In most countries, real estate is perceived as a solid investment vehicle and uninformed E-2 Visa prospective investors believe that investing in real estate in the USA would qualify them for the E-2 Visa: It will not!
Many real estate business models fail to demonstrate that the company is a real, operating business and not just a passive investment.
This article will not only explain the reasons why diverse types of real estate investment will not qualify you for the E-2 Visa, but will also present you some E-2 Visa compliant franchise business opportunities that can put you in the real estate industry segment.
Buy & Hold
In this form of real estate investment, the investor acquires a property (or gain control over a real estate property) that will later be rented to a tenant. The whole idea is that the monthly installments paid by the tenant will exceed the operating expenses of holding that property, resulting in positive cashflow while investor builds equity on the property over time (in case of financed purchase).
The passive nature of this type of investment is detrimental to your E-2 Visa application. Not a real, operating business. No employment generation.
Buying properties under market value, remodeling it and reselling for top-market value while holding it for the least amount of time possible is a type of real estate investment commonly known as “house-flipping”.
This form of real estate investment has become very popular due to TV shows, notably the ones on the HGTV channel.
This type of business only makes sense if the property is acquired at significant discount. This is not the typical real estate transaction. The “supply” side of your business is scarce and uncertain, which makes this type of business extremely speculative, which is detrimental to your E-2 Visa case and your business will not be interpreted as a real operation by the immigration.
The speculative nature of these transactions, by the way, is the same reason why stock market investment will not qualify you for the E-2 Visa.
In real estate, whenever someone finances the acquisition of the property, the borrower typically signs a “promissory note” that documents the intent to repay the lender. In real estate, it is very common for those notes to have the real estate property itself as the collateral, so if the borrower defaults the repayment, whoever holds the note (a bank or an investor) can foreclose the property and take it back as guarantee.
Again, very speculative nature, passive investment and no employment generation. It will not serve as an investment vehicle for your E-2 Visa.
Alternative Businesses in the Real Estate Industry
If you are passionate about real estate and wants to be in this industry, here are some business categories that present E-2 Visa compliant franchise models and E-2 Visa friendly franchisors.
Property Management Franchises
Property Management is a real business. The property manager acts on behalf of the property owner and manages the relationship with the tenants while preserving the value of the properties.
There are diverse classes of assets that can be managed by a property management company: residential short-term rentals, residential long-term rentals, associations management and commercial properties.
This line of business present multiple streams of income, including transactional and recurring revenues. The business can be grown organically or by acquisition of property management contracts. Some franchisors assist franchisees in identifying and negotiating those contracts when they become available in the market.
Initial investment typically falls between $70,000 and $115,000, not including acquisition of property management contracts.
There are several property management franchises in the USA but only a few are E-2 Visa friendly.
If you are interested in this segment, we can definitively connect you with the franchisors who are E-2 Visa friendly and have extensive track record of E-2 Visa approvals.
Property Inspection Franchises
According to the American Society of Home Inspectors (ASHI), more than 90 percent of home sales involve a house inspection. These inspections are typically conducted after the purchase offer has been accepted and before the deal is considered closed. This timeframe is known as contingency period and depending on the findings, buyer may back out of the deal or renegotiate the deal if something major comes up.
Generally, a home inspection will report on the condition of roof, installations, HVAC, finishing (floors, walls and ceilings), structure, foundations, basements and may include other specialty inspections such as termites, asbestos, radon and lead, to name a few.
Initial investment typically falls between $70,000 and $100,000 and, even though there are several franchises in this segment operating in the USA, most are either not E-2 Visa friendly or they offer an “owner-operated” business model, which is not ideal for the E-2 Visa.
If you are interested in this segment, we can definitively connect you with the franchisors who are E-2 Visa friendly and offer an Executive business model, allowing the franchisee to hire the property inspectors instead of being the only inspector. Remember: any business that looks like self-employment will likely not qualify you for the E-2 Visa.
Property Management and Property Inspection franchises present E-2 Visa complaint business opportunities that can get you inside the real estate industry. Being an insider in the real estate industry creates the perfect condition to have a side-business in real estate investment, if this is your end goal.
Make sure to consult a competent immigration attorney on how to setup the legal entities in such way to allow you to stack up diverse business opportunities without jeopardizing your E-2 Visa.
If you are seriously considering investing in a business or gain knowledge about franchising so you can later decide if this is the right type of investment for you, we can definitively help you. Prospective E-2 Visa investors are welcome, and we have a lot of experience with investment visas.
Who We Are
Franchise Wizards is a franchise consulting business located in Carlsbad, CA and we work with 530+ franchisors in multiple industry categories with various investment levels. The location where the desired business is to be operated can be anywhere in the USA or Canada.
By understanding your objectives and your business preferences, we can present to you a tailored selection of franchises that meet your requirements and present the qualities you are looking for in the ideal business opportunity.
We can also educate you on how to make the most out of the discovery process offered by the franchisors and the best practices to evaluate and compare franchise opportunities.
Click below to schedule a free consultation. There is absolutely no obligation to invest in any of the franchises we suggest for your consideration.