12-31-04

   The final quarter of the year ended strongly. Usually, the month of December is pretty slow. Normally, there aren't a lot of people that are willing to move during the holidays. This December was the exception.

   Lots of things happened economically in the fourth quarter. The election being probably the biggest event we had. Once that was behind us, the stock market took off, the economy was strong and Uncle Al once again moved rates up.

   There is a concern with the falling dollar. Until the government shows some fiscal discipline, the dollar will continue to be weak. The other thing that will happen is that interest rates on bonds will continue to go up. The Fed may have to raise rates more quickly then they want to stem the falling dollar, which in turn could raise mortgage rates above a desirable rate. This of course could slow the economy and bring an end to the hot housing market.

   I'm not the only one that is seeing this. Lots of smart guys in the right place are saying the same thing and are trying to eliminate the chance of an abrupt end to the steady economy that we are now enjoying.

   This quarter was nearly as good as the last in raising new money. I had $750k of new money invested with DenSco this quarter. It was split pretty evenly between new investors and old investors. I appreciate the word of mouth from all of you! The portfolio is at $6.5 million. The New Year will lead to more investors. I'm sure that I'll continue to raise new money every quarter.

   There are currently 63 loans. The homes are valued at $11.1 million. You might expect more loans since I've taken in a lot of new money. However I've done several large loans of $200k or more. I funded 42 new loans this quarter, and had 41 loans close. The average loan is at $107k. I had to pass recently on a $250k loan from a good borrower because I was out of money. The demand for these larger loans is growing.

   I have updated the pictures of the current properties on the site. I hope everyone has a great Holiday and are looking forward to another prosperous New Year. Be safe!

   Denny J. Chittick