6-30-02

   The second quarter of 2002 remained strong. The first quarter proved to be the best in over two years, based on the GPD. Uncle Al sees no signs of inflation, thus he's keeping interest rates unchanged. Most are predicting that rates won't rise until maybe the end of this year or possibly not until next year. Although the housing market is sensitive to interest rates, which are very low now, if they were to increase by as much as two percent, they would still be considered below the historic average.

   DenSco raised another $150,000 in new investor money. On the last day of the month, we had some late afternoon closings, which I was unable to reinvest before the end of the day. I have some deals that will be done the first week of July. We stand at $2.2 million, holding $4.0 million in properties. I have 1/3 of the properties closing next week. It's a busy time and there is plenty of demand.

   We have been in business now for one year. We have financed a total of 71 deals at $5.9 million, worth $10.4 million. The average life of a loan is standing at 106 days. This is the number we should be able to average over time. Our average loan is $87,000, with the loan-to-value standing at 61.5%. We have two remaining construction loans, one land loan, and the rest are foreclosure loans.

   We have loans in 11 different cities across the valley. Our smallest loan is $45k; our largest is $185k. I will continue to work on raising money and keeping a good diversity of loans both in type, dollar amount and location in the portfolio.

   Denny J. Chittick