Discussion / Answer 2 questions and comment on 2 students / 200~300 words for answers / need in 20 hours

Question 1: What are the primary benefits from investing in income property? Please elaborate by expressing your thoughts about your findings in at least 3 – 4 sentences.

Student 1:

What are the primary benefits from investing in income property?

The term income property refers to a property that is purchased or developed to earn income by renting or leasing it out to others or through price appreciation. The primary benefits motivate investors to make equity investments in income are Rate of return, Price appreciation, Diversification, and Tax benefits.

Rate of return –investors anticipate that market demand for space in the property will be sufficient to produce net income after collecting rents and paying operating expenses.

Price appreciation –Any price increase would contribute to an investor’s return. Investors often expect prices to rise over the holding period, particularly in an inflationary environment. For example, purchasing a home could bring profits since its price would certainly increase in the future, even in the inflation time, the price of a home rise up as well.

Diversification–Most investors want to hold a variety of different types of investments such as stocks, bonds, money market funds, and real estate while investing in real estate is able to achieve diversification.

Tax benefits - Investing in real estate, there are favorable tax treatment. investors have paid little or no taxes on returns from real estate investments for many years.

Reference:

Brueggeman, W., & Fisher, J. (2019). Real Estate Finance and Investments, 16th ed., Hill Education

Question 2: Investors and Developers Utilizing EB-5 Visa for Real Estate Transactions

Please visit  http://www.crowdfundinsider.com/2015/01/60566-crowdfunding-eb-5-foreign-investors-a-path-to-us-citizenship/ (Links to an external site.)and read “Crowdfunding EB-5 Foreign Investors: A Path to US Citizenship.” In at least 2 – 3 sentences bring back something that you learned and share it with the class. 

Student 2:

EB-5 visa is called by some as the rich person’s visa. It is a kind of immigration visa to the United Stated. The applicant should invest 500,000 to a million dollars on a project in real estate, manufacturing and other similar industries. And the project must create at least 10 full time job opportunities to the local community. The job opportunities can be direct or indirect opportunities. The applicant must show proof of the employment of the 10 positions. The EB-5 visa is a complex one and the applicant needs to have a team of people to help him, such as an immigration attorney, business plan writer, corporate attorney and even an economist. The applicant also needs to have professional help in finding the opportunities of investment.

In practice, the majority of the applicants for the EB-5 visa are from China and there are a lot of problems with the visa. The investment is there, but the job creating purpose is normally not achieved.  

References:

Crowdfunding EB-5 Foreign Investors: A Path to US Citizenship. Retrieved from https://www.crowdfundinsider.com/2015/01/60566-crowdfunding-eb-5-foreign-investors-a-path-to-us-citizenship/