Don,
That depends on the structure of the investment. Returns for debt offerings as compared to traditional private equity or venture capital investments are low, typically between 1-5%. Some, such as the current Reg. S Atlantic Yards debt offering that NYCRC is marketing in China, offer no return at all.
Return for foreign nationals who invest in the EB-5 immigrant investor visa are not seen as important as making sure that the investment is able to remove the conditions on the investor's green card. Making sure that the jobs are created as outlined in the I-525 application, the conditions are removed once the I-829 is filled, and the return of principal at term are considered to be much more important than return from the viewpoint of the investor.
In the Asian market, projects offering too high a return (+5%) are seen as being too risky, hence the approach of many Centers to design their offerings to a low rate of return. This also makes the capital available to the project managers and developers attractive while ensuring a large spread for the general partners.
If you invest in a project where the limited partners receive equity in exchange for their contribution, then it is not possible to estimate the eventual return until the liquidity event and the dissolution of the limited partnership. Some equity based projects have made substantial returns for their long-term investors (10%+) when you calculate both the cash flow dividends (interest paid) and the capital gain on sale or transfer of the asset.
The main question that you will need to ask before you can determine your potential return will need to be:
1. Is the offering (EB-5 investment) debt or equity?
If it is a debt offering then you will know your expected return and maturity date, as well as the interim dates and amounts that you will be paid on your principal making the ROE or ROI easy to calculate. If you invest in equity then much will depend on the cash flow the asset produces and the return after expenses, taxes and depreciation and the market value at the time the asset is sold for you to be able to determine your net return.
Many assets can produce only marginal returns during the life of the investment, while producing a substantial capital appreciation at the time of liquidation which would increase your ROI substantially. The main difference between the two investments is that in one (debt) your expected rate of return is known (assuming the debt or loan is repaid on time). With the equity based asset, it is difficult to estimate the final return on long term investments (these EB-5 offerings typically require a time horizon of 5 years or more) because of the many variables involved. Comparisons to existing similar assets should help and those can be done by professional valuation experts.
Other questions that you should consider would be:
2. the time horizon (tenor) of the investment
3. the credit quality of the project managers and entity receiving the funding
4. the asset being built or financed
5. competition from other similar assets or product classes
6. macro and micro risks (ie. how global or local recessions or expansions would affect cash flows or the ability to repay a loan through incremental tax revenues)
7. systematic & non-systematic risks (the ability for the markets to adequately value the asset)
8. time to completion (how long it will take for the asset to be commercially viable & cash producing)
9. scale (how large is the project will affect the liquidity at the time of sale)
10. capital stack (what percentage is EB-5 and what other sources of capital will be financing this asset)
11. access to capital & time line (will the promoters be able to complete the project financing on time?)
To summarize, with the debt (loan) investment your ROI will be easy to calculate and will most likely be in the 1-5% range. With an equity investment, your return will be much harder to calculate and could range from negative to higher than 5%. Good luck!