TERMS

Terms of Investment . . . . . . . . . . . . . .60 months
Current interest rate . . . . . . . . . . . . . . . . 10.0%*
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 . . . . . . . . . . . . . . .$4,559.66*
Frequency of payment changes . . . . . . . . . .N/A
Purchase price of the note . . . . . . . . . .$529,750
Current balance on the note . . . . . . . . .$529,750
Maturity date . . . . . . . . . . . . . . . . . . 60 months
Balloon payment after 60 mos.app. . . . $522,535
Late charge amount . . . . . . . . . . . . . . .$540.83
Prepayment penalty . . . . . . . . . . . . . . . . .None
*Net of servicing costs

EQUITY ANALYSIS

Appraised Value as of Dec. 15, 2002. . . . $815,000
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 . . . . . . . . . . . . . . . . .$285,250
Loan-to-value ratio . . . . . . . . . . . . . . . .65.0%

PROPERTY

Project: SHORELINE PLAZA

Property address: 555 Shoreline Boulevard,
Corpus Christi, TX

Description: The subject property is a 9,700 sf office building and 3,480 sf parking lot.

OPERATING STATEMENT

INCOME
Rental Income . . . . . . . . . . . . . . . . . . .$128,040
Telephone and other net income. . . . . . .
. . . . . . . . . . . . . . . . . . Total Income: $128,040
Less 20% Vacancy Allowance . . . . . . . . . $6,402
. . . . . . . . . . . .Effective Gross Income $121,638

EXPENSES
Utilities . . . . . . . . . . . . . . . . . . . . . . . .
Insurance . . . . . . . . . . . . . . . . . . . . . .$2,500
Mgmt. offsite . . . . . . . . . . . . . . . . . . .
Mgmt. onsite . . . . . . . . . . . . . . . . . . . $6,082
Repairs & maint. . . . . . . . . . . . . . . . . .$6,802
Room expense. . . . . . . . . . . . . . . . . .
Supplies . . . . . . . . . . . . . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . .$15,000
Trash . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing. . . . . . . . . . . . . . . . . . . . . .
Reserves for replacement . . . . . . . . . . .
Miscellaneous  . . . . . . . . . . . . . . . . . . $6,082
Franchise fees. . . . . . . . . . . . . . . . . . .
Telecommunications . . . . . . . . . . . . . .
Total Expenses . . . . . . . . . . . . . . . . .$41,828
   
NET OPERATING INCOME . . . . . . . . .$79,810
Note: Based on the appraiser's estimates..

BORROWERS

SHORELINE PLAZA

This loan is secured by a 9,700sf office building located in Corpus Christi, TX. This 7-unit office building is constructed of perma-stone and masonry walls on a concrete slab foundation. Built in the 1950s, the building was recently purchased by our borrower and remodeled. At the time the borrower purchased this property, there were no tenants. After a substantial cash infusion into the property for remodeling the borrower now has the building fully-occupied.

Gross annual rents for this property are $116,400. The borrower occupies two of the units at 1,500sf each. The remaining units are occupied five different companies including an attorney and a realtor. Of the remaining units, one contains 650sf and the other four range in size from 1,000sf to 2,000sf. The appraiser estimates that the currents rents that are being charged are approximately 10% below market rents for this type of property in the area. The borrower intends to increase rents for the property gradually but decided to charge slightly below market rents to fill all the vacancies in the building.

The borrowing entity for this loan is a limited partnership with substantial assets and net worth. The partnership’s assets are estimated to be $18,409,500 and net worth of $15,068,500. In addition to the property we are lending on, the partnership owns 400 acres in Hawaii estimated to be worth $12.0MM, two ranches containing more than 465 acres, and several rental properties and vacant land. Net income for 2001 for the partnership was $95,534.

Personally Guaranteeing the loan is the general partner of the borrowing entity. He is a part-time pilot and real estate investor. He only reports taxable income of $9,778. According to his tax returns, his gross earnings are $25,935 as a mortgage broker, $51,382 as a pilot, and $30,000 as General Partner of the various partnerships he is involved with. He seems to be fairly aggressive with writing off expenses and depreciation with his businesses. Our borrower has good credit, and he is not saddled with a lot of personal debt. His credit report shows just one car loan and a credit card with just a small balance. These accounts have been paid as agreed. There is also a $50 unpaid medical bill. His personal net worth is $991,000 excluding his partnership interests.

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