DESERT CAPITAL REIT, INC.

Consolidated Balance Sheets

March 31, 2005

December 31, 2004

(Unaudited)

ASSETS

Mortgage notes receivable (net)

$

22,519,608

$

17,217,116

Office Building

6,437,442

180,000

Investment in subsidiary

6,780,114

3,501,047

Prepaid insurance

75,333

71,833

Interest receivable

146,206

131,300

Accounts receivable

809

78,749

Cash

4,369,657

2,375,309

Total assets

$

40,329,168

$

23,555,354

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable

$

234,012

$

203,219

Sales commissions payable

274,027

43,551

Interest payable

33,274

48,103

Dividends payable

210,500

126,270

Taxes payable

168,736

29,085

Notes payable

13,095,000

6,322,139

Total liabilities

14,015,550

6,772,366

Preferred stock, $0.01 par value: 15,000,000 shares

authorized, none outstanding

-

-

Common stock, $0.01 par value: 100,000,000 shares authorized; 3,005,487, and 20,000

shares issued and outstanding on March, 31 2005, and March 31, 2004, respectfully

30,055

19,964

Additional paid-in capital

26,169,440

16,782,200

Retained earnings

114,123

(19,176)

Total stockholders' equity

26,313,618

16,782,988

Total liabilities and stockholders' equity

$

40,329,168

$

23,555,354