Sources of money fro EB5 investment

Certainly funds obtained from sale of property is allowed to be used for the EB5 investment as long as the investor can document the sale, that is the transfer of the deed from the investor to the new purchaser of the property, at a disclosed price at least equal to the required investment amount plus the administrative fee, if any. Moreover the investor needs to be able to prove how he/she obtained the funds to purchase the property in the first place. If the property was owned by the parents, then from proceeds of the sale an amount at least equal to fund the investment and administrative fee would need to be gifted to the investor. Moreover, all of these funds need to be grossed up to account for any taxes that might be due. If there are any taxes due from the sale, there has to be documentation that shows that those taxes are paid.
Loans are also allowed as long as the loans are collateralized and the borrower can document how he intends to pay off the interest and principal on the loan. Unsecured loans are not allowed. When borrowed funds are being used besides the fact that these borrowed funds need to collateralized, the collateral needs to be sourced as well. In other words, the investor needs to be able to show how he obtained the funds to purchase the collateral he is using to obtain the loan.The fact that the loan is obtained by parents does not eliminate the sourcing scrutiny on the collateral.
Lastly, if parents are paid back for the loan, USCIS may inquire how the funds to pay the loan were obtained.