortiz joining us. Manuel
is the newly appointed VP ofGlobal Business Development at
first pathway partners, whoseexperience and understanding of
the EB five program are a greatbenefit to the growing needs of
international EB five investors.
Manuel is going to be sharinghis personal experience and
outlook on the EB five program,while also touching on the

(00:26):
benefits of concurrent filingfor Adjustment of Status
pertaining to those foreignnationals who are already in the
United States on a non residentvisa. Let's get into it.
Hi, man. Well, thank you forjoining both Peter and I today I
know you plan to share with ourlisteners, your personal

(00:47):
experience, maybe five, thechanges and outlook of the
program, and also sharing youradvice on how to determine the
success of an EB five project.
But let's start maybe with yourpersonal experience and
background. Can you maybe expandon your experience? How long
have you been in the EB fiveindustry? And what interested
you the most is there, maybe apersonal sentiment, thank you

(01:10):
very much. Just really enjoybeing here. And thank you very
much.
I guess the thing that reallyinterested me about EB five was
just a personal tie is that Ihave an immigrant story as well,
I am. I am an immigrant I movedto the US back in 1981, I was

(01:33):
three years old. And on my dad'sside of the family, my
grandfather and his brotherowned a candle making business
in Spain, it was one of thelargest candle making companies
there. And they both wanted tocome to the US and they couldn't
decide who was going to come.
And back in the old days, theonly way that you could solve

(01:53):
those things was two ways,fighting it out or flipping a
coin.
Coin. Exactly. Unfortunately, Icame from a very loving family
and they flipped a coin. And mygrandfather won. And when I
think back at that story all thetime, I just think, wow, he had

(02:15):
a 50% chance of making it here.
And throughout time you justkind of see the jobs that they
created. They went from New Yorkand through Ellis Island went to
Philadelphia, in California, andyou just think, wow, if you
would never have won that flipof the coin, I might not even be
here myself. And sowhat I really like about EB five

(02:37):
is that you have more than justa 50% chance of coming here.
Right? You have yet the abilityto be able to pick an
experience, EB five firm thathas a great track record, like
first pathway partners that has100% success rate and securing
permanent green cards. Thosethings are important. And so

(02:59):
that option wasn't there backthen. It's here now and I guess
that's you know, the EB fivestory is marrying an investment,
and then also the immigrationpart of it. And that's true and
dear to my heart, especiallywith the way that my career
spanned in finance over the last20 years. Manuel, how has your
experience in Eb five changedfrom the past to your present

(03:23):
role? Yes, a really goodquestion. I think when I look
back at the EB fivespace, and really where my
career started, you know, 10years ago, it was very different
that EB five industry was not asglobal as it is. Now I started
off at the associate level, alot of my duties initially, were

(03:46):
just verifying questionnaires,checking for the accuracy of the
documents. But as I began togrow in my career, I began to
develop relationships all overthe world through Latin America,
Africa, India, and Vietnam. AndI began to grow and I took over

(04:06):
our EB five team. And as thatstarted happening, the EB five
industry started turning alittle bit more global. And a
lot of the efforts that Istarted, led our team to win a
national award for businessdevelopment. And I think that my
understanding of theadministrative part of things,

(04:28):
working with our complianceteam, being on the ground floor,
and developing businessstrategies is an experience that
that not everybody has.
Sowith that in mind, what are some
of your initial thoughts on howFPP operates within the EB five
industry? Well, Peter, you know,one of the things that I really

(04:50):
enjoyed is that we're laserfocused on EB five. If you look
at our history, we were the 21stregional set
During the country, we have anoutstanding track record. We've
been leaders in the industry anddon't get distracted by doing a
bunch of different things. Ilearned from my years in private

(05:12):
equity that sometimes when youtry to be too creative things
can backfire. And, you know,business is hard enough as it is
on one thing. Now, if you'retrying to hit on 15 different
strategies, now your executionrisk begins to go up. Right. And
so we like to be conservative.
And I like that. And quitefrankly, our investors like

(05:33):
that, too.
You know, and since you are moreinvolved now with developing
strategy, what are some of thegoals you're hoping to achieve?
In your new role? Well, one ofthe lessons that I learned early
on in my career is learning theimportance that strong

(05:53):
leadership really comes from theteam, being able to put people
in positions to succeed, andprovide them with the resources
necessary to achieve theirgoals. You know, the other thing
that's really important is justassessing what market demand is,
it really sounds cliche, but theteam's main goal is to help
investors achieve the Americandream. Without that none of us

(06:16):
are here. Yeah, and EB five ismuch more than just an
investment. It's a true familydecision. Yeah, it's a very
intimate, it's very special. Oneof the things that I've always
been big on is knowing that EBfive is more than just an
investment. Right? It's justsuch an intimate topic that, you
know, families save their moneythroughout the year, sometimes

(06:39):
through generations. And not tomention just leaving the your
country of origin just coming toa brand new place with just a
different way of doing business,different way of going to
school. And one of the thingsthat really sets our team apart
are just our culturalcompetencies. Some of our team
members are EB five investorsthemselves, some of us are

(07:00):
immigrants. And all of that tiesinto helping investors achieve
the American dream. And, youknow, for our goals, we have
lofty goals this year. But Istrongly believe that they're
attainable. And the main thingis just ensuring that investors
achieve the American dream. AndI think that by having everybody
rowing in the same direction,we're going to be able to ensure

(07:23):
that we attain our goals, whichis a testament to our track
record. Exactly. So with brieflytouching on some of those
changes through EB five history.
What are your thoughts on themost recent changes to the
program, specifically, throughRia, the reform Integrity Act?

(07:44):
Well, the first thing is thatchange was needed in our
industry. It's a program that'sbeen around since the 1990s. And
it hadn't really evolved. And sochange was something that was
very needed, and I USA was atthe forefront of the recent
changes. For our listeners whoaren't aware. USAA is the
National Trade Organization forEB five. And its members include

(08:07):
95% of the regional centers inthe country. So almost
everybody. And the mandate forAI USA, is that the industry has
heard in one voice. And this wascritically important as these
discussions were happeningbecause there was a period in
time where we didn't knowwhether there was going to be an

(08:27):
EB five program. And it wasreally important for the
industry to come together. Andreally under the leadership of
our chairman and founder BobKraft, who is the president of
USA and is now serving his sixthconsecutive term. I strongly
believe that the industry ispleased where we are in the
program now. But there's still alot of work to be done. Yes,

(08:50):
you're so right. Bob has astruly, truly been an assets that
EB five industry and has evenbeen instrumental to the long
term reauthorization, which isjust one of the positive changes
of EB five. Yes, I mean, thinkof some of the cool things that
have happened. Right back sincethe 1990s. It had always been

(09:12):
the case that EB five had to bereauthorized every two years.
Well, now with these changes,it's every five years. If you
take a look at how long aproject takes, is usually five
to seven years. That means thatin the middle of almost every
project, within two years, EBfive had to be reauthorized. So

(09:33):
that created so much anxiety andso much uncertainty for not to
mention just the EB five capitalfirms like us, but just for
investors, the level of anxietyuncertainty was something that
we don't have anymore. I thinkthat's a really good thing. You
also have set asides. You alsohave concurrent filing. And so
those things are reallyimportant and really good for

(09:56):
the program. And you know what Icall now EB five 2.0
You know, you just mentionedconcurrent filing. And I know
that's become such a populartopic right now. But can you
explain what is concurrentfiling? What are the benefits?
Why is it significant forinvestors. So now what you're
able to do is have an adjustmentof status that previously was

(10:18):
not allowed. So you're able todo an adjustment of status now.
And basically just that meansthat foreign nationals who are
in the US on non resident visas,and whose priority date is
current, that they're eligibleto file the Form I 526, and
concurrently apply forAdjustment of Status. And so
basically, what that means isthat it takes away the

(10:41):
restrictions that come with anh1 b, e to f1 visas, which
allows foreign nationals tofreely live work and study in
the US.
So just to step back for a sec,you also just mentioned rural
and TA projects in regard to setaside visas. What does this

(11:03):
mean, and what are some of theadvantages to rural NTA
projects? Well, I think it'simportant to have some
historical context here. Andpreviously, the government would
set aside a minimum of 3000, EBfive visas for investors in TAs
that included both rural andareas of high unemployment.

(11:24):
That's the way it was set uppreviously, the power of RIA is
that it allows for the USgovernment to set aside 20% of
the total number of availablevisas for qualified immigrants
who invest in rural areas, andanother 10%, for investors that
invest in high unemploymentareas. And there's also a 2% set

(11:44):
aside for infrastructure. Soreally, what the 20% set aside
is, it helps address some of thevisa capacity issues, which is a
really good thing for theindustry. So what you're saying
is that roughly over 30% of allEB five visas are issued by the
US government for ruralprojects, high unemployment area

(12:06):
projects and infrastructureprojects. That's exactly right.
And another thing that'sinteresting is that whatever
visas are not using the currentyear, carry over to the
following year. Now, that'sreally exciting. And it's great.
But I feel like these visas aregoing to go very quickly, for
the simple fact that people willwant to get in as quickly as

(12:28):
possible, because there's asense that they are going to go
really quickly. Remember, thereare two things to keep in mind
here. What is visa availability,and two is visa processing. And
so the set asides are designedto help address the visa
availability. So we've got thatcovered. But and so that's why

(12:51):
it's really important forinvestors to jump in now as
quickly as possible. But theother part of this process is
that we still have a little bitof a processing issue. And so if
you go to the USCIS website,you'll see a rather lengthy
processing time for i 526 isit's something like 58 and a
half months, but the silverlining again, where the industry

(13:13):
coming together in one voice andthen having RIA now, the silver
lining here is that USCIS hasindicated that they're striving
to process i 526, is within asix month period. And I think
really for us, our our source oftruth and FTP, whenever we talk
to investors is always referredto the USCIS website, I think

(13:33):
it's really important because inEb five, you just have a lot of
misinformation that's out there.
But it's always important justto point back to the facts.
Yeah, exactly. It's the bestresource for them.
You know, kind of looking aheadand moving ahead. When we talk
about the future of the EB fiveprogram. What do you attribute

(13:55):
the current rise in popularityand demand of the EB five
program to? Well, we wererecently in a conference over in
Miami, and it was really greatto see the momentum that EB five
is having here at the beginningof the year. Yeah, I think you
know, historically, and you'veseen this yourself, as well as

(14:16):
that the beginning of the year,starts off a little slowly.
People are coming out of theholidays, you have Lunar New
Year, and it just takes a littlebit of time to get going. But
the interesting thing is thatthis year, has started to move a
little bit quicker. The momentumhas started earlier, and you're
starting to see interest fromsome familiar faces, attorneys

(14:37):
that we've worked with before,but also new attorneys that have
clients that are coming to themasking about EB five where they
said, You know, I've neverworked in 85. I've been in
business for 10 or 15 years. Andthis is the first time that this
is coming up. And then nowyou're also starting to see
broker dealers thattraditionally have not been

(14:57):
involved in Eb five starting tojump
bit as well. And, you know, Ithink part of the reason that
you're seeing that is that, youknow, during the pandemic was
starting, you start to hear thisterm about pent up demand and
pent up demand. And I thinkthat's true for EB five also.
Yeah, I agree, there wasdefinitely a lot of pent up

(15:17):
demand because of that. And, youknow, there's also, there was so
much uncertainty for the programfor the last couple of years.
And with Ria, you know, theenvironment provided a lot more
clarity and stability andstructure and structure and
certainty, certainly more thananything that we have seen in
the past. Yeah. And obviously,you know, there's a really good

(15:40):
book that that I love that'scalled Who Moved My Cheese that
deals with change. And it's,it's an old book, that writing
thatthey have you read that whenever
you're kind of going throughsome form of change. And I think
the EB five industry is goingthrough some change right now.
But the industry will learnquick, and EB five will be
better for it. And also, thereare so many other great things.

(16:01):
We talked about concurrentfiling, and that's really good.
But I think just as good orbetter are some of the
compliance things and integritythings that are going into place
as well, where, you know, we'rebasically just providing
safeguards for investors to makesure that EB five funds are used
for their intended purpose. Andthat's a good thing. And it's

(16:21):
just making the program moreattractive globally. Exactly.
Yeah. So going off of that. Youmentioned previously a
conference in Miami, and withyour extensive experience in the
EB five industry, do youanticipate EB five becoming more
popular with investorsspecifically in Latin America?
Yeah, I mean, I think EB five,now, it is certainly a global

(16:43):
industry, we're in the servicebusiness, we serve as our
investors. And I truly believethat EB five is here to stay and
to grow. And with that beingsaid, I think that most will say
that even with the great thingsthat have happened in a post
rate environment, we still haveroom to improve. And there are a

(17:03):
lot of things have been put inplace to protect investors. And
I think that's a great thing.
However, it usually takes alittle bit of time to feel the
whole effect of the most recentchanges. And the reason that I
was just focusing on complianceand integrity measures, is that
those are things that buildinvestor confidence. And I think

(17:26):
as investor confidence grows,and processing times get better,
demand will continue toincrease. So with that being
said, How are you seeing thesemacro economic landscape shifts
in how does that shift effect?
EB five projects? I think, youknow, that's a great question.

(17:47):
It's a very general question,and really depends on on who you
talk to you. My personalopinion, though, is that you're
gonna start to see more ruralprojects than you have in the
past. And obviously, like Isaid, you start hearing TDA, you
start hearing rural, I thinkit's important for investors to
conduct their due diligence, tosee what that really means. But

(18:07):
it's also really important toknow that, while it's great to
have a rural project, it's alsovery important to understand the
fundamentals of the project isis there a really strong exit
strategy? Right, because it'sone thing to have a investment
that is very sound on theintegration side, but it's not,

(18:27):
it might not be a goodinvestment idea. So I think from
a macroeconomic landscape, Ithink the project landscape is
going to change slightly. But Ithink that the fundamentals of
job creation and soundinvestment are still going to be
there. And that's why duediligence is so important, you
know, and kind of in alignmentwith that, and you know, EB five

(18:47):
and the growing demand, what aresome of the best ways, and then
how can we continue to educateinvestors about the program? I
think when we talk about, wehave to talk about the EB five
industry in general. And, youknow, all of us have our part to
be champions of truth, championsof accurate information. And I

(19:08):
think a really good example ofthat, you know, going back to
Iowa, USA, where the industryjust comes together in one
voice, I think the educationalmaterial that comes out of
there, the USCIS website, and weas EB five capital firms
involved in this business, alsobeing involved in just
distributing just accurateinformation. And the right

(19:30):
information together as onevoice as well, is really
important. I think that's,that's where we can really make
the difference. Yep. I agree.
You know, utilizing all theplatforms and resources to you
use that to put the accurateinformation out there, you know,
yeah. And you're able to see howpowerful that can be. When we

(19:50):
look at what happened with Ria,we got authorization for five
years, which is a big win for usall. And if you look at prior to
that, to the early days ofdbx five, back in 2008 2009,
demand was really high, butbecause there was so much
growth, and things were movingalong so quickly, you had a lot
of people think, hey, I can getinto this EB five business, I

(20:13):
can do EB five, right? Yeah, alot of experts, experts that
wants to come in. But you startto think that back then there
were also very low barriers toentry. And as a result, some
very unfortunate thingshappened. There was a lot of
myths and misinformation. And Ithink, right now is the perfect
time and EB five, two point O,post Ria, environment, whatever

(20:36):
you want to call it, where theindustry can come together as
one to protect the EB fiveindustry, but also ensure that
investors are protected. And Ireally happy to see that just in
this short period of time,you're starting to see the
industry work together and cometogether to protect EB five,
which in turn protects ourinvestors. And I think that's

(20:59):
something that Bob always speakson is the integrity of the
program. That's right. So man,well, with your experience in Eb
five and subsequent EB fiveprojects. What are your thoughts
on tallis and for those of youwho are unfamiliar with Tallis
is our new ultra luxury, EB fiveinvestment opportunity located

(21:22):
in the Coachella Valley oflooking into California, I
really liked the project.
There's just so much historybetween the Coachella Valley and
its connection to SouthernCalifornia. A lot of people
don't know this, but it's a twohour drive from 26 million
people, if you take into accountthe people that live in Los

(21:44):
Angeles County, Orange County,and sun and San Diego County.
And if you look at historically,I mean, that's that's a lot of
people. And if you think of thedynamics of just what the
Coachella Valley historicallyhas been, you know, it's been
known for the place where peoplejust kind of want to get away,

(22:04):
but mostly just for golf,there's 140 golf courses in the
area. But I do think thatthere's a lot of context that
needs to be put into action hereand thinking about with what's
happened in the last threeyears, the pandemic and just has
put a higher level ofconsciousness and people for

(22:24):
wellness and health, and theCoachella Valley is renowned for
its wellness, they have a lot ofspas, there's agriculture, when
you go to restaurants, there's alot of farm to table. And that
all of that just comes togetherwith with the vibe that you have
in this area and where thisproject is actually located.
People are super active there.
They like to hike, they like tobe outdoors. And they like to

(22:48):
play golf. Obviously, there's alot of golf courses there. But
there is just a really just adifferent level of people just
wanting to connect with naturenow. And so I feel that there's
just a very different there's ashifting paradigm here. And this
project is going to be very goodfor the area. Yeah. And going

(23:09):
off of that. I think that one ofthe really cool things that you
see in this area is that you younow have different generations
of families that have made homeshere. And you're also starting
to see the numbers of permanentresidence increases. Well.

(23:30):
Yeah, and I think too, with alot that's going on in the
Coachella Valley, these aredefinitely things that draw
people out to the area now,instead of it just being about
golf courses, you know, there'speople are seeking new
experiences, they're travelingmore again, there's other
attractions, this area'sbooming, even amongst
celebrities, there's just a lotof gravitation to the Coachella

(23:51):
Valley, whether it's for themusic or art festivals. So I
just think that this is a muchneeded amenity for that area.
And the stats back that up to Imean, I think that if you look
at, you know what happened in2022, if they basically
shattered the records fortourism in the Coachella Valley,
which is really exciting. Peopleare traveling in large numbers.

(24:15):
But you know, one of the thingsto keep in mind and talking
about stats and facts andfigures is also that, you know,
if you look at the area back in2003, there were 14,000 hotel
rooms in the Coachella Valley.
Okay. And if you look at recentnumbers, there were still only
14,000 hotel rooms in theCoachella Valley. And so that

(24:36):
number hasn't really changedmuch. But the people that are
visiting is changing and that'sincreasing. So there is demand
for this type of this this typeof product there. And, you know,
I think also if you just takeinto account where people are
actually staying now, they'rerenting houses they're staying

(24:58):
at had Airbnb s or staying inhotels that were built in 2003
or even before that. And so Ithink that this project really
lends itself to providing anavenue for somebody to have a
ultra luxury experience. Not tomention, not to mention that

(25:19):
it's the montage in the countryand the Pendry hotels are very
highly regarded. They're verynice. And it's the first time
that you have a resort wherethey're both going to be on this
project.
Ya know, you make you make agreat point. I mean,
historically, Pendry montage hadnever existed in the same

(25:42):
location. And Tallis is thefirst project where they will be
together. Exactly. And I thinkgoing back to your earlier
point, Peter, as well of having,you know, different generations
of families traveling together,and those things, you know, they
get to enjoy these two differenthotels, having two different
experiences, but mostimportantly, being together. And

(26:06):
I think, you know, when you lookat the differences between the
hotels, you know, the pantry isslightly a bit more modern. They
have pickleball courts, tenniscourts,
the Montage has your luxury spa,multiple outdoor pools in the
golf experience, but again,different generations of
families traveling together, andhaving different experiences
exactly. I know, we talked a lotabout tallis and you know, the

(26:29):
location, a lot of the greenamenities. But in terms of an EB
five investment, what reallymakes Tallis stand out? What are
some of the highlights thatreally hit the nail on the head,
in terms of an investmentproject for EB five investors?
Well, I think it's kind of goingback to what I had mentioned
before is that we're laserfocused on EB five. And so

(26:51):
because of that, we were able toget a jump on this project,
right when the program opened upagain. And so this project is
moving. It's under construction.
And most of the jobs havealready been created. And we
expect all jobs to be createdhere in the near future. And
you'll The other thing is, youknow, I mentioned it's important
to partner with people with veryimportant track records. Well

(27:14):
are the developer here is theRobert Greene company, which has
been involved in successfulprojects like the four seasons,
montage, Pendry, among others,and I want to highlight success,
successful part of that, becauseagain, going back to track
record, that's really important.

(27:34):
And with our track record, andbringing in our EB five
expertise, I feel that investorsare in a very, very sound,
conservative position, and thefact that it sits in a single
census tract, T EA that is alsoeligible for high unemployment
set aside thesis Exactly. Beforewe wrap up today's episode, I

(27:55):
would like to ask, what advicedo you have for any potential
investors out there thinkingabout investing in the EB five
program, or investing in our newultra luxury, EB five investment
opportunity, Tallis? Well, thefirst thing that I like to say
is that we'd obviously love tohave you invest with us. But

(28:15):
what I would say is thatwhatever you do, make sure to
conduct a very thorough duediligence and just look at track
records. Also that as a validproject support to study and
understand the fundamentals.
Oftentimes we hear catchphrases,like rural TA, but But what is
all that stuff actually mean?

(28:36):
You know, is it possible to havea project that's fundamentally
sound on the immigration side,but not a fundamental
investment? thesis? And theanswer is, yes, you can have
something that's great on theimmigration side, but just not a
good investment. And so thosesorts of things are important.
And as I've talked to investorsbefore, you know, sometimes

(28:57):
they've come to the US, theystudied here, and they want to
invest in a project because ofits specific location, because
that's where they study. Butthat doesn't mean that it's
fundamentally sound on theimmigration side, or the
investment side, it really hasto be fundamentally sound on
both. Yep, I agree. And I knowthat we've had, you know, others
kind of speak on that and doingthe due diligence and

(29:19):
researching, you know, theregional center, researching the
project, making sure that theirjourney is going to be
successful, you know, from aninvestment standpoint, and an
immigration standpoint as well.
So I know we're wrapping it up.
And you know, I just want to saythank you again for sharing your
insight and expertise with us.
And if any of our listeners havequestions and want to contact

(29:40):
you directly, we will be sure toinclude your contact information
in the episode description. Sothen well, and Peter, thank you
both for joining us. I do sothank you, everybody. Thank you
for listening. If you would liketo know more about first pathway
partners, please contactthem directly online at www dot
first pathway.com