3-31-05

   The old saying suggests, "As January goes, so goes the rest of the year." Typically, January is a bit slow - due to the few people that were looking for, and purchasing, houses during the holidays, then closing 30 days later. However, this wasn't the case this year. January was an extremely busy month, both with closing and newly funded loans.

   Unfortunately, in other respects, it was a really bad month for the stock market. The Fed has steadily increased rates, and they have changed their tone, increasing concerns about inflation.

   Interest rates will continue to rise throughout the year. Mortgage rates have recently started to move up now also. Though I don't believe there is a real estate bubble here in Phoenix, eventually, higher rates will slow the market down. It always does. Yet, I do not believe this will affect my ability to place good loans with strong borrowers. There are currently, 6,400 people (net) a month, are moving into the Phoenix Metropolitan area for permanent residence. This will continue to produce demand.

   In this first quarter, I received an additional $350k of new investor's money. I am presently meeting with several potential new investors. I appreciate the referral that says in itself how pleased you are with your investment in DenSco. We have $6.85 million in the portfolio as of today. I'm hoping to continue to raise more money throughout the year.

   I have 61 loans, totaling $6.9 million, with the value of the homes equaling $12 million. The trend of doing larger loans is continuing. Out of the last 12 loans, only one has been less then $110k. I funded 58 loans this quarter, and had 54 loans close. The demand is very strong. In the last month, I've turned away 1 million a week in potential loans because I've been out of money. That's a good problem to have!

   We had the 2nd Annual DenSco Dinner Party this past weekend. We had 30 people here at our house, eating, drinking and staring at my sleeping son. Next year I hope to have more of you in attendance.

   I have updated the pictures of the current properties on the site. Thanks for your trust, investment, and referrals.

   Denny J. Chittick