• Net income of $0.27 per share
• New loan fundings of $10.9 million
• Total loans of $27.5 million at end of 2Q05, up 22% from March 31, 2005
• Paid monthly dividends of $0.10 per share

Todd B. Parriott, CEO and Chairman of the Board of Directors of DCR, said, "We are extremely pleased with our financial performance in the second quarter. And with the ongoing acquisition, management and now majority ownership of Consolidated Mortgage, one of the largest private trust deed firms in the United States, our stockholders should realize several benefits including owning the pipeline and additional revenue to support the dividend, thus further strengthening our financial position."

"The recently announced continuation in dividend returns on our $10 shares of common stock at 12 percent through third quarter of 2005, further positions DCR as an industry leader as we continue offering one of the highest yields in the business. The decision by our Board of Directors to maintain the dividend shows great faith in our ability to continue to grow our corporate portfolio and exceed stockholder expectations," added Mr. Parriott.

Total revenues for the quarter ended June 30, 2005 were $4.3 million, an increase of 4.9% from the first quarter of 2005. Interest income for the second quarter was $903,673, an increase of 26.5% from the previous quarter. The balance in the loan portfolio increased from $22.6 million at the beginning of the quarter to $27.5 million by quarter end.

Portfolio Activity
During the second quarter, DCR funded all or a portion of 67 loans totaling $10.9 million. Of the new loans, 45 were Acquisition and Development loans totaling $6.6 million, and 22 were Construction loans totaling $4.3 million.

At June 30, 2005, DCR's loan portfolio balance was $27.5 million, with a weighted average current interest pay rate of 12.65%.

DCR's loan and investment portfolio continues to perform beyond expectations. DCR continues to seek loans and investments that will generate superior risk adjusted returns with a long- term objective of capital preservation and earnings stability in varying interest rate and credit cycles.

Dividends
DCR declared dividends of $0.30 for the second quarter.

About Desert Capital REIT, Inc.
Desert Capital REIT, Inc., is a Henderson, Nevada-based real estate investment trust that invests in loans to owners and developers of real estate properties. Formed in December 2003, Desert Capital’s portfolio of mortgage loans consists of acquisition and development, construction, commercial property and residential loans. For more information, please call (800) 419-2855 or visit www.desertcapitalreit.com.

Safe Harbor Statement
Statements included herein that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The company’s actual results, performance or achievements could differ materially from those expressed or implied by such statements.

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