DESERT CAPITAL REIT, INC. ACQUIRES PORTION OF TRUST DEED FIRM

The Transaction Completes the First Step in Acquisition of Financial Firm

LAS VEGAS (January 11, 2005) — Desert Capital REIT, Inc., a real estate investment trust headquartered in Las Vegas, announced today that it has acquired 48 percent of Consolidated Mortgage, one of the largest private trust deed firms in the United States, with over $300 million in currently brokered loans.

The previously announced transaction is structured as an installment sale pursuant to which Desert Capital will acquire all the outstanding equity securities of Consolidated Mortgage over time so as to comply with applicable Internal Revenue Code provisions. The aggregate purchase price to be paid by Desert Capital for Consolidated Mortgage consists of $9 million in cash and 450,000 shares of Desert Capital's common stock.

"Today's transaction accomplishes the first step in our goal to acquire Consolidated Mortgage," said Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc. "And with the final details also in order, Desert Capital meets all regulatory requirements by the state to complete the full purchase of Consolidated Mortgage by the end of the third quarter."

"Revenues provided by Desert Capital's ownership of Consolidated Mortgage will supplement cash flow from the REIT's other operations. This should support Desert Capital's goal of providing regular distributions for investors, which is distributed either quarterly or monthly upon request," adds Parriott.

Desert Capital provides its investors with a Dividend Reinvestment Program (DRiP), which allows investors to purchase additional shares through automatic investment of dividends thereby contributing to portfolio growth.

About Desert Capital REIT, Inc.
Desert Capital REIT, Inc., is a Las Vegas, Nev.-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.

About Consolidated Mortgage
With more than 25 years of continuous real estate investment success, Consolidated Mortgage is one of the largest private trust deed firms in the United States, with over $300 million in currently brokered loans. The company is headquartered in Las Vegas, Nevada.

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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