INVESTMENT PHILOSOPHY

     One usually wins the game by hitting lots of singles and doubles versus swinging for home runs. We strive to hit singles and doubles.

Great investing is being able to see the light at the end of the tunnel before proceeding down the path. Our process for investing is straightforward and begins with selecting the right opportunities and ends with meeting the goals and objectives of our partners and investors. Our typical investor has an interest in alternatives to the stock market such as Real Estate or other Private Equity, however, all investors have a need for maintaining the right balance between liquid and non-liquid assets in their portfolio. With our Investment Advisory Services, we help investors find low-cost and efficient market investment strategies.

 

OurProcess1

.

Frequently Asked Questions

What is Ernst Capital Securities?

Ernst Capital Securities, LLC is a licensed securities broker-dealer devoted solely to offering Real Estate, Direct Participation Programs (DPPs) through Private Placements. We are registered with the Securities and Exchange Commission (SEC) and regulated by the Financial Industry Regulatory Authority (FINRA). We offer investments to accredited individuals, companies and trusts who seek the return potential and tax benefits of direct participation in real estate development efforts or existing properties.

What are Direct Participation Programs (DPPs)?

A Direct Participation Program (DPP) is a type of investment program that allows for flow-through treatment of the results of a business operation to the investor. You are able to enjoy the benefits of a direct investment in tangible assets without many of the complications and risks that normally accompany such investments. As an investor, you own a fraction of a company that is organized for the purpose of developing and/or owning real estate.

Real estate ventures are generally formed as Limited Liability Companies (LLCs) or Limited Partnerships (LPs). The partnership’s sponsors pool investors’ funds to make investments in real estate development projects or existing properties.

The managing member or managing general partner is known as a sponsor and is responsible for managing the business’ assets and running its operations. Depending on the specific offering, certain owner share classes may not be liable for losses beyond their own investment and do not participate in the partnership’s management.

What is a Private Placement?

A Private Placement is a type of investment offering that is exempt from registration with the Securities and Exchange Commission (SEC). Public and large private companies must register with the SEC, which can be very expensive and time consuming.

Typically, real estate projects are structured as LLCs or LPs and capitalized through a Private Placement offering allowing those efforts to save time and money. These offerings still go through a due diligence process, but many of the administrative costs related to SEC registration can be avoided. This is necessary for small investment programs or else much of potential profit may be eroded away through offering costs.

Private Placements are offered only to a select group of qualified individuals and businesses that generally must be accredited investors. Individual accredited investors have either a net worth of $1 million (excluding the value of their primary residence), net income of $200,000 for the last two years and the expectation of receiving the same income during the current year for single investors, or net income of $300,000 over the same time period for married investors.

How are prospects identified and developed?

Ernst Capital Group works with many area developers and owners to seek out high-potential opportunities that need capital. We continually work with our developer/owner partners to evaluate potential deals and help structure them into win-win opportunities for all parties involved.

Are real estate DPPs suitable for all investors?

No, real estate DPPs are not suitable for all types of investors. Generally, you must be a sophisticated and an accredited investor to be eligible to make this type of investment. Accredited investors have either a net worth of $1 million (excluding the value of their primary residence), net income of $200,000 for the last two years and the expectation of receiving the same income during the current year for single investors, or net income of $300,000 over the same time period for married investors.

There are also minimum investment requirements. For most offerings, the minimum investment amount ranges from $25,000 to $100,000, but will vary depending upon the specific offering.

In addition to meeting the financial requirements, the investment must be suitable for your level of risk tolerance, investment objectives, timeframe, experience, and with respect to your other current investment holdings. One of our registered representatives will discuss all of this with you to determine if an investment is suitable.

How will I know if my investment is performing?

Ernst Capital Group is the asset manager or company administrator for most of our offerings. We send monthly statements to our investors keeping them informed about their investments. Investors are always welcome to contact us to ask questions. If we are the asset manager or company administrator, it will be fully disclosed. In cases where we are not, the sponsor will be responsible for keeping you informed.

How long does and investment program last?

Our equity programs generally range from 7 to 12 years, though they may last longer.

Every program is unique and has characteristics that may allow for or necessitate them to be shorter or longer in duration. Real estate is often cyclical in nature and it may take time to wait for favorable market conditions to sell assets.

This illiquidity is important to keep in mind because there is no formal secondary market to sell your ownership interest. The long-term nature of these investments may make them unsuitable for some investors.

What are your current opportunities?

Our investments are structured as Private Placements and therefore are not available to the general public. We do not advertise or openly discuss opportunities that we have available. You must first open an account to hear about our available opportunities. If you are interested in opening an account, please contact one of our representatives at 605-271-7172 or info@ernstcapgroup.com.

.

HOW TO INVEST

1. SPEAK WITH A REPRESENTATIVE

To become an investor, you must first speak with one of our representatives to determine whether you are qualified. Potential investors must be accredited and the investment must be suitable for their specific level of risk tolerance, expectations and portfolio holdings.

Accredited investors have either a net worth of $1 million (excluding the value of their primary residence), net income of $200,000 for the last two years and the expectation of receiving the same income during the current year for single investors, or net income of $300,000 over the same time period for married investors.

Please contact our office at (605) 271-7172 and one of our representatives will answer any questions you may have about our firm. If there is a potential fit, the representative may suggest that you open an account.

2. OPEN AN ACCOUNT

There is no minimum investment required to open an account. Once an account is opened and approved, there is still no obligation to invest with us, however, you will be eligible to receive information about our opportunities and you can pick and choose the ones that you are interested in.

3. VISIT WITH US ABOUT OPPORTUNITIES

If you find an opportunity that you are interested in, you can again contact one of our representatives and he or she will discuss it with you in more detail. If you decide you are ready to invest, the representative will help you through the investment process.