• Safer Job Creation
The diversified Fund of quality public charter schools provides that the excess jobs created from all the schools can be used by any of the investors. As a result, if any one of the schools does not achieve its job creation requirement on time, excess jobs from all the other schools can be used by the investors to make up the difference.
Almost every financial advisor will counsel investors to never put all their money into one investment. In other words, “don’t put all your eggs into one basket”. This is very important advice with EB-5 because the failure of a single EB-5 project to create the needed jobs can have very dire ramifications on the entire family. As a result, we created a fund with more than one charter school in each fund.
• More Predictable Loan Repayment
Charter schools are approved and licensed by the government and also funded by the government. Charter schools qualify for government authorized tax exempt bonds after two to three years of operations.
The Kauffman Foundation study, Debunking the Real Estate Risk of Charter Schools stated:
“Kauffman finds that of all charter schools that have ever opened in this country, 5.95 percent have closed in a way that impacted their landlords or real estate financers.”
Further: “Even when charter schools actually fail, the re-use rate of facilities is very high. 95.8 percent—were in use by new occupants. State education officials reported that landlords faced no loss in nearly all of these cases and were able to re-lease the facilities at equal or higher rates to the new tenants.”
A. 5.95% of schools closed.
B. 95.8% of those closed school facilities were able to release the facility – with no loss of revenue.
C. Therefore, 4.2% of the schools that closed (100% – 95.8%) financially impacted the landlord negatively.
D. The actual failure rate for the school facility owners was .25% or ¼ %.
This ¼ % failure rate is determined by multiplying the school closing rate of 5.95% by the 4.2% real estate failure rate. (5.95% x 4.2% = .25%)
The study shows that the SUCCESS rate of charter schools – (repaying the owner of the school real estate facility) – is 99.75%.
Also, Education is one of the industries where job creation has not been negatively impacted by recessions. See below graph
• Experienced finance company and developer
As we already mentioned, Education Fund of America is led by a team of investment experts that have over the last 25 years provided over $5.5 billion in loans to real estate based businesses located throughout all 50 states in the United States. Our EFA team has been helping charter schools for more than five years. We have funded dozens of schools with EB-5 capital, which has helped many thousands of students.
Our development partner, American Charter Development (“ACD”) has been developing state government funded public charter schools since 2003 and has successfully completed more than 50 charter schools ranging from $3 million to $20 million in cost. Its track record includes one of the largest charter schools to open in the United States, American Leadership Academy – Spanish Fork, Utah.