Note I - Related Party Transactions

6 Months Ended

Jun. 30, 2012

Related Party Transactions Disclosure [Text Block]

NOTE I — RELATED PARTY TRANSACTIONS

From time to time, we may acquire or sell investments in real estate loans from/to our manager or other related parties.  Pursuant to the terms of our Management Agreement, such acquisitions and sales are made without any mark up or mark down.  No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments.  The purpose is generally to diversify our portfolio by syndicating loans, thereby providing us with additional capital to make additional loans.

Transactions with the Manager

Our manager is entitled to receive from us an annual management fee of up to 0.25% of our aggregate capital contributions received by us and Fund I from the sale of shares or membership units, paid monthly.  The amount of management fees paid to our manager for the three months and six months ended June 30, 2012 and 2011 was $69,000 and $138,000, respectively, for each period.

As of June 30, 2012 and December 31, 2011, our manager owned 100,000 of our common shares, representing approximately 1.6% of our total outstanding common stock.  For the three and six months ended June 30, 2012 and 2011, we declared $0 in dividends payable to our manager.

As of June 30, 2012 and December 31, 2011 we did not owe or have any receivables from our manager.

As of March 31, 2012, we had paid our manager approximately $69,000 for services to be performed from April through June 2012.  As of June 30, 2012 there is no prepaid balance.   A discount of 7% will be applied to the July 2012 payment.

During May 2012, our manager received total consultation fee of approximately $17,000, related to the sale of a VRM II, Fund III and our REO property.

Transactions with Other Related Parties

As of June 30, 2012 and December 31, 2011, we owned 537,078 common shares of VRM II, representing approximately 4.2%, of their total outstanding common stock.  For the three and six months ended June 30, 2012 and 2011 we recognized $0 in dividend income from VRM II.

As of June 30, 2012 and December 31, 2011, VRM II owned 538,178 of our common shares, approximately 8.5%, of our total outstanding common stock.  For the three and six months ended June 30, 2012 and 2011 we declared $0 in dividends payable to VRM II.

As of June 30, 2012 and December 31, 2011 we owed VRM II approximately $20,000 and approximately $0.1 million, respectively, primarily related to legal fees

As of June 30, 2012 we had a receivable with Fund III of  $1,000.  As of December 31, 2011 we had no receivable or payable with Fund III.