TERMS

Terms of Investment . . . . . . . . . . . . 60 months
Current interest rate . . . . . . . . . . . . . . . .13.0%*
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
Spread over the index . . . . . . . . . . . . . . . . .N/A
Frequency of rate changes . . . . . . . . . . . . N/A
Interest rate ceiling. . . . . . . . . . . . . . . . . . . N/A
Interest rate floor. . . . . . . . . . . . . . . . . . . . .N/A
Discount points to the lender . . . . . . . . . .N/A
Repayment schedule . . . 30 year amortization
Monthly payment . . . . . . . . . . . . . . .$2,717.85*
Lockout period . . . . . . . . . . . . . .. . . 30 months
Purchase price of the note . . . . . . . . .$247,500
Current balance on the note . . . . . . . $247,500
Maturity date . . . . . . . . . . . . . . . . . . 60 months
Balloon payment after 60 mos.app. . .$247,500
Late charge amount . . . . . . . . . . . . . . . .$310.97
Prepayment penalty . . . . . . . . . . . . . . . . .None
*Net of servicing costs

EQUITY ANALYSIS

Appraised Value as of May 31, 2000. . . . . . . .$449,500
Less Senior Liens
First trust deed of . . . . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second trust deed of . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third trust deed of . . . . . . . . . . . . . . . . . . . . . . . . . $
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P&I payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
Matures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Protective equity . . . . . . . . . . . . . . . . . . . . . . . $202,000
Loan-to-value ratio . . . . . . . . . . . . . . . . . . . . . . .55.1%

PROPERTY

Project: RED ROOF MOTEL

Property address: 576 Hwy 77A, Yoakum, Texas

Description: This is a 31 room motel on a 5.4 acre parcel. This property is located about 90 miles east of San Antonio, Texas.

OPERATING STATEMENT

INCOME
Rental Income . . . . . . . . . . . . . . . . . . . . . .$151,338
Other net income. . . . . . . . . . . . . . . . . . . .$5,165
. . . . . . . . . . . . . . . . . . . . . Total Income: $156,503
Less % Vacancy Allowance . . . . . . . . . .
. . . . . . . . . . . . .Effective Gross Income $156,503

EXPENSES
Utilities . . . . . . . . . . . . . . . . . . . . . . . .$11,894
Insurance . . . . . . . . . . . . . . . . . . . . . .1,565
Mgmt. offsite . . . . . . . . . . . . . . . . . . .3,443
Mgmt. onsite . . . . . . . . . . . . . . . . . . . 16,120
Repairs & maint. . . . . . . . . . . . . . . . . 11,894
Room expense. . . . . . . . . . . . . . . . . . .37,091
Supplies . . . . . . . . . . . . . . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .6,573
Trash . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing. . . . . . . . . . . . . . . . . . . . . . 6,573
Reserves for replacement . . . . . . . . 1,252
Miscellaneous  . . . . . . . . . . . . . . . . . 470
Franchise fees. . . . . . . . . . . . . . . . . . 2,504
Telecommunications . . . . . . . . . . . . .1,409
Total Expenses . . . . . . . . . . . . . . . . .$100,788
   
NET OPERATING INCOME . . . . .$55,715
Note: Based on the appraiser's estimates..

BORROWERS

RED ROOF MOTEL

This first mortgage loan is secured by a 31 unit motel located in Yoakum, Texas. Yoakum is located approximately 90 miles east of San Antonio and 100 miles west of Houston. Our borrower currently operates this motel, two other motels, plus an eight unit apartment building. We are currently arranging a loan for him on this motel and his People's Inn, both located in rural Texas. The proceeds from both loans will be used to refinance the existing note plus provide our borrower with the necessary funds for a purchase of another motel.

As discussed previously, the subject property is a 31 unit motel, with four kitchenettes, that was originally built during the 1960s (estimated). The current owner acquired the property in 1996 and has upgraded it since that time. Actually he reopened it in August of 1999 after finishing a complete rehabilitation project at an estimated cost of $230,000. The facility had been closed for several years prior to his acquisition.

There are four wood frame buildings which are arranged in a quadrangle fashion. Three of the structures house the lodging rooms. Two of these buildings are single story while the third building is two story. Carports were used prior to this remodeling. These were adjacent to each room in the single level buildings and the courtyard side has now been enclosed. The two story building has rooms upstairs and two rooms downstairs. The center part of the downstairs level was carports previously. Today it has been enclosed to varying degrees and serves as storage, maintenance, etc.

The fourth building is a two story frame building. The ground floor is the office and registration. Upstairs is the living quarters for the manager. All buildings have a new composition shingle roof that was installed after the purchase in 1996.

Our borrower has a good credit rating and a net worth of $559,000. Even though the motel has only been open since August of 1999 through the end of the year, he still received a net profit for the year of $32,906, a monthly income easily sufficient to service our monthly mortgage payment. He generates a net taxable income of over $50,000, all from the revenue of his four properties.

Our loan has a 30 month lock-out clause, which does not allow the borrower to pay off the loan for the first 30 months of the term. This first mortgage will be cross collateralized by a second mortgage on the People's Inn, located in Columbus, Texas. This does not allow the borrower to default on one property and keep the other. This will give the borrower more incentive to make regular monthly payments.

TO INVEST PLEASE CALL MIKE THURMAN @ 1-800-606-3232